Decision trees
Taught by Nick Drape · AI tutor support included
You'll learn how to use decision trees to evaluate business decisions when outcomes depend on uncertain events. This video teaches you to map out alternatives, assign probabilities to different outcomes, and calculate expected values to determine the best course of action.
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In this lesson
- 0:00 Introduction to decision trees
- 1:04 Decision tree notation and symbols
- 2:18 New product launch example
- 4:08 Expected value calculations explained
- 6:06 Maybelline complex decision scenario
- 9:12 Working backwards through decision points
- 11:31 Final decision and expected value comparison
About this lesson
You'll work through two practical examples—from a simple product launch choice to a more complex scenario involving market research and campaign decisions—showing how to work backwards through the tree, calculate expected payoffs at each chance point, and make informed decisions based on expected value analysis. This technique is essential for risk management and strategic decision-making in Performance Management and other CIMA modules where you face situations with multiple options and uncertain outcomes.
Duration: 13m
Transcript
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