April 14, 2013

A deeper look into decision tree

The decision tree analysis tool is used to understand the consequences of a decision in numerical terms. However, this decision can be way in future and while time passes evaluation of circumstances can change as the decision point comes closer views become clearer. Moreover, it has to be taken into consideration that a decision tree analyse the decision consequence for a specific period of time while if this period is changed the overall decision can change, hence, time scaling and sensitivity analysis should be taken into consideration.

Having an overall of the decision tool capabilities, limitations and bias possibility is important to have an overview of where the decision will be leading. This awareness allows the decision maker to understand the tool limitation to cover for it by another decision tool and check for the decision validity during progress to decision.

As an engineer this will help me understand the financial consequences of the team technical decisions. Moreover, in new product development it will be beneficial to revisit the decision tree after provisional decision to understand what changes in market demand and strategic objectives have happened and how it can affect the product development decision financially.


- 2 comments by 2 or more people Not publicly viewable

  1. Tzu-i Yang

    as u said, the time scaling and sentivity need to be taken into account… i agree
    but do u think in the decision making presentation, we did consider that?
    for example, we only using decision tree till the market condition assumption 2014!! so it can say that we consider the time scaling??

    15 Apr 2013, 23:42

  2. Ahmed Alali

    Good point, you dont have to consider it while using the decision tree as the available data is limited which is one of the factors that affects decision making. However, you have to be concious that 2014 is not the end of the business. For instance, you can use AHP to assess the sustainability and possible growth of both sites as this is more important than being blind by quick hits for short term.

    I hope this answers your question

    21 Apr 2013, 13:59


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