Decision Tree Analysis Definition and Explanation PDF | Download eBooks
Learn Decision Tree Analysis definition in project management with explanation to study “What is Decision Tree Analysis”. Study decision tree analysis explanation with project management terms to review project management course for online MBA programs.
Decision Tree Analysis Definition:
Decision trees are used to support selection of the best of several alternative courses of action.
A Guide to the Project Management Body of Knowledge by Project Management Institute
Decision Tree Analysis Explanation:
There are several tools and techniques to perform quantitative risk analysis. One of them is decision tree analysis. Generally, decision tree analysis involves different branches (like a tree) showing decisions and their consequences. In quantitative risk analysis, decision tree analysis helps to find the best course of action that must be taken to avoid risks. A decision tree involves different branches that relate to the decisions or events in the project. Along with each branch (event), the cost and risk associated with it is mentioned. At the end of each branch, the outcome of each path is mentioned. The outcomes can be positive or negative. Decision tree analysis is used to determine the value (monetary) of each alternative path and based on that value, the optimal path is selected.
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