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Project Management
Key Concepts
Decision Tree Analysis
What is it?
Decision trees are used to support selection of the
best of several alternative courses of action.
Alternative paths through the project are shown in
the decision tree using branches representing
different decisions or events, each of which can
have associated costs and related individual project
risks (both threats and opportunities).
Decision Tree Analysis
Decision Tree Analysis
• The end-points of branches in the decision tree
represent the outcome from following that particular
path, which can be negative or positive.
• The decision tree is evaluated by calculating the
expected monetary value of each branch
(quantitative analysis), allowing the optimal path to
be selected.
Decision Tree Analysis

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11.4 Decision Tree Analysis

  • 3. What is it? Decision trees are used to support selection of the best of several alternative courses of action. Alternative paths through the project are shown in the decision tree using branches representing different decisions or events, each of which can have associated costs and related individual project risks (both threats and opportunities). Decision Tree Analysis
  • 5. • The end-points of branches in the decision tree represent the outcome from following that particular path, which can be negative or positive. • The decision tree is evaluated by calculating the expected monetary value of each branch (quantitative analysis), allowing the optimal path to be selected. Decision Tree Analysis