This document provides information about decision trees, including: 1. Decision trees are graphical representations that present conditions and actions sequentially from starting point to various possible outcomes. 2. The key elements of decision trees are decision nodes, chance nodes, and end nodes. Decision nodes represent decision points, chance nodes represent uncertain events, and end nodes represent conclusions. 3. An example decision tree is presented to illustrate weekend activity choices based on weather, financial status, and whether parents are visiting.

1. DECISION
TREE
Name of the School – Galgotias school of finance & commerce
Course Code: MBAF50 Course Name: Operational Management
Presented by :-
Ankit upadhyay
Nisha
Walkman haji
Faculty Name: Bhavana sharma Program Name:

3. DECISI
ON
It is the process of choosing a
course of action from among
achieve a desired
alternatives to
goal.
What Is Decision?

4. Decision Tree
1. Decision tree is a graphical representation that presents conditions and
actions sequentially
2. It is a method of showing the relationship of each condition & its
permissible actions
3. The route of the tree is starting point and it proceeds towards the
various possible nodes.
4. The size of the tree will depend upon the number of conditions & actions
5. Each condition is expressed in two ways True/False or Yes/No.
6. Decision trees can be drawn by hand or created with a graphics program or
specialized software.

5. 1. Goals to be achieved:- Objectives which the decision maker
wants to achieve by his actions
2. Thedecisionmaker:-Refers to an individual or an organization
3. Courses of action:- Also called “Action” or “Decision Alternatives”.
They are under the control of decision maker.
4. States of nature:- Exhaustive list of possible future events.
Decision maker has no direct control over the occurrence of
particular event.
Elementsrelatedtoalldecisions

6. Decision Tree

7. A decision tree consists of 3 types of
nodes -
1. Decision nodes - commonly
represented by squares
2. Chance nodes - represented by
circles
3. End nodes - represented by triangles
(A decision tree has only burst
Decision Tree Nodes

8. Advantages of Decision tree
The strengths of decision tree methods are:
1.It expresses the logic of if then else in pictorial form
2.It is useful to express the logic when a value is variable or an action is
dependent on nested decision i.e. the outcome of another decision
3. It helps analyst to identify the actual decision to be made
4. It is useful to verify logic and problem that involve a few complex
limited number of action.
5. it forces the consideration of all possible outcomes of a decision and
traces each path to a conclusion.

9. Disadvantages of Decision tree
1. Absence of information in its format to take what other combinations of conditions to
test.
2. A Large Number of Branches with many paths will confuse rather than
help in analysis.
3. They are unstable, means that a small change in the data can lead to a large change in
the structure of the optimal decision tree
4. The main drawback of Decision Tree is that it generally leads to overfitting of the data.

10. USES OF DECISION TREE
1. Decision trees are commonly used in operation research, Specially in decision
analysis to help identify a strategy most likely to reach a goal.
2. Another use of decision tree is as a descriptive means for calculation
conditional probability.
3. Decision trees provide an effective method of Decision Making
4. Provide a framework to quantify the values of outcomes and the probabilities
of achieving them

11. EXAMPLE OF DECISION TREE

12. EXAMPLE OF DECISION TREE

13. EXAMPLE OF DECISION TREE
Imagine you only ever do four things at the weekend: go shopping, watch a
movie, play tennis or just stay in.
What you do depends on three things: the weather (windy, rainy or sunny);
how much money you have (rich or poor) and whether your parents arevisiting.
• Yousay to your yourself ( Creating a decision tree)
I. if my parents are visiting, we'll go to thecinema.
II. If they're not visiting and it's sunny, then I'll play tennis,
III. If it's windy, and I'm rich, then I'll go shopping.
IV. If they're not visiting, it's windy and I'm poor, then I will go to thecinema.
V. If they're not visiting and it's rainy, then I'll stay in.