Complete your decision tree
analysis and create a report (suggested length of 2 pages or 800 words)
by doing the following:
Note: You are encouraged to use
the template located within the attached “Decision Tree Analysis Resources” to
complete your analysis. While it is required that you use the scenario and data
set located in the attachment, the use of the data analysis template is
optional.
A. Describe a business question that could be answered by
applying decision tree analysis and is derived from the scenario in the
attached “Decision Tree Analysis Resources.”
B. Identify the relevant data values required for your
decision tree analysis, including the following:
• probabilities
• payoffs
• profits
• demand
C. Report how you analyzed the data using decision tree
analysis by doing the following:
1. Complete a decision tree diagram, including each of
the following:
• state-of-nature nodes
• calculated payoffs, each expressed out to
two decimal places
• expected values, each expressed out to
two decimal places
Note: You can
submit the completed decision tree diagram using a separate attachment or the
optional template on the attached “Decision Tree Analysis Resources.”
Note: Refer to “Prepare for the Performance Assessment Task 2” in
the course of study to see examples of acceptable output.
2. Justify why decision tree analysis is the appropriate
analysis technique, including relevant details from the scenario to support
your justification.
D. Summarize the implications of your decision tree
analysis by doing the following:
1. Explain the role of probabilities and the role of
demand for each branch.
2. Explain how the expected value of each node
is determined based on payoffs.
Note: Refer “Prepare for the Performance Assessment Task 2” in
the course of study to see an example of an acceptable discussion of results.
3. Discuss one limitation of each of
the following:
• the data elements
• the decision tree analysis
E. Recommend a course of action that addresses the
business question from part A and is based on the results of your decision
tree analysis.
F. Acknowledge sources, using in-text citations and
references, for content that is quoted, paraphrased, or summarized.
G. Demonstrate professional communication in the content
and presentation of your submission.