Organizations and Decision Trees
Organizations have recently considered and acknowledged the necessity of considering decision trees in decision making. Decision trees, according to Almuallim, Kaneda, and Akiba (2001), have enabled businesses to use available knowledge to classify data and provide easily understood visual solutions to challenges. These graphic solutions can be used in decision-making to determine the best course of action to take. The estimation of expected monetary values is one of the best applications of decision trees. The decision tree was used in this situation because of its capacity to identify the many outcomes of decisions and the monetary value associated with each decision. Based on this action, organizations are able to analyze the benefits and losses of each decision and are able to select the best decisions.
Utilizing Decision Trees for Expected Monetary Value
According to Hulett and Hillson (2014), utilization of decision trees in evaluating expected monetary value is an asset to an organization because it helps the organization be able to make best decisions even in uncertain situations. This has led to organizations being able to reflect success from good decisions made.
Achieving Success in Decision-Making
According to Hulett and Hillson (2014), success in decision-making can be achieved by analyzing and identifying decisions and the various instances which could cause uncertainty. Thereafter a decision tree is developed, and the value of each outcome is calculated. Once this has been achieved, it is easy to make a decision based on the values attached to each decision. An example of the application of decision trees is in the selection of a service provider in a business organization. Once the business has selected various service providers, their services are evaluated and the expected monetary value is calculated. Using this information, the organization is able to find the best supplier who will achieve the highest value for the organization.
Work Cited
Almuallim, Hussein, Shigeo Kaneda, and Yasuhiro Akiba. "Development and applications of decision trees." Proceedings in the Expert Systems-The Technology of Knowledge Management and Decision Making for the 21st Century Six-Volume Set (2001): 53-77.
Hulett, David T., and David Hillson. "Use Decision Trees to Make Important Project Decisions." Cost Engineering (published by AACEI (2014).
