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Unit 14: Decision-making
When you have calculated these decision benefits, choose the option that has the largest benefit, Notes
and take that as the decision made. This is the value of that decision node.
Figure 14.5 shows this calculation of decision nodes in our example:
Figure 14.5
In this example, the benefit we previously calculated for ‘new product, thorough development’
was $420,400. We estimate the future cost of this approach as $150,000. This gives a net benefit of
$270,400.
The net benefit of ‘new product, rapid development’ was $31,400. On this branch we therefore
choose the most valuable option, ‘new product, thorough development’, and allocate this value
to the decision node.
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