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Unit 14: Decision-making
This will give you a tree like the one shown in Figure 14.3: Notes
Figure 14.3
Calculating Tree Values
Once you have worked out the value of the outcomes, and have assessed the probability of the
outcomes of uncertainty, it is time to start calculating the values that will help you make your
decision.
Start on the right hand side of the decision tree, and work back towards the left. As you complete
a set of calculations on a node (decision square or uncertainty circle), all you need to do is to
record the result. You can ignore all the calculations that lead to that result from then on.
Calculating the Value of Uncertain Outcome Nodes
Where you are calculating the value of uncertain outcomes (circles on the diagram), do this by
multiplying the value of the outcomes by their probability. The total for that node of the tree is
the total of these values.
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