- decision trees
- Diagrams that illustrate the choices available to a decision maker and the estimated outcomes of each possible decision. Each possible decision is shown as a separate branch of the tree, together with each estimated outcome for each decision and the subjective probability of these outcomes actually occurring (see illustration overleaf). From this information the expected values for each outcome can be determined, which can provide valuable information in decision making. For an example see the diagram on p. XYZ.Decision tree. A decision tree showing the outcome of a speculative sale and purchase of a commodity, assuming that there is an equal probability of a 10 point market rise and a 10 point market fall. It is assumed that there is a stop loss order to cover after an adverse market movement of 10 points, but profits are allowed to run.
Big dictionary of business and management. 2014.
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