Decision Trees Tutoring & Homework Help

Decisions making becomes complex with uncertainties. Complex decisions with significant uncertainty can be better analyzed using decision trees. In addition to many decision options and significant uncertainty, decisions also include dependent uncertainties, and sequential decisions that add to the complexity of the real world. Drawing a decision tree helps capture all aspects and aids in decision making.

Graduate Tutor’s CPA, MBA, or CFA tutors provide live 1-o-1 online tutoring to help you understand, interpret and build decision trees. Decision trees provide a logical approach to decision-making. Decision trees lay out the order in which decisions need to be made and possible outcomes (events) with their probability of occurrence at every point.

Top Tips to Draw a Decision Tree

The following decision tree facts help students draw decision trees:

Decision trees are linked in a sequence from left to right.
Decisions, events, and end outcomes are represented by decision tree nodes and connected by branches.
Decision tree nodes can be of two types: Decision notes and chance nodes.
The probability of an event occurring is estimated for every chance/event/outcome.
The complete specification of the alternatives that should be selected at all decision nodes in a decision tree is called a decision strategy
The expected value helps you make decisions by arriving at a number after evaluating all the possible outcomes for each decision alternative and the probability of each of those outcomes occurring.

When you have completed a decision tree well, you will have a diagram starting with a single “root” on the left side connected with various branches. These branches represent various paths (decisions notes and chance nodes). Probabilities of the various events occurring and payoffs for each branch/events are also represented in the decisions trees.

You can learn how to build decision trees with Graduate Tutor’s CPA/MBA/CFA tutors online. Decision trees homework help & tutoring online is convenient as it saves you valuable time traveling.

Decision Tree Software & Tools

Decision trees can be drawn by hand or using Microsoft Excel or using various decision tree software/tools. Tools include Treeplan Edraw, Smartdraw, Zingtree, IBM’s SPSS, Precisiontree from Palisade, Lucidchart, etc. Graduate Tutor’s CPA/MBA/CFA tutors provide tutoring for decision tree software such as Treeplan or Palisade’s PrecisionTree online. You can learn how to build Precisiontree with Graduate Tutor’s tutors online. Precisiontree homework help & tutoring online is convenient and saves you valuable time.

Examples of Courses with Decision Trees

All MBAs encounter decision trees in their decision-making courses. Note the difference between decision-making vs. decision science. You will see decision trees taught in operations management and decision-making courses. Some examples include DECISION 611G which is the Decision Models course at the Fuqua School of Business, STA 287 which is the Business Analytics course at Houston-MBA, DMD or Data models and Decisions at MIT’s EMBA program, 355 A/B: Decision Analysis at the University of Virginia, BS1628 which is Decision Analytics at the Imperial College Business School, Decision Analysis at Darden, etc. The Quantitative Methods module in Level 2 of the CFA program also expects you to know how to draw a decision tree. In fact, decision trees are also taught in other non-business and non-statistical/decision-making courses including finance, medical school, engineering, etc. We know because we have tutored decision trees in NYU’s Real Options, Acquisition Valuation, and Value Enhancement which is Professor Aswath Damodaran’s valuation course. We have also seen decision trees taught in NCCW 5030 Weill a Medical College at Cornell University as well as MGMT524 Management Science at the Embry-Riddle Aeronautical University. These courses generally do not go into decision sciences and artificial intelligence. We can tutor you on these decision tree topics such as Classification Trees, Entropy and Information Gain.

Decision Tree: Course Expectations

Graduate-level students are expected to know the following

How to draw a decision tree for a case study or question.
How to analyze the decision tree.
How to calculate expected values with or without decision tree tools/software.
How to calculate the expected values of perfect information.
How to use utilities in decision trees.
How to perform sensitivity analysis on your decision tree.

A decision criterion is a rule for making a decision. Expected value is one criterion for making a decision and the one used in a decision tree. However, there are other decision-making criteria that can be used in decision making including:

Optimistic decision-making framework.
Conservative (pessimistic) decision-making framework.
Regret minimizing framework.
Equally likely frameworks.

While these may not be directly related to solving a decision tree problem, it helps to understand that there are different decision criteria that can be made for decision making.

Textbooks that Cover Decision Trees

Most operations and decision-making textbooks have at least one chapter on decision trees. A variety of textbooks can be used to teach decision trees. For example BS1628: Decision Analytics at Imperial College Business School recommends Powell and Baker’s Business Analytics: The Art of Modeling with Spreadsheets, published by Wiley. Other texts include Introduction to management science written by Taylor, B. W. (ISBN: 0131888099), Quantitative analysis for management written by Render, B., Stair, R. M., & Hanna, M. E. (ISBN: 0136036252), “Making Hard Decisions” by Clemen and Reilly, etc.

Decision Tree Case Studies

There are many wonderful case studies including:

CHANCE ENCOUNTERS II UVA-QA-0783 Rev. Jun. 15, 2012, Darden Business Publishing where David Fitzhugh, a respected movie-industry analyst, was hired to evaluate an unusual business idea—the purchasing of the sequel rights associated with a soon-to-be produced movie.
Evaluating Pharma Licensing Projects A very interesting article regarding licensing in the pharmaceutical industry can be found at Understanding why licensing works in biotech, and why deals are structured as they are, will help the entrepreneur negotiate. by Richard Mason, Nicos Savva & Stefan Scholtes.
Freemark Abbey Winery by William S. Krasker where Freemark Abbey must decide whether to harvest in view of the possibility of rain. Rain could damage the crop but delaying the harvest would be risky. On the other hand, rain could be beneficial and greatly increase the value of the resulting wine. This decision is further complicated by the fact that ripe Riesling grapes can be vinified in two ways, resulting in two different styles of wine. Their relative prices would depend on the uncertain preference of consumers two years later when the wine is bottled and sold. (Harvard Business School, Product #: 181027-PDF-ENG)

A Simple Decision Tree Example

Mrs. Barn is thinking of producing a new cooling widget for hunters during this hunting season. If the summer is extreme he would earn profits of $50,000 but if the summer is mild she would lose $30,000. Mrs. Barn estimates the probability of a mild summer is 30% without a weather forecast. Mrs. Barn has a choice to launch the business right away or hire a weather forecaster. The forecaster’s accuracy when he predicts a strong summer is 80%. However, the forecaster’s accuracy when he predicts a mild summer is only 60%. a) Should Mrs. Barn produce the new cooling widget? b) How much would Mrs. Barn pay for a weather forecast? EVPI?

Most decision tree questions require you to:

Draw the decision tree.
Indicating the various decisions and events.
Indicate the payoffs at the end of the final branches.
Indicate the relevant probabilities of the events on the decision tree.
Compute the optimal strategy, using expected monetary value as the decision criteria.
Outline the optimal strategy (in words).

Graduate Tutor’s CPA, MBA, or CFA tutors provide live 1-o-1 online tutoring to help you understand, interpret and build decision trees. In addition to decision tree homework help and tutoring, graduate tutor’s CPA/MBA/CFA tutors also provide online tutoring and homework help in a variety of other subjects. Other topics that our operations research and decision analysis tutors and statistics tutors can assist you with include:

Operations Research Tutoring

Our operations research tutors can assist you with tutoring to understand and draw decision trees. Other operations topics we can assist you include queuing theory and waiting lines, decision trees, linear programing using Microsoft Excel’s Solver, newsvendor models, batch processing, Littlefield simulation games. etc. Feel free to call or email if we can be of assistance with live one on one tutoring.