## Decision Trees

**What is it?**

Decision Trees are an analytical approach to calculate the right path when there are sequential and contingent decisions to be taken.

**When is it useful?**

**An Example?**

**How do you do the analysis?**

- Alternative choices are identified and then blown out to as much detail as possible, maybe under different market scenarios.
- The value of each branch of the tree can be estimated and a probability assigned to that branch.
- The probability-weighted value of each alternative choice can then be assessed and the most attractive option chosen.

**I want to know more**

Mindtools web resource for decision trees

**How can you adapt this concept?**

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