Decision Trees (Edexcel A-Level Business): Flashcards
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Practise the cards
10 cards from this deck
Type of technique decision trees are
Type of technique decision trees are
Quantitative technique
Symbol representing decision points
Symbol representing decision points
Squares
Symbol representing chance nodes
Symbol representing chance nodes
Circles
What EMV stands for
What EMV stands for
Expected Monetary Value
Formula to calculate EMV
Formula to calculate EMV
(P₁ × O₁) + (P₂ × O₂) + ...
Sum of all probabilities from one chance node
Sum of all probabilities from one chance node
1
Backdata
Backdata
Historical info from past events for probability estimates
Rollback technique
Rollback technique
Work from right to left backwards to solve complex trees
Key advantage of decision trees
Key advantage of decision trees
Provide quantitative/objective basis for decisions
Critical: EMV is NOT this
Critical: EMV is NOT this
The actual amount of money the business will make