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592 CHAPTER 13 DECISION ANALYSIS
Figure 13.17 PDC Decision Tree With Branch Probabilities and Payoffs
Other Options
TreePlan defaults to a maximization objective. If you would like a minimization
objective, follow these steps:
Step 1. Select the Tools menu and choose Decision Tree
Step 2. Select Options
Step 3. Choose Minimize (costs)
Click OK
In using a TreePlan decision tree, we can modify probabilities and payoffs and
quickly observe the impact of the changes on the optimal solution. Using this
‘what-if’ type of sensitivity analysis, we can identify changes in probabilities and
payoffs that would change the optimal decision. Also, because TreePlan is an Excel
add-in, most of Excel’s capabilities are available. For instance, we could use boldface
to highlight the name of the optimal decision alternative on the final decision tree
solution. Computer software packages such as TreePlan make it easier to do a
thorough analysis of a decision problem.
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