Decision Trees Quiz

What are the key inputs required for making decisions using decision trees?

• Cost, probability of success, and end payoffs

• Market trends, customer feedback, and competitor analysis

• Employee satisfaction, brand reputation, and innovation

• Supply chain efficiency, production cost, and sales volume

In the decision tree example, what are the two ways the business can launch its product?

• Trade shows and email campaigns

• Public relations and influencer partnerships

• Advertising and sales promotions

• Online marketing and direct sales

What is the cost of launching the product through advertising in the example?

• 20 million pounds

• 15 million pounds

• 5 million pounds

• 10 million pounds

How is the expected value of a variation calculated in decision trees?

• By multiplying the final payoff by the probability

• By adding the cost and the final payoff

• By subtracting the cost from the final payoff

• By multiplying the cost by the probability

What is the net gain for the advertising course of action in the example?

• 45 million pounds

• 41 million pounds

• 35 million pounds

• 31 million pounds

Which course of action has a slightly higher net gain in the example?

• Advertising

• Neither has a net gain

• Sales promotion

• Both have the same net gain

What is one advantage of using decision trees?

• They provide a logical and objective approach

• They eliminate the need for stakeholder input

• They incorporate qualitative data

• They guarantee accurate predictions

What is a disadvantage of using decision trees?

• They are only useful for long-term decisions

• They require extensive qualitative analysis

• They are too complex to understand

• They rely solely on quantitative data

In what scenario is it advisable to use decision trees?

• When facing a brand new type of decision

• When making short-term tactical decisions

• When there is a lack of trust in the data

• When dealing with strategic long-term decisions

Why might decision trees not be suitable for strategic decisions?

• They focus too much on qualitative data

• They require constant updates

• They do not consider stakeholder impact

• They are too expensive to implement