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Encyclopedia of Operations Research and Management Science pp 202–205Cite as

Decision trees

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A decision tree is a pictorial description of a well-defined decision problem. It is a graphical representation consisting of nodes (where decisions are made or chance events occur) and arcs (which connect nodes). Decision trees are useful because they provide a clear, documentable and discussible model of either how the decision was made or how it will be made.

The tree provides a framework for the calculation of the expected value of each available alternative. The alternative with the maximum expected value is the best choice path based on the information and mind-set of the decision-makers at the time the decision is made. This best choice path indicates the best overall alternative, including the best subsidiary decisions at future decision steps, when uncertainties have been resolved.

The decision tree should be arranged, for convenience, from left to right in the temporal order in which the events and decisions will occur. Therefore, the steps on the left occur earlier in time...

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References

  1. Eriksen, S.P. and Keller, L.R. (1993). “A Multi-Attribute Approach to Weighing the Risks and Benefits of Pharmaceutical Agents,” Medical Decision Making, 13, 118–125.

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  2. Keeney, R.L. and Raiffa, H. (1976). Decisions with Multiple Objectives: Preferences and Value Tradeoffs, John Wiley, New York.

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  3. Raiffa, H. (1968). Decision Analysis, Addison-Wesley, Reading, Massachusetts.

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  4. Clemen, R. (1996). Making Hard Decisions: An Introduction to Decision Analysis, 2nd ed., PWS-Kent, Boston, Massachusetts.

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  5. Kirkwood, C. (1997). Strategic Decision Making: Multiobjective Decision Analysis with Spreadsheets, Duxbury Press, Belmont, California.

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Author information

Authors and Affiliations

  1. University of California, Irvine, USA

    Stuart Eriksen & L. Robin Keller

Authors
  1. Stuart Eriksen
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  2. L. Robin Keller
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Editor information

Editors and Affiliations

  1. Robert H. Smith School of Business, University of Maryland, College Part, Maryland, USA

    Saul I. Gass

  2. School of Information Technology & Engineering, George Mason University, Fairfax, Virginia, USA

    Carl M. Harris

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© 2001 Kluwer Academic Publishers

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Eriksen, S., Keller, L.R. (2001). Decision trees . In: Gass, S.I., Harris, C.M. (eds) Encyclopedia of Operations Research and Management Science. Springer, New York, NY. https://doi.org/10.1007/1-4020-0611-X_220

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  • DOI: https://doi.org/10.1007/1-4020-0611-X_220

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  • Publisher Name: Springer, New York, NY

  • Print ISBN: 978-0-7923-7827-3

  • Online ISBN: 978-1-4020-0611-1

  • eBook Packages: Springer Book Archive

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