Decision in bussiness shouldn't be made without charting a "Decision Tree" (also known as Classification Tree), whose aim is to illustrate the results of various kinds of decisions.
Charting the Decision Tree is proper when the bussiness process is involving a succession of decisions, where the next decision is based on the former one, more precisely, the result of the former one.
The decision tree is showing very clear which are the hazards , also the benefits resulted after making a peculiar decision.
As example of usefulness of such a decision tree is in making a choice between developping a new line of batteries or maintaining the old ones.
Each time when starting a chart decision tree type, we'll start with a square placed on the left side of the paper, almost at the edge. From this square we'll draw lines, so many as how many possibilities are in discussion, lines having a radial disposing. Above each line the solution proposed will be written, as detailed as can be. At the end of each line will be displayed the result of the solution. If the result has a degree of uncertainty, the result will be shown i a small circle.
The legend of the diagram:
square- decision needed to be made
circle-uncertain result
Always the results are also called "state of nature" because, due to a lot of environment variables, the result is unpredictible, most of the time.
After charting the decision tree, the decision which worth for the bussiness process can be calculated. Values can be assigned to the possible results.
In a decision tree, the use of objectives variables it's a must. The character of the objectives variables is to be agreed at general level. Object life, Production Volume, Profit/product, all of these can represent objectives variables. The variable has to be chosen if it is possible to be maximized or minimized.
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