Steps making decisiontree, Managerial Accounting

Assignment Help:

Steps making DecisionTree

A decision tree is a graphical representation of decision process indicating decision alternatives, states of nature, related probabilities and conditional pay-offs for each combination of decision alternatives and states of nature. It shows all the possible choices that can be made as branches on the tree. And all the probable outputs for each selection as subsidiary branches on the tree.

Steps followed in making the tree are:


•    State the problem or recognize the objectives
•    Identify the possible causes of action, (i.e., decision alternative)
•    Recognize the possible states of nature/situations
•    Calculate approximately the probabilities for each state of nature
•    Estimate the restricted pay-off for each alternative and states of nature
•    Draw the decision tree

Compute the predictable monetary value at each state of nature node using the roll back method.


Related Discussions:- Steps making decisiontree

Define the modes of hybrid instrument, Define the modes of Hybrid Instrumen...

Define the modes of Hybrid Instrument? 1. What are a variety of investment risks. Describe them. 2. Define the modes of Hybrid Instruments and clarify their features.

Graphic analysis, Graphic Analysis Whenever you have two data points, you...

Graphic Analysis Whenever you have two data points, you should generally suppose a linear relationship. When you acquire more data, you can study the data to determine when there

Factory layout-jit features, Factory Layout The first stage of implemen...

Factory Layout The first stage of implementing the JIT manufacturing techniques is to rearrange the factory floor away from the batch production functional layout towards a pro

Linear Programming, Explain with examples five areas where linear programmi...

Explain with examples five areas where linear programming can be applied in Managerial accounting

What are the disadvantages of zero base budgeting, Disadvantages of zero ba...

Disadvantages of zero base budgeting 1) It is not suitable for all the activities in an organization 2) It has limited application in a profit making organization. In this c

Cost of carry model, Suppose the spot price for Euro is $1.30, the futures ...

Suppose the spot price for Euro is $1.30, the futures price for delivery in 6 months is $ 1.29675. Assume that the 6 month borrowing/lending rate in Euro is 1.5 percent (annually,

Determine the cash flow budget - monthly cash disbursement, where can I get...

where can I get the solution for the question on this link: http://www.expertsmind.com/questions/determine-the-cash-flow-budget-monthly-cash-disbursement-30145416.aspx I have att

Marketing decisions, Marketing refers to the promotion of products, ...

Marketing refers to the promotion of products, especially advertising and branding. But marketing includes product management, pricing, prom

Just-in time inventory management-jit production , Just-in Time (JIT) Inven...

Just-in Time (JIT) Inventory management JIT is a system whose purpose is to generate or to purchase products or components as they are required by customers or for use rather

Expected future warranty claims, 1. Paid $350,000 to purchase furniture and...

1. Paid $350,000 to purchase furniture and leased it to DEF Corp. for 5 years. DEF agreed to pay $89,955 on July 1 for each of the next 5 years.  At the end of the lease term we ex

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd