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

Difference between direct labour and indirect labour, Difference between Di...

Difference between Direct labour and Indirect labour Direct labour:- Labour which plays an active and direct part in the production of a particular commodity is called di

Explain indirect expanses, Explain Indirect expanses: These are expanse...

Explain Indirect expanses: These are expanses which can't be directly conveniently and wholly allocated to a specific cost centres or cost units examples of such expanses are h

Assigment, taking the role of a consultant, discuss the factors you would c...

taking the role of a consultant, discuss the factors you would consider in selecting a suitable accounting system solutio for a small to medium enterprise. i has to be 1200 q\work

Assgnment, 1. Calculate the manufacturing costs for the year. 2. Prepare a ...

1. Calculate the manufacturing costs for the year. 2. Prepare a statement of cost of goods manufactured. 3. Prepare an income statement (assume an income tax 25%)

Costs, Recommend whether marginal or absorption costing should be use for i...

Recommend whether marginal or absorption costing should be use for internal monthly reporting

Explain the features of budgetary control, Explain the Features of budgetar...

Explain the Features of budgetary control From the definition the following features of budgets control emerge: 1) Establishment of budgets: budgets are prepared for each

Explain term contribution - contribution margin analysis, Contribution marg...

Contribution margin Analysis Contribution Contribution is the  difference between sales and variable cost or marginal cost of sales . if may also be defined as the excess

Minimal regret criterion-laplace criterion of rationality, Minimal Regret C...

Minimal Regret Criterion : This method seeks to minimize the maximum regret that would occur from choosing a particular strategy or alternative.  The regret is the opportunit

Budget Problem, BUDGET PROBLEM The Budget Director of Dave, Inc. with the ...

BUDGET PROBLEM The Budget Director of Dave, Inc. with the assistance of the Controller, Production Manager and the Sales Manager has gathered the following data for use in develop

Rates, What is your base rate for graduate level accounting? If I decide to...

What is your base rate for graduate level accounting? If I decide to use your service can the tutor and I speak via skype? I''m not located in the U.S.

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