Question

In a Decision Tree problem used to evaluate capacity alternatives we need which of the following as prerequisite information?

a. Expect values of payoffs
b. Payoff values
c. A tree
d. All of the above

Answer 1

In Decision Tree analysis for evaluating capacity alternatives, all of the following information is required: expected values of payoffs, payoff values, and the tree structure of the decision process.

Step-by-step explanation:

In a Decision Tree problem which is used to evaluate capacity alternatives, the prerequisite information required includes:

• Expect values of payoffs
• Payoff values
• A tree structure representing the decision process

Therefore, the answer to the question is d. All of the above. A Decision Tree incorporates various elements to make strategic decisions. 'Expected values of payoffs' involve calculating the average outcome when there are multiple possible outcomes with different probabilities. 'Payoff values' refer to the gains or losses associated with each outcome. The 'tree' itself is a graphical representation that lays out the sequential decisions and the possible outcomes, including chance events, to assist in choosing the most beneficial course of action.