Application of Decision Trees to Product Design
Student Tip 
A decision tree is a great tool for thinking through a problem.
Decision trees can be used for new-product decisions as well as for a wide variety of other management problems when uncertainty is present. They are particularly helpful when there are a series of decisions and various outcomes that lead to subsequent decisions followed by other outcomes. To form a decision tree, we use the following procedure:
Be sure that all possible alternatives and states of nature (beginning on the left and moving right) are included in the tree. This includes an alternative of “doing nothing.”
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