Managers are required to organize, interpret, and display data that is relevant to the real-world business decisions they must make in their businesses. Business decisions must be based on relevant and reliable data. The use of analytical tools will improve your ability to use data to make informed decisions.
In this task, you will address the business situation in the attached scenario. You will access the scenario and data set by entering your student ID number in the “Start” tab of the “Decision Tree Resources” attachment. The scenario and data set are located in the “Decision Tree Scenario” tab. Using this data set, you will perform a decision tree analysis and recommend a solution. This recommendation will be included in a report that you will write, summarizing the key details of your analysis.
Refer to the scenario located in the attached “Decision Tree Analysis Resources.”
Complete your decision tree analysis and create a report (suggested length of 2–4 pages or 800 words) by doing the following:
A. Describe a business question that could be answered by applying decision tree analysis and is derived from the scenario in the attached “Decision Tree Analysis Resources.”
B. Identify the relevant data values required for your decision tree analysis, including the following:
C. Report how you analyzed the data using decision tree analysis by doing the following:
1. Complete a decision tree diagram, including each of the following:
• state-of-nature nodes
• calculated payoffs, each expressed out to two decimal places
• expected values, each expressed out to two decimal places
Note: You can submit the completed decision tree diagram using a separate attachment or the optional template on the attached “Decision Tree Analysis Resources.”
2. Justify why decision tree analysis is the appropriate analysis technique, including relevant details from the scenario to support your justification.
D. Summarize the implications of your decision tree analysis by doing the following:
1. Explain the role of probabilities and the role of demand for each branch.
2. Explain how the expected value of each node is determined based on payoffs.
3. Discuss one limitation of each of the following:
• the data elements
• the decision tree analysis
E. Recommend a course of action that addresses the business question from part A and is based on the results of your decision tree analysis.
F. Acknowledge sources, using in-text citations and references, for content that is quoted, paraphrased, or summarized.