Decision Tree

Decision trees are created through use of the Decision Tree Creation Window displayed immediately below. Please note that a PDF file with an example of a decision tree problem is in the folder into which you placed the Excel OM/QM software. (Default value is C:\Program Files\ExcelOMQMv5.

NOTE: The maximum number of nodes permitted in the tree is 30.

Missing image: dectreecontrol.gif

The bulk of the creation can be handled by the two frames at the top - Selected node and Branches to add.

Node: At any point during the creation process, branches can be added to any existing node. The easiest way to select the node is by clicking on the node. Alternatively, the scrollbar/textbox combination at the top of the Decision Tree Creation Window can be used to select the node.

Branches to add: Immediately below the node number is a scrollbar/textbox combination that can be used to indicate the number of branches to be added. The type of branch that is added, either Decisions or Events, depends on which of the two buttons is selected.

After adding branches a new tree will be drawn and there will be shaded cells into which you should place your input. For all branches you can enter a name. For probability branches you can enter a probability. If you add n Event branches the default probabilties will be set to 1/n. For example, if you add 3 branches the default probabilities will be .333, .333 and .333, Since this is simply an Excel spreadsheet you may, of course, change these probabilities. PLease note that there is no reason to change the last probabilty because it is given by the formula that is 1 minus the sum of the other probabilities.

There is one more cell, below the branch, into which data can be entered for each branch. This is for any intermediate profit (or cost) that is earned along the way. For example, suppose branch 3 relates to a client search that costs $1,000. and either leads to sales of $50,000 or sales of $60,000. One way to handle the job search cost is to simply reduce each of the two sales amounts by $1,000 to $49,000 and $59,000. Alternatively, you may place the cost of $1,000 (-$1,000) below the branch where it occurs. This typically makes for a more meaningful tree because costs can be seen as they occur.

Other actions at node: The first option is very straightforward. If you created a node that should be one type of node but is another, this may be changed. Removing a node is aslo obvious but please be careful because all nodes and branches following the removed noe will also be removed.

Copy and pasting subtrees: Sometimes, identical parts of a decision tree will occur in multiple places in the decision tree. Rather than having to recreate these you may go to the node that begins the repetitive section and select Copy subtree at node x. Then click on the node at which you want to place this section and click on the same button which will now read "Paste subtree at node x".

Excel OM/QM v5 by Howard J. Weiss, Temple University, (c) 2018