Decision Tree Analysis

Shawal Hamid (19CS17)

Bareera Soomro(19CS44)
Kousar Abbasi (19CS06)
Decision Tree analysis

Decision tree analysis is the

process of drawing a decision tree,
which is a graphic representation of
various alternative solutions that
are available to solve a given
problem

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 Decision Tree Analysis

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Terminologies used in decision tree analysis

Root node : it represents the entire population of the data we have.

Splitting : it is a process of dividing two or more than two sub nodes.

Decision node : when sub nodes are divided into even more sub nodes
then the initial sub node will call that the decision node.

Leaf/Terminal nodes : nodes which do not split further are called

the leaf of the terminal node.

Branch/ Sub tree : a sub section of the entire tree is known as a

branch or sub tree

Parent and child node : a node which is divided into sub nodes is
called
parent node whereas sub nodes will be called child of the parent node.

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 Steps in decision tree analysis
1. Step first : is understanding and specifying the problem area for
which decision making is required.

2. Step second : is interpreting and chalking out all possible solutions

to the particular issue as well as their consequences.

3. Step third : is presenting the variables on a decision tree along with

its respective probability values.

4. Step fourth : is finding out the outcomes of all the variables and
specifying it in the decision tree.

5. step five : is highly crucial and backs the overall analysis of this
process. It involves calculating the EMV values for all the chance nodes
or options, to figure out the solution which provides the highest
expected value.

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Decision tree analysis example

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 Calculation of EMV
Expansion of business unit :

New product line of shower Gel :

Do nothing :

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 Advantages of decision tree analysis

(1) Depicts most suitable project/solution.

(2) Easy classification and data interpretation

(3) Asist multiple decision-making tools

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(4) Initiative variable analysis

(5) Consider both, categorial and numerical

data

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Advantages of decision tree analysis

(1) Inappropriate for excessive data

(2) Difficult to handle numerous outcomes

(3) Chances of classification error

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(4) Impact of variance

(5) Unsuitable for continuous variables

(6) Sensitive towards biasness

(7) Expensive process

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thank you