Decision Tree Analysis

Project Name:
Prepared by:
Date:

Decision Definition

Decision Node

Chance Node

Expected Value

(Decision Name)

(Cost of the Decision)

(Probability and Payoff)

(Probability X Payoff)

Value of
Decision

65%
Strong
$130
Build New Plant (1)

$200
$41.50

$120

35%
Weak
$32

Build or Upgrade?

$90
2

$49

65%
Strong
$78
Upgrade Exisiting Plant (2)

$120
$49.00

$50

35%
Weak
$21
$60