# Decision Tree Analysis Worksheet

## Overview
Decision Tree Analysis is a visual and analytical decision-making tool that uses a tree-like model of decisions and their possible consequences, including chance event outcomes, resource costs, and utility. It helps you map out possible outcomes and calculate the best path forward based on probabilities and values.

## Decision Analysis Setup

**Decision Title:** _________________________________
**Decision Maker(s):** _________________________________
**Date:** _____________
**Decision Deadline:** _____________
**Key Stakeholders:** _________________________________

## Step 1: Define the Decision

**Primary Decision Question:**
_________________________________
_________________________________

**Context and Background:**
_________________________________
_________________________________
_________________________________

**Success Criteria:**
1. _________________________________
2. _________________________________
3. _________________________________

**Constraints:**
- Budget: $_____________
- Timeline: _____________
- Resources: _________________________________
- Other: _________________________________

## Step 2: Identify Decision Options

List all possible decision alternatives:

**Option A:** _________________________________
- Description: _________________________________
- Key Requirements: _________________________________
- Initial Investment: $_____________

**Option B:** _________________________________
- Description: _________________________________
- Key Requirements: _________________________________
- Initial Investment: $_____________

**Option C:** _________________________________
- Description: _________________________________
- Key Requirements: _________________________________
- Initial Investment: $_____________

**Option D:** _________________________________
- Description: _________________________________
- Key Requirements: _________________________________
- Initial Investment: $_____________

## Step 3: Identify Uncertainties and Outcomes

For each option, identify possible outcomes and their probabilities:

### Option A Outcomes
| Outcome | Description | Probability (%) | Value/Payoff ($) | Expected Value ($) |
|---------|-------------|-----------------|------------------|-------------------|
| Best Case | | | | |
| Most Likely | | | | |
| Worst Case | | | | |
| **Total** | | **100%** | | |

### Option B Outcomes
| Outcome | Description | Probability (%) | Value/Payoff ($) | Expected Value ($) |
|---------|-------------|-----------------|------------------|-------------------|
| Best Case | | | | |
| Most Likely | | | | |
| Worst Case | | | | |
| **Total** | | **100%** | | |

### Option C Outcomes
| Outcome | Description | Probability (%) | Value/Payoff ($) | Expected Value ($) |
|---------|-------------|-----------------|------------------|-------------------|
| Best Case | | | | |
| Most Likely | | | | |
| Worst Case | | | | |
| **Total** | | **100%** | | |

### Option D Outcomes
| Outcome | Description | Probability (%) | Value/Payoff ($) | Expected Value ($) |
|---------|-------------|-----------------|------------------|-------------------|
| Best Case | | | | |
| Most Likely | | | | |
| Worst Case | | | | |
| **Total** | | **100%** | | |

## Step 4: Draw the Decision Tree

```
                                    [Decision Point]
                    ┌─────────────────┴─────────────────┐
                    │                                   │
                Option A                            Option B
                    │                                   │
            ┌───────┼───────┐                   ┌───────┼───────┐
            │       │       │                   │       │       │
         Best    Most    Worst               Best    Most    Worst
         Case    Likely   Case               Case    Likely   Case
         (__)%   (__)%   (__)%               (__)%   (__)%   (__)%
         $____   $____   $____               $____   $____   $____
```

**Complete Decision Tree Drawing:**
[Use additional paper or digital tool to create full decision tree with all branches]

## Step 5: Calculate Expected Values

**Expected Value Formula:** EV = Σ(Probability × Outcome Value)

| Option | Expected Value Calculation | Total Expected Value |
|--------|---------------------------|---------------------|
| A | (___% × $___) + (___% × $___) + (___% × $___) | $_______ |
| B | (___% × $___) + (___% × $___) + (___% × $___) | $_______ |
| C | (___% × $___) + (___% × $___) + (___% × $___) | $_______ |
| D | (___% × $___) + (___% × $___) + (___% × $___) | $_______ |

**Highest Expected Value Option:** _____________

## Step 6: Sensitivity Analysis

Test how changes in probabilities or values affect the decision:

### Probability Sensitivity
What happens if probabilities change by ±10%?

| Option | Original EV | Optimistic EV (+10%) | Pessimistic EV (-10%) |
|--------|------------|---------------------|----------------------|
| A | $ | $ | $ |
| B | $ | $ | $ |
| C | $ | $ | $ |
| D | $ | $ | $ |

### Value Sensitivity
What happens if outcome values change by ±20%?

| Option | Original EV | Higher Values (+20%) | Lower Values (-20%) |
|--------|------------|---------------------|---------------------|
| A | $ | $ | $ |
| B | $ | $ | $ |
| C | $ | $ | $ |
| D | $ | $ | $ |

## Step 7: Risk Analysis

### Risk Profile for Each Option

**Option A:**
- Maximum Possible Gain: $_______
- Maximum Possible Loss: $_______
- Variance: _______
- Standard Deviation: _______
- Risk Level: [ ] Low [ ] Medium [ ] High

**Option B:**
- Maximum Possible Gain: $_______
- Maximum Possible Loss: $_______
- Variance: _______
- Standard Deviation: _______
- Risk Level: [ ] Low [ ] Medium [ ] High

**Option C:**
- Maximum Possible Gain: $_______
- Maximum Possible Loss: $_______
- Variance: _______
- Standard Deviation: _______
- Risk Level: [ ] Low [ ] Medium [ ] High

**Option D:**
- Maximum Possible Gain: $_______
- Maximum Possible Loss: $_______
- Variance: _______
- Standard Deviation: _______
- Risk Level: [ ] Low [ ] Medium [ ] High

## Step 8: Multi-Stage Decision Analysis

If your decision has multiple stages, map out subsequent decisions:

### Stage 2 Decisions (if applicable)
**Trigger Point:** _________________________________

| First Stage Choice | Second Stage Options | Probabilities | Values |
|-------------------|---------------------|---------------|---------|
| | | | |
| | | | |
| | | | |

## Step 9: Non-Monetary Factors

### Qualitative Assessment
Rate each option on non-monetary factors (1-10 scale):

| Factor | Weight | Option A | Option B | Option C | Option D |
|--------|--------|----------|----------|----------|----------|
| Strategic Fit | ___% | | | | |
| Risk Tolerance | ___% | | | | |
| Implementation Ease | ___% | | | | |
| Flexibility | ___% | | | | |
| Stakeholder Support | ___% | | | | |
| **Weighted Total** | 100% | | | | |

## Step 10: Final Decision Analysis

### Decision Matrix Summary
| Option | Expected Value | Risk Level | Qualitative Score | Rank |
|--------|---------------|------------|------------------|------|
| A | $ | | | |
| B | $ | | | |
| C | $ | | | |
| D | $ | | | |

### Recommendation
**Recommended Option:** _________________________________

**Rationale:**
1. _________________________________
2. _________________________________
3. _________________________________

**Key Assumptions:**
1. _________________________________
2. _________________________________
3. _________________________________

**Critical Success Factors:**
1. _________________________________
2. _________________________________
3. _________________________________

## Implementation Planning

### If Chosen Option is Implemented:

**Immediate Actions (Week 1):**
- [ ] _________________________________
- [ ] _________________________________
- [ ] _________________________________

**Short-term Actions (Month 1):**
- [ ] _________________________________
- [ ] _________________________________
- [ ] _________________________________

**Checkpoints and Review:**
- [ ] 30-day review: _____________
- [ ] 60-day review: _____________
- [ ] 90-day review: _____________

### Contingency Planning

**If Best Case Scenario:**
- Action: _________________________________
- Trigger: _________________________________

**If Worst Case Scenario:**
- Action: _________________________________
- Trigger: _________________________________

**Exit Strategy:**
- Conditions for abandoning: _________________________________
- Exit cost: $_____________
- Exit timeline: _____________

## Decision Documentation

**Decision Made:** _________________________________
**Date:** _____________
**Decision Maker(s):** _________________________________
**Key Factors in Decision:**
1. _________________________________
2. _________________________________
3. _________________________________

## Example Decision Tree

**Decision:** Launch New Product Line

**Options:**
- A: Launch nationally ($500K investment)
- B: Test in one region first ($100K investment)
- C: Don't launch

**Option A Outcomes:**
- Success (30%): $2M profit → EV = 0.3 × $2M = $600K
- Moderate (50%): $500K profit → EV = 0.5 × $500K = $250K
- Failure (20%): -$300K loss → EV = 0.2 × -$300K = -$60K
- **Total EV:** $790K

**Option B Outcomes:**
- Success (40%): $800K profit → EV = 0.4 × $800K = $320K
- Moderate (40%): $200K profit → EV = 0.4 × $200K = $80K
- Failure (20%): -$50K loss → EV = 0.2 × -$50K = -$10K
- **Total EV:** $390K

**Decision:** Choose Option A based on highest expected value, despite higher risk.

---
*Analysis Completed:* _____________
*Decision Date:* _____________
*Review Date:* _____________