A decision tree is a flow diagram used for choosing between different situations. The tool is instrumental for research and planning. It enables the user to know the chances of individual choices while comparing the costs and consequences of every decision.
The tool uses conditional statements to reach for a fair decision. It breaks down a complex decision into a visual map. With a decision tree, the management doesn’t get an ultimate solution but a way of selecting from several alternatives.
Parts of a decision tree
For a logical flow of information, the chart uses leaf, branch, and root nodes. These three components help in interpreting a decision.
Let us look at the components in detail:
Leaf node. Leaf nodes connect to the branches. They represent possible outcomes (chances and probable decisions) for different decisions.
Leaf nodes include square and circle nodes. Square nodes represent decisions made, while circle nodes have several uncertain outcomes. Leaf nodes come at the end of the branches.
Branch node. These nodes represent various action points. They highlight the costs associated with each possible outcome. The branch nodes also depict the probability.
Root node. The root node is the objective or the big question you are trying to answer. Usually, the root node comes on top of a decision tree. It is representative of the situation or sample.
Examples of Decision Tree Templates
#1 Decision Tree Template
The templates above allows you to do the customization of the roots, leaves, and branches. It takes a top-down approach with the final decision coming at the bottom.
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#2 Decision Tree
The above one is good for testing and sampling. It looks at the different probabilities of potential outcomes, allowing you to make the best decision.
#3 Decision Tree Diagrams
The templates above allows you to expound on a big problem area and narrow down to two possibilities. You will then look at the costs and finance factors before settling on the less costly potential outcomes. You can use these blank check templates we provide to pay and keep records.
#4 Decision Tree Diagrams
This template is printable. It is easy to edit and looks very professional in the design. Depending on whether you are editing the leaf, branch, or root nodes, the text boxes are very flexible to edit making it a time saver. By the way, can use our time log template to measure how you are spending your time.
#5 Decision Trees
Here is another downloadable pdf. It comprises an easy to understand flowchart that runs horizontally and is easy to edit.
#6 Decision Trees
The template is a risk assessment format used to evaluate risks and make a calculated decision that bears less risk. As you move downwards, the probable decision becomes more tangible.
#7 Decision Trees
The one above allows you to decide between starting a new project or continuing with a new project. It takes into account all the review factors, making it easy to decide the favorable option.
The printable provided in this package enables the user to use and select from many options and formats. The decision event tree are best for analyzing the possibility of occurrence of certain events. Besides, there are many explanations and calculations to equip you with the knowledge of decision tree.
The decision tree has three designs inside a PowerPoint slide that is easy to edit. It uses color-coding to identify set up, decision, and result points.
The blank tree diagram is good for analyzing products and processes. It takes into account several parameters to arrive at a decision.
#11 Create Tree
Then there is the printable shown above, which is suitable for office research. Download the file and follow the action points to visualize and arrive at a logical decision.
The one you see above is perfect for conducting clinical research. It collects views from academic and industry players useful for making critical decisions in the medical field.
The printable you see is simplified to make it easy for you to understand. The file keeps track of each category and verifies the result. It allows for amendments whenever there is a change.
The decision tree template is usable in the legal profession. It provides a logical flow of evidence leading to a logical decision.
Advantages of Using Decision Trees
Versatile. Decision trees applies to any sector. As long as there are decisions to make, this tool simplifies the process and eliminates confusion in decision making.
You can integrate decision trees with other management tools like PERT and NPV. Computer-based decision trees templates run on robust algorithms that do a quick analysis of loads of input data sets.
Easy to use. Interpreting decision trees is an easy task. It does not require complicated formulas, just basic math. Besides, visual representations explain every path to each decision/outcome.
Comprehensive. Decision trees bring to the fore all possible outcomes. It shows the consequences of every branch and highlights decision nodes that require further analysis. You can trace the path for every concussion and decide which path makes sense for your needs.
Specific. On a decision tree diagram, every outcome, decision, and the problem has an assigned value. By understanding the cost of every decision, it is easier to conclude based on financial implications. Even in the absence of accurate information, a decision tree diagram still gives results based on probabilities.
Application of Decision Tree Template
In production, it helps managers decide whether to buy one or several machines. In this case, the managers know there will be an increased demand for products manufactured while on the other hand, they are worried about the increased costs of setting up more machines.
Power supply companies use decision trees to detect faults in the transmission line. The algorithm allows the company to make the best decision for resolving problems in the power line.
Decision trees help in upholding healthy customer relationship management practices. It is a good way of finding out how customers are experiencing online services by analyzing large data sets to arrive at conclusions.
The trees also apply in Fraud Statement Detection. It takes into account the different possibilities then narrows down on the most likely possibility.
In finance, it is an excellent tool for option pricing. Banks also use them to classify loan applications by assessing the possibility of default.
Decision trees help in the maximization of profits. The tool helps in identifying projects that cost less, thus increasing the profit margins. It takes into consideration all the environmental factors associated with each decision. In the end, you make decisions with fewer bottlenecks. They work well when there is uncertainty, and there are many confusing options. Be sure to pick some of our free printables in making valuable decisions.