How to Drawing a Decision Tree

The Mind Tools website believes decision trees are a useful technique because they help business leaders form a balanced picture of the risks and rewards associated with each possible course of action whatismyreferer. When drawing a decision tree, leaders should start with a square box, which represents the decision that needs to be made, either at the top of left hand side of a page. From that box, each option should be drawn out from there, either down if starting at the top of the page or to the right, if starting on the left hand side. On each line, write what the option is.

According to Mind Tools, leaders should then consider the results at the end of each line. If the result of taking the option is uncertain, they should draw a circle, if the result is another decision that needs to be made, a small box should be drawn.

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“Starting from the new decision squares on your diagram, draw out lines representing the options that you could select,” Mind Tools writes on its website. “From the circles draw lines representing possible outcomes.”

Decision makers should continue this process until they have drawn as many of the possible outcomes and decisions they believe can come from the original decision that must be made.

Once the tree is drawn, decision makers must analyze it to determine what each branch and outcome means. Leaders should assign values to the possible outcomes as well as estimate the probability of each outcome occurring. With those numbers, they can then calculate which option is best.

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