7-1 Discussion

7-1 Discussion

Management
Discuss the use of decision trees for multi-stage decision-making with varying risk profiles in utility theory. Recommend how you would expand their use, and post your recommendations.

In responding to your classmates, state if you agree or disagree with their recommendations and why. How do your recommendations differ?

Refer to the Module Seven Discussion Rubric for directions in completing these discussions.

Solution Preview

Hi Brian,

I totally agree with you that the decision tree can be used to assess risks through the use of the utility theory. But in addition to assessing risks, it can also be used to assess personal preferences. Your example is a perfect example of how it can be used to assess personal preferences. Am sure the incorporation of the utility theory to your decision tree will help you choose the statistical program that suits you best.

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