We can now picture the decision node relating to the size of plant to build as below where the chance nodes have been replaced by their corresponding EMV's. We can now repeat the process we carried out above. However it is plain that in real life we will review this once test marketing has been completed. The above problem was solved using the package , the input being shown below. The description of the input is as follows.
All data is entered by nodes in the tree.
All following nodes in the decision tree are listed. If a node comes from a chance node then it has a non-zero probability value assigned. In the output shown below we have for each decision node the expected value and the appropriate decision and for each chance node the expected value. It is clear that the package agrees with the calculation we carried out before. Sensitivity analysis Consider the decision tree given above.