The nodes are of two types. The first is a rectangle that represents the decision to be made. The branches emanating from decision nodes are the alternative choices with which the manager is faced. One and only one alternative can be implemented. The second type of node is a circle.
Circles represent chance nodes.
That is, the alternatives emanating from chance nodes have some element of uncertainty as to whether or not they will occur. The primary benefit of a decision tree is that it provides a visual representation of the choices facing the manager. The first task of the manager is to identify the decision that needs to be made based upon a given situation. These alternatives are connected to the decision node as straight lines emanating from the node. The next step is to identify all the possible consequences that could occur as a result of an alternative being implemented.