Problem based on decision trees allow, Business Management

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Decision trees permits:

  • The user to gain a wide idea of possible outcomes of the project/decision, i.e. in this case the selection of two locations
  • Easier understanding of the decision to prevent confusion or misunderstanding
  • Easy and simple calculations to be made to aid decision making
  • Easy accessibility for all users to make scientific/rational decisions
  • Offer a quantitative tool in decision making

However, decision trees:

  • Are based on approximate figures only and the actual outcomes may well be very different
  • Can be incorrect unless all costs, possibilities and benefits are considered
  • Only consider quantitative issues in decision making, so might be considered too basic a model
  • Qualitative factors could be inspect, e.g. familiarity with the two dissimilar locations, availability of skilled labour, cultural issues and training concerns, recruitment , legal issues, tax systems or simply management preferences
  • Similarly, other quantitative process could be considered, e.g. investment evaluation to see which location would generate the greatest revenue
  • Other decision making equipment might also be useful to Peckham Traders Ltd. such as PEST analysis or force field analysis in order to minimize any resistance to change.

 


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