Introduction to Using PrecisionTree: Measuring the Value of Information

Decision trees are structured decision models containing sequences of decisions and events. They allow us to graphically map the plan throughout the lifetime of a project, along with uncertain events in the future, managerial flexibilities of the project, and alternative strategies available. In most projects, there are several ways to gather more information before making an irreversible decision. Information gathering can be a complex process such as market research (in retail and manufacturing) or seismic tests (in oil and gas), or a very simple thing such as waiting for a competitor to launch a product first and measure the market acceptance. This webinar will demonstrate how to use decision tree models measure the value of information (VOI), both perfect and imperfect, and the consequences it brings to the decision process. All within Excel and in an intuitive way, but with all the necessary mathematical rigor. 1 - Basic construction of decision tree models 2 - Modeling alternatives and information revealed 3 - Interpretation of the model and calculations 4 - Sensitivity analysis and tools for complex models 5 - Advanced ways to model risks and uncertainties