ECONOMICS

Detailed explanation-1: -A decision tree is a decision support tool that uses a tree-like model of decisions and their possible consequences, including chance event outcomes, resource costs, and utility. It is one way to display an algorithm that only contains conditional control statements.

Detailed explanation-2: -Risk strategies are often a complex sequence of decisions completed over a period of time with new information collected along the way. A decision tree or decision flow diagram is a very useful tool in that it can provide a clear graphical representation of these risky decision problems.

Detailed explanation-3: -Decision trees are extremely useful for data analytics and machine learning because they break down complex data into more manageable parts. They’re often used in these fields for prediction analysis, data classification, and regression.

Detailed explanation-4: -Decision trees are useful tools, particularly for situations where financial data and probability of outcomes are relatively reliable. They are used to compare the costs and likely values of decision pathways that a business might take.

Detailed explanation-5: -The decision tree is the most commonly applied decision tool in the decision analysis. The decision theory of interest in the decision analysis, regarding the decision making under risk, is the expected value of criterion also reffered to as the Bayesian principle.