What is a decision tree? When you’re making decisions, whether personal or professional, you come to a conclusion after several rounds of trial and error. Many yes or no questions lead to the one that works!

Alisha found herself facing a work-related dilemma. She couldn’t figure out how to approach her manager for a long-overdue promotion. She was afraid she’d get a firm no, which would affect her motivation. But she also hoped she would get a yes. Alisha decided to use a decision-making tool that she learned on the job. This was a decision tree model.

  1. What Are Decision Trees?

  2. Examples Of Decision Trees

  3. Decision Tree Examples For Business

  4. Decision: iPad or iMac?

Let’s discuss the meaning and examples of decision trees.

What Are Decision Trees?

Decision trees are decision-making tools that help you decide a course of action. It’s called a decision tree because it resembles a tree with branches. Each branch represents a decision, outcome or reaction. The farthest branch represents the outcome or possible result of this activity.

Let’s see Alisha’s example of decision tree classification:

Alisha picks two possible courses of action—ask her manager for a promotion or continue in her current role. If she selects the first one, she either gets a yes or a no. If yes, she gets benefits, higher compensation and better professional outcomes. If not, she continues in her current role regardless. If she refrains from asking for a promotion, she might miss out on better opportunities. So, based on her possible outcome of getting a promotion plus benefits, Alisha decides to take the leap.

This is a decision tree example with solution to help you understand how you can create your own.

Examples Of Decision Trees

You have to make decisions every day—be it at work or home. What to order for dinner, buying a new car or whether you should learn a new language. Each decision we make is a result of permutations and combinations, a lot of brainstorming and weighing the pros and cons. There are many examples of decisions trees you can make for each of these individual decisions—big or small.

Let’s take examples of simple decision trees:

  1. Decision 1: Should you eat out?

There are two courses of action here, namely ‘yes’ and ‘no’. If yes, you can choose between trying a new restaurant or visiting your regular haunt. If not, you can choose between cooking or ordering in. Eventually, you’ll end up with a possible outcome that satisfies your appetite.

  1. Decision 2: Buying a new phone or second-hand

The two courses of action are ‘new phone’ and ‘second-hand’. The first can lead you to ask if you have the budget, with yes or no options. If yes, you can choose the model and other specifications. If not, it can lead you back to ‘second-hand’.

Some examples of decision trees are interconnected as one decision can lead to another. The point is that the final result should be something you’re happy with. After carefully selecting your options, you have to land on something that works for you.

Decision Tree Examples For Business

In the workplace, business owners, managers and leaders make decisions almost every minute. From which sales strategy to implement to whether they should hire new employees, each decision has significant implications on operations. There are several factors leaders have to consider such as financial constraints, impact and internal or external policies. It’s not just about internal stakeholders—your employees—but also about external stakeholders—your clients and customers.

Here’s a business decision tree example with solution:

Let’s say you’re an entrepreneur. You’ve just set up your new design studio and are contemplating buying new iPads or iMacs for your two-member design team.

Decision: iPad or iMac?

You have to make a choice based on cost, effectiveness and use. You can design your tree based on your needs. These elements can be your three criteria. For an iPad, the cost will be lower but so will its use. But if it’s effective for your purpose, you may end up choosing the former. With a series of questions and answers, you can come to a workable solution to your problem.

Working through a few examples of decision trees will help you master this decision-making tool. It’s cost-effective, easy to make and helps you come to a robust solution.

Harappa’s Making Decisions course will teach you everything you need to know about decision trees with examples of simple decision trees used to make big corporate decisions. With an entire section dedicated to decision-making tools and techniques, you can refine your decision-making skills with expert guidance. Our self-paced course is designed to offer quick takes on important topics for modern professionals.

Explore topics such as Decision MakingInformed DecisionProblem Solving and Process Of Decision Making from Harappa Diaries and learn to break down problems into small, manageable tasks.

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