Decision Tree
Transcript: Decision Tree “A schematic tree-shaped diagram used to determine a course of action or show a statistical probability. Each branch of the decision tree represents a possible decision or occurrence. The tree structure shows how one choice leads to the next, and the use of branches indicates that each option is mutually exclusive.” Investopedia A tree diagram which is used for making decisions in business or computer programming and in which the branches represent choices with associated risks, costs, results, or probabilities. Merriam Webster - Businesses - Medical decision making (classification, diagnosing...etc) - Computer programing - data mining - machine learning 1. Decision trees implicitly perform variable screening or feature selection 2. Decision trees require relatively little effort from users for data preparation 3.Nonlinear relationships between parameters do not affect tree performance 4.Decision trees are very intuitive and easy to explain. * Decision tree is a decision tool that helps identify the right decision accurately. * Decision trees are used in different fields and for different purposes. * Solutions, chances, and end results are the three main components of a decision tree. * There are three main steps for drawing a decision tree: drawing, evaluating and calculating. * Like any other decision-making tools, there are a number of advantages and disadvantages to it. When is it used? What is it used for? Decision tree elements Squares represent decisions 2. Chance nodes - represented by circles Definitions Example Summary 1. Decision nodes - commonly represented by squares Add values, cash, score, or percentage to each possible outcome according to your expectations and using common sense. Evaluating your Decision Tree Circles represent uncertain outcomes * If the result is another decision that you need to make, draw another square Advantages Triangles represent possible outcomes, not further decisions need to be made at this point. -Draw a box to represent the problem or new project - Expand the line and add the solutions in two directions- draw as many branches as solutions. - At end of each line consider the results of taking each decision How does it work? Definitions: -Instability -Complexity -Unwieldy -Too Much Information Calculating the tree values A decision tree can be used to clarify and find an answer to a complex problem. The structure allows users to take a problem with multiple possible solutions and display it in a simple, easy-to-understand format that shows the relationship between different events or decisions. The furthest branches on the tree represent possible end results. 3. End nodes - represented by triangles Starting from left to right, start calculating the uncertain outcomes and multiply them by their probabilities. Disadvantages Drawing the tree