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Decision Trees

         
   3) organizations (that people form and belong to-an indication of .their power) ; and   
   4) objects (that people make and possess-for example, cities or weapons systems.)   
 
     A nation gathers intelligence in these categories to help the policy makers in formulating tactical (timely) and strategic (long-range) decisions. The decision-making processes of both the national-policy maker and the intelligence analyst require projections of possible outcomes based on knowledge of present factors. In short, intelligence deals with forecasting and is a creature of uncertainty.
 
     Consequently, the goal of the analyst is to produce his study within a framework of as much precision as uncertainty will allow, Caution often leads, however, to the overuse of what Sherman Kent called "words of estimative probability" (or "weasel words") such as probable, possible, or suggests. All of these can spell disaster, both for the analyst who uses them, and for the policy maker who ventures to rely on an assessment so framed. Not only is there uncertainty as to the degree of conviction such words connote, but the complete range of alternatives is not presented. What would be useful under such circumstances would be a model that would serve both to organize sizable amounts of data, and to communicate the degree of certainty relating to possible outcomes or the likelihood of the occurrence of specific events at some given time in the future.
         
     Fortunately, there is such a model available to the intelligence analyst and the policy maker; it is called the decision tree. John F. Magee has claimed that
         
        Using the decision tree, management can consider various courses of action with greater ease and clarity. The interactions between present decision alternatives, uncertain events, and future-choices and their results become more visible.*   
         
     Logic diagramming is an information-handling technique used for graphic display of sequences, interrelationships, and the time-phased logic of a problem situation. The decision tree is a prototype for the preponderance of logic diagrams. It is a linear means of representing the alternatives, objectives, and consequences of a series of decisions. The decision tree, essentially, is an algorithm for the analysis of complex sequential decision problems.
         
     Decision trees can be used to depict a series of true-false sequences, i.e., in a deterministic way; or to display subjective likelihoods and their relationships-a probabilistic use. The technique is deceptively simple:
         
   1. Identify the strategies available to you, and the possible states of nature (chance events) that might occur.   
         
   2. Draw the tree skeleton.      
         
   3. If probabilities are being expressed, enter the economic or statistical data and associated (subjective) probabilities.   
         
   4. Finally, analyze the tree to determine the best course of action.    
         
     For a rudimentary example, suppose you would prefer to hold a party on your patio, but there is a 40 percent chance of rain and the party can not
         
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  * "Decision Trees for Decision Making," Harvard Business Review, July-August 1964.  
         
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Posted: May 08, 2007 08:43 AM
Last Updated: May 08, 2007 08:43 AM