DECISION TREES AND THEIR APPLICATIONS IN MANAGEMENT: ENHANCING STRATEGIC DECISION-MAKING

Abstract

Decision trees are a powerful tool used in managerial decision-making, helping managers to visualize potential outcomes, weigh alternatives, and make informed choices in complex, uncertain environments. This article explores the concept of decision trees, their construction, and their application in various areas of management, such as strategy development, resource allocation, risk management, and forecasting. The paper delves into the different types of decision trees, including classification trees and regression trees, and how they can be integrated with other decision-making techniques such as Monte Carlo simulations and optimization models. Additionally, the article examines the advantages and limitations of decision trees, the challenges in their implementation, and their role in supporting data-driven decision-making. By applying decision tree models, managers can enhance their ability to assess risks, predict outcomes, and formulate effective strategies.