DECISION TABLES

A decision table is a two-dimensional table that shows the action to be taken following a
series of related decisions.

Key terms
Action entry — The box at the lower right of a decision table where the appropriate action is
indicated.
Action stub —The box at the lower left of a decision table where the possible actions are listed.
Condition entry —The box at the upper right of a decision table where the responses (Y or N) to the
questions in the condition stub are listed.
Condition stub — The box at the upper left of a decision table where the questions (or decisions) are
listed

Below is an example decision table for a Rugby coach managing players. To be eligible to go for the
next competition, you should be a male student, you should at least be taking 12 hours of practice in a
week, and you should be 77 inches tall and should weigh 180 pounds.

Example 2

In your organization you have been appointed to manage colleague’s team building event. The agreed
event is mountain climbing. The conditions governing this event are that the day should not be rainy
or too sunny. Staff should have rubber shoes and sports clothes. Staff should have a certificate from a
certified doctor showing that their health records are OK for this exercise. The actions should consist
of Names of staff and their staff numbers, reject day and reject the staff that don’t qualify to this
event. Draw a decision table for this process.\
 Condition Stub Condition Entry

Is day rainy? Y N

Is day too sunny? Y N

Is staff on rubber shoes? Y N

Is staff on sports wear? Y N

Is staff with medical cert acceptable to Y N

Action Stub Action Entry

List staff name and number X

Reject day x x

Accept staff x

Decision Tree

Decision Trees:

Decision trees model sequential decision problems under uncertainty. A decision tree
describes graphically the decisions to be made, the events that may occur, and the outcomes
associated with combinations of decisions and events. Probabilities are assigned to the
events, and values are determined for each outcome. A major goal of the analysis is to
determine the best decisions.

A decision tree has three types of nodes: (a) decision node (b) chance node, and (c) leaf node.
The branches originating from a decision node represent options available; those originating
from a chance node represent uncontrollable events. At each chance node, each branch is
assigned a conditional probability equal to the probability of the event represented by the
branch, conditioned upon the knowledge available at the node. Leaf nodes represent the
possible endpoints, i.e. the results of the decisions and chance outcomes associated with the
path from the start of the tree (also known as the root).

Decision Tree Analysis: If you could somehow determine precisely what would happen as a
result of choosing each option in a decision, making decisions would be easy. You could
simply calculate the value of each competing option and select the one with the highest value.
In engineering decisions, where there is a considerable amount of uncertainty and where the
possible outcomes are quite complex, decisions are not that easily made. The objective of
finding the optimal solution—that is, the best set of choices at the decision nodes—can be
achieved by applying a “roll-up” process to the decision tree. Starting with the leaf nodes and
progressing recursively toward the root, we label each node by the value of the situation it
represents. Each chance node is labeled with the expected value of its successors, and each
decision node is labeled with the value of the choice that has the largest value.

Suppose you are an engineer working in the production line and you are asked to
manufacture a product as fast as possible so that the company can enter the consumer market
earlier than the competitors. Now, let’s assume that there are two different manufacturing
methods. One (Method A) is possibly quicker (if everything goes smooth, the production
time is 30 minutes) but there is a chance that 30 % of the products manufactured using this
method may come defective from the production line (note that the defective parts have to be
manufactured again which results in a longer production time at the end: 60 minutes). The
production time for the other manufacturing method (Method B) is longer (50 minutes) but
the process does not create any defect on the parts. Which one should you choose?

70% No
Defect 30 Min

Method A

60 Min
30%
Defect

Method B

The decision nodes are represented by squares, chance nodes by circles, and
leaf nodes by triangles.

DriveTek Research Institute discovers that a computer company wants a new tape drive for a
proposed new computer system. Since the computer company does not have research people
available to develop the new drive, it will subcontract the development to an independent
research firm. The computer company has offered a fee of $250,000 for the best proposal for
developing the new tape drive. The contract will go to the firm with the best technical plan
and the highest reputation for technical competence.

DriveTek Research Institute wants to enter the competition. Management estimates a cost of
$50,000 to prepare a proposal with a fifty-fifty chance of winning the contract.
However, DriveTek's engineers are uncertain about how they will develop the tape drive if
they are awarded the contract. Three alternative approaches can be tried. The first approach
is a mechanical method with a cost of $120,000, and the engineers are certain they can
develop a successful model with this approach. A second approach involves electronic
components. The engineers estimate that the electronic approach will cost only $50,000 to
develop a model of the tape drive, but with only a 50 percent chance of satisfactory results.
A third approach uses magnetic components; this costs $80,000, with a 70 percent chance of
success.

DriveTek Research can work on only one approach at a time and has time to try only two
approaches. If it tries either the magnetic or electronic method and the attempt fails, the
second choice must be the mechanical method to guarantee a successful model.

The management of DriveTek Research needs help in incorporating this information into a
decision to proceed or not.

Use mechanical method

0.500
Electronic success
+$150,000
0.500 Try electronic method $0
Awarded contract
-$50,000 0.500
+$250,000 Electronic failure Use mechanical method
+$30,000
$0 -$120,000

0.700
Magnetic success
Prepare proposal +$120,000
Try magnetic method $0
-$50,000
-$80,000 0.300
Magnetic failure Use mechanical method
$0
$0 -$120,000

0.500
Not awarded contract
-$50,000
$0

Don't prepare proposal