Using decision models in the real world

Choices in the business world are made with the aid of various tools that allow calculations of expected monetary value (EMV).The article discusses the ways that the probability of a risk is quantified, and the 'risk event impact' is calculated to arrive at an EMV value.Decision trees create EMVs for multiple options and allow project managers to make informed choices.Monte Carlo simulations enable a range of probable outcomes to particular decisions.The usefulness of decision trees, however, breaks down when choices are complex and the variables between them are not comparable.But EMV can be combined with probability distributions to enable choices to be made from a range of options.As long as the inputs to these formulas are reliable, they can be very useful tools for project managers.
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