The two tables provide the owner with options to help decide on the best option provided the information given. In Figure 1, the cost is the sellers original purchase price for the land. The name column under the outcome section identifies the various options the seller has available to them. The Value identifies the price the buyer is willing to purchase the land for. Followed up with the probability, or likelihood. Then by multiplying value by probability and putting it in the VxP column. The seller can easily see the amount of return for each of the three options. The total sum is the combining all three options. In some decisions, the decision maker can receive all three, a combination of any of the three or even just one. This case the seller of the land will only be allowed to choose one of the three options. Moreover, there is a single fourth option w...
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...culture and a $15,000 loss for either residential or commercial.
No matter if it is personal or a business decision, every person will be made to make a decision. While there is no one way to choose the best option, using a decision tree or table, can keep the person or group making the decision focused on the facts at hand and remove all doubt created from brain storming. Being able to recognize and understand the elements of a decision tree will also help in the decision process (Bratvold & Begg, 2010). Knowing and weighing out all options before making a decision, will make for a stronger decision. The best decision for the seller is to understand his land will be purchase by either the Zoning Commission or Mr. High Roller and with the data the seller has available the best option is to sell to Mr. High Roller and secure a $10,000-dollar profit.
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