Which of the following best captures the purpose of a decision tree in decision-making?

• A. To map random guesses
• B. To map sequential choices and outcomes to support decision-making.
• C. To show only one path
• D. To replace human judgment with a formula

Answer: (B)

Decision trees are used to map sequential choices and their possible outcomes so you can compare options and their expected consequences under uncertainty. Each decision point leads to branches that represent different actions, linked to outcomes with associated probabilities and values, which helps you assess which path offers the best expected result or risk profile. This is why the choice that emphasizes mapping sequential choices and outcomes to support decision-making is the most accurate description. It’s not about random guesses, it doesn’t force a single path, and it doesn’t replace human judgment with a formula—it's a structured tool to explore multiple futures and inform the decision-making process. For example, you can lay out a sequence like whether to launch now or delay, the possible market responses, and the financial outcomes, then compare which option yields the better expected payoff.