Posted: October 27th, 2022

Summarize the implications of your decision tree analysis by doing the following:

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Please review the attached documents and complete the required tasks by answering the questions below. Note: All of this can be completed on the “data analysis template” in the workbook. This does not require a traditional paper writing format.
Attached Documents: Analysis & Examples from assignment
INTRODUCTION Managers are required to organize, interpret, and display data that is relevant to the real-world business decisions they must make in their businesses, and these business decisions must be based on relevant and reliable data. The use of analytical tools will improve your ability to use data to make these informed decisions.
In this task, you will address the business situation in the attached “Linear Regression Analysis Resources” scenario. You will access the scenario and data set by entering your student ID number in the “Start” tab of the attachment, then continuing to the “Scenario” tab. Using this data set, you will perform a linear regression analysis and write a report in which you recommend a solution by summarizing the key details of your analysis. Scenario
Task 2: Decision Tree Analysis Scenario Decision tree analysis is used to determine a recommended decision alternative or an optimal decision strategy when a decision maker is faced with an uncertain and risk-filled pattern of future events. The goal of decision tree analysis is to identify the best decision alternative, or the optimal decision strategy, given information about the uncertain events and the possible payoffs of selections.
You are the chief operating officer (COO) at the Major Pharmaceutical Company (MPC). The chief executive officer (CEO) of MPC has asked you to review the company business plan for drug line development. You have been given a market research report which includes the state of the drug marketplace with probabilities and payoffs (you will see this below and also on the “Data Analysis Template” tab). You are charged with presenting an analysis report of the plan, including recommending a course of action. The CEO wants to know the best immediate action, along with a backup action, and wants clarity on the basis of your recommendations.
You will consider the following possible active alternative actions: 1) develop a new drug (exploration) or 2) focus on modifications to an existing drug (exploitation of new applications). Within these two alternatives, there are two possible states for market conditions. You must consider the probability of success and the payoffs to determine the course of action based on the calculated expected values. You have been provided with the market research report data. You are to use the data from the market research to complete the task, including payoff boxes on a decision tree diagram. Then, you may use the lower table on the template to show how you determined expected values for each state of nature node.
A. Describe a business question that could be answered by applying decision tree analysis and is derived from the scenario in the attached “Decision Tree Analysis Resources.”
B. Identify the relevant data values required for your decision tree analysis, including the following: • probabilities • payoffs • profits • demand
C. Report how you analyzed the data using decision tree analysis by doing the following: 1. Complete a decision tree diagram, including each of the following: • state-of-nature nodes • calculated payoffs, each expressed out to two decimal places • expected values, each expressed out to two decimal places
Note: This display should be a summary or representation of the data provided, not raw data. 2. Justify why decision tree analysis is the appropriate analysis technique, including relevant details from the scenario to support your justification.
D. Summarize the implications of your decision tree analysis by doing the following: 1. Explain the role of probabilities and the role of demand for each branch. 2. Explain how the expected value of each node is determined based on payoffs.
3. Discuss one limitation of each of the following: • the data elements • the decision tree analysis
E. Recommend a course of action that addresses the business question from part A and is based on the results of your decision tree analysis. F. Acknowledge sources, using in-text citations and references, for content that is quoted, paraphrased, or summarized.

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