*Introduction to Project Management* |

## The DTREE Procedure

PROC DTREE interprets a decision
problem represented in SAS data sets, finds the optimal decisions, and
plots on a line printer or a graphics device the decision tree showing
the optimal decisions.
A decision tree contains
two types of nodes: decision nodes and chance nodes.
A decision
node represents a stage in the problem where a decision is to be made
that could lead you along different paths through the tree.
A chance node represents a stage in the problem where some
uncertain factors result in one of several possible outcomes, once
again leading you to different branches of the tree, with associated
probabilities.
The structure of a decision model is given in the STAGEIN= data set.
This data set (described in detail in Chapter 3, "The DTREE Procedure")
specifies
the name, type, and attributes of all outcomes for each stage
in your model. This is the only data set that is required to produce
a diagrammatic representation of your decision problem. To evaluate
and analyze your decision model, you need to specify the PROBIN=
and PAYOFFS= data sets. The PROBIN= data set specifies the
conditional probabilities for every event in your model. The PAYOFFS=
data set specifies the value of each possible scenario (sequence
of outcomes). The objective is to use the information summarized in
these data sets to determine the optimal decision based on
some measure of performance. One common objective is to maximize the
expected value of the return. Figure 1.7 illustrates the data flow for PROC DTREE.

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**Figure 1.7:** Input and Output Data Flow in PROC DTREE

You can use PROC DTREE to display, evaluate, and summarize your
decision problem. The procedure can be used to plot the decision
tree in line-printer or graphics mode. The optimal decisions are
highlighted on the output. Further, a summary table can be displayed
listing all paths through the decision tree
along with the cumulative reward and the evaluating
values of all alternatives for that path. The summary table
indicates the optimal evaluating value for each path with an asterisk.
The procedure can also perform sensitivity
analysis and what-if analysis. A simple decision problem is described in Example 1.9.

Copyright © 1999 by SAS Institute Inc., Cary, NC, USA. All rights reserved.