For Evaluation Only TreePlan Trial Version, For Evaluation Only 0.5 Promotion in 12 Months .333333 Stay in Employment Asked to leave the Bank .5 0.333333 No Promotion in 12 Months Stays in Current position .333333 Promotion in 12 Months .5 Business Succes .5 Start Own Restaurant Business Failure Break Even 0 0 For Evaluation Only TreePlan Trial, For Evaluation Only For Evaluation Only For Evaluation Only TreePlan Trial, For Evaluation Only

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Decision Tree Analysis for Banking Promotion and Career Pathway

Introduction

Decision tree analysis is a powerful tool used for making informed decisions in situations that involve uncertainty. In this assignment, we will analyze a hypothetical scenario involving promotion prospects within a bank and the subsequent career pathway options that arise from those prospects. Specifically, we will focus on the decision-making process regarding promotion, employment security, and alternative career paths, such as starting a restaurant business. This analysis will detail the potential outcomes, their associated probabilities, and the financial implications of each decision, ultimately presenting a comprehensive view of the decision-making environment.

Scenario Overview

In our scenario, an employee at a bank faces two primary decisions: whether they will receive a promotion within the next year, and if they will choose to pursue an alternative career by starting their own restaurant business if they do not receive the promotion or if they feel insecure in their current banking position.
1. Promotion Decision:
- Probability of receiving a promotion in the next 12 months: 50%
- Probability of not receiving a promotion in the next 12 months: 50%
- If promoted, the employee may continue a successful career in banking or may choose to start a restaurant.
2. Alternative Career Path:
- If the employee does not receive a promotion or is asked to leave the bank:
- Probability of business success: 50%
- Probability of business failure: 25%
- Probability of breaking even: 25%

Decision Tree Construction

A decision tree provides a visual representation of the decision-making process, highlighting the progression from one decision to another and the resulting possible outcomes. We will construct this tree based on the probabilities and outcomes previously described.

Step 1: Primary Decision Node

The first decision node represents the promotion decision:
- receives promotion (50%)
- does not receive promotion (50%)

Step 2: Subsequent Decision Nodes

For the employee who receives a promotion:
- Success in the banking career (assumed financial gain) (assumed 0,000 salary)
- Start own restaurant (with three possible outcomes)
- Business success, yielding 0,000
- Business failure, yielding -,000
- Break even, yielding

For Evaluation Onlytreeplan Trial Version For Evaluation Only 05 Www

For Evaluation Only TreePlan Trial Version, For Evaluation Only 0.5 Promotion in 12 Months .333333 Stay in Employment Asked to leave the Bank .5 0.333333 No Promotion in 12 Months Stays in Current position .333333 Promotion in 12 Months .5 Business Succes .5 Start Own Restaurant Business Failure Break Even 0 0 For Evaluation Only TreePlan Trial, For Evaluation Only For Evaluation Only For Evaluation Only TreePlan Trial, For Evaluation Only