Decision Tree Analysis

This tree calculates the potential economic impact on Gerber based on the outcome of the CPSC investigation and whether Gerber takes a proactive or reactive approach. Outcomes are based on estimates of the gain or loss for each outcome and the anticipated likelihood that each scenario will occur. The most positive outcome, shown on the uppermost branch, results from a proactive approach to the issue by Gerber and a favorable report on phthalates by the Consumer Products Safety Commission. Enter new gain/loss estimates and/or probability estimates (must total 1) and click on “calculate” at lower left to test different scenarios.

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Estimated Gain/Loss Estimated Probability Adjusted Gain/Loss Estimated Outcome Increase Favorable Decrease Proactive Unfavorable Increase Phthalates Controversy Decrease Increase Reactive Favorable Decrease Unfavorable Increase Decrease