Decision Tree Analysis

Decision Tree Analysis

Gerber & Phthalates Controversy

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


sales.gif (694 bytes)

Favorable

Decrease



cspc.gif (1021 bytes)

Proactive

Unfavorable

Increase

Phthalates Controversy

sales.gif (694 bytes)

Decrease



Increase


sales.gif (694 bytes)

Reactive

Favorable

Decrease



cspc.gif (1021 bytes)
Unfavorable

Increase


sales.gif (694 bytes)

Decrease



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Authors of the article
Jay Buckley
Jay Buckley
Thomas J. Dudley, DBA
Thomas J. Dudley, DBA
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