7′ video explanation of the essential logic of decision tree analysis based on Expected Monetary Value (EMV) by way of an example worked on a white board.

As can be seen easily, the EMV and decision tree constructs are potentially quite valuable, and the logic and math involved are extremely straightforward.

However, as can also be seen, most of the work involved here is actually in the business analysis set up that underlies the decision tree, that is, in the reduction of a typically complex set of options for going forward to just two or three key decisions, in the estimation of investment costs, and then in the conduct of the quantitative risk analyses that yield the probabilities of success and failure.