Comparison of supplier proposals with the decision tree method

Abstract

The decision theory was investigated for use in a company with the application of the Decision Tree Method to compare and decide upon three proposals for supply of imported steel. The complexity of company procedures and need for a rapid and assertive decision pointed to a decision making approach to improve the quality and timing of this process. The sequence supported by the Decision Tree led to a decision coherent with all the procedures involved in the Method. Estimated risk scenarios and Expected Monetary Values were compared. The Ukrainian proposal won although the price was not the lowest but it had instead the best probability of business success as well as the highest Expected Monetary Value.