 Hi, this is Dr. Don. I've had a number of students ask me some questions about using tree plan, the decision tree add-in for Excel. And it's true, there are not very many good videos out there showing you how to actually use the tool. And it's a pretty good tool. So I'm going to work through a sample here, a problem, and show you the basics of the tree. In my earlier video I showed you how to download and install and activate decision tree. But you may see something like I'm seeing here. I don't have an add-in tab even though I've installed an activated decision tree. The reason for that, Excel has changed a bit. They continually update it as they do Windows and other Office products. And depending upon the version of Excel update you have and the version of the Windows update you have, you may or may not have this add-in tool visible. But once you've installed an activated tree plan, you can always access using the shortcut key. I'm just going to pick a cell here and use the shortcut control, shift, T as in tango to bring up the tree plan dialog and click new tree. Tree plan will insert a simple basic tree starting with that cell in the upper left-hand corner. And don't worry about where you place tree plan. Tree plan will insert columns and rows as it's needed in order to give itself room to grow branches. This initial tree starts with a decision point, which is label one. And decision, excuse me, tree plan will track and number these decision points and event points sequentially and that can be a help a little bit to show you which decision it's saying is the best path. But here one thing I would recommend you do is to get familiar with the display of these zeros. Some of them are cells where you would enter data, enter values, others are output cells. I wish tree plan would color code them, but it doesn't. This of course is an output cell and you can see the formula there. This is an input cell. It's just a zero. This is an output cell. It's linked to another cell. And this, the endpoint, the value of an outcome is also a formula cell. Now you can override the formulas, particularly these outcome formulas and input your own terminal values there. I would recommend for the work that most people do to let tree plan make those calculations and only use this cell where there is no formula to input the values of cost and benefits of decisions and events. The square represents a decision point. And in this decision point there were two alternatives, alternative one and alternative two. The basic tree, when it gives you those alternatives, gives you an endpoint, an output, an outcome, and those are triangles. The other symbol you will see is a circle, which is an event. And I will show you how to do that. Now you can click on a cell, but the danger is that you can see that's a graphic there. And what you really want is the cell. The safest way I've found is click an empty cell adjacent to the cell I want to modify and then use the arrow keys to make sure I've selected the right cell. Now I've selected that first cell. If I go to control shift T again, I bring up the decision tree dialog box and here I can add a branch, I can enter a decision or I can change it to an event. Trees can start with events or decisions. This particular example is going to be a decision, but you can change it and you can see there's some other options that will show up depending upon which type of cell you're clicking on. You can copy a tree, you can insert an event, you can shorten the tree, you can change, and you can do some other things and there's some other options that I'm not going to get into in this video. In this particular sample problem, the company has to make a decision. Is it going to produce model one or model two? I'm going to rename these cells. You can either type directly in and it's okay to click on with your mouse these labels. I'm just going to use equal and select model one and then click on alternative two and model two. Now model one, if they make that decision has a cost. It costs $200,000. In order for my model, I'm going to enter that as a negative equal minus that value. I've got a minus $200,000 cost there. Model two, I've got an equal minus $175,000. That gives me a minus cost there. You can see the model is starting to fill itself out, the decision tree. You can change the outcomes here of the tree from maximizing a value, which is the way it defaults. You can change it to minimize. If I were minimizing, then I wouldn't put the minuses in there. In this case, we're looking to get a maximum expected monetary value so we leave it in the default. After we make those decisions, we can either have high demand or low demand. Again, I'm going to click on an adjacent cell, use my arrow to go down there, and then bring up control shift tango again. I want to change this to an event node. We have two possible events there. That's the default. I'm going to click OK. It's going to insert after a few seconds. It changes your tree. Of course, as it changes a cell, we have to reformat things. This outcome 3, I'm going to change to be high demand. Outcome 4 is going to be low demand. The probabilities are different than the default 0.5 and 0.5. I'm going to make that equal to 0.7. When it called your tension, tree plan requires these probabilities to equal 1. When you have an inequality, it does not equal 1, you'll see the downstream NAs. That's the clue that you've got a probability pair wrong somewhere. If I change that back to 3, I should get my tree to be corrected. I should call to your tension that there is no undo command when you're using tree plan. You can't use the Excel undo either. I would advise you to save often so you can always back up if you make a mistake and not have to redo the entire tree. If I have a very complex tree, I'll actually save and change the name of the file slightly. Dash A, dash B, dash C to make sure I can go back in case I make a dumb dumb somewhere. One of the things I want to show you before I finish this tree, I'm going to select this cell and then I'm going to go Ctrl-Shift-T. I'm going to copy that subtree, click OK, and then I'm going to go down here and select again, Ctrl-Shift-T, and I'm going to paste my subtree. After a few seconds, it may give you a warning, but it will add that tree there. There we go. If you've got a very complex subtree that can save you a bit of time, I'm going to reformat this again. Now we need to input the cost. If we make Model 1 and have high demand, we get a profit, a revenue rather, of $500,000. So I'm going to just link that cell there to $500,000. If we have low demand, our revenue is only $450,000, I'm sorry, $160,000 from our low demand. If I make Model 2, our high demand revenue is $450,000 and our low demand revenue is $160,000 again. So that finishes the tree. You can see that we have these output values there of $300,000, $40,000, $275,000, and $115,000 for each of those paths, but because of probabilities, the expected value of selecting Model 1 is $198,000 and the expected value of Model 2 is $188,000. So the best path is this path that leads to the $198,000 expected monetary value for that decision path. So I hope this helps.