The DTREE Procedure

Examples

This section contains six examples that illustrate several features and applications of the DTREE procedure. The aim of this section is to show you how to use PROC DTREE to solve your decision problem and gain valuable insight into its structure.

Example 3.1 and Example 3.2 show two methods frequently used to spread the risk of a venture: buy insurance and enter a partnership. Example 3.1 also illustrates the use of the VARIABLE statement to identify the variables in the input data sets. Example 3.3 illustrates the use of the graphics options to produce a graphics quality decision tree diagram. Example 3.4 illustrates the use of SYMBOL and GOPTIONS statements and the Annotate facility to control the appearance of the decision tree diagram. Example 3.5 demonstrates an application of PROC DTREE for financial decision problems. It also illustrates a situation where redundant data are necessary to determine the value of information. In addition, it shows a case where the results from the VPI and VPC statements are misleading if they are used without care. Example 3.6 shows an application in litigation, a sophisticated use of sensitivity analysis. It also shows you how to deal with the value of future money.

Finally, Table 3.39 and Table 3.40 list all the examples in this chapter, and the options and statements in the DTREE procedure that are illustrated by each example.

Examples

Example 3.1: Oil Wildcatter's Problem with an Insurance

Example 3.2: Oil Wildcatter's Problem in Risk Averse Setting

Example 3.3: Contract Bidding Problem

Example 3.4: Research and Development Decision Problem

Example 3.5: Loan Grant Decision Problem

Example 3.6: Petroleum Distributor's Decision Problem

Statement and Option Cross-Reference Table