ABSTRACT
This chapter focuses on decision trees for evaluating the risky alternatives. It describes a method for calculating the value of market research proposes dependency modelling as a powerful risk management technique. The chapter outlines the role of stochastic modelling in risk simulation and analysis. The invention of the approach reviewed in the chapter is credited to Professor John Gordon, who proposed dependency modelling as a new way of looking at risk. As the chapter examines that decision trees help managers to consider the alternative outcomes that might flow from choices and chance events along the way. The generic brand viability model, from which the illustrative examples in the chapter are drawn, calculates a 66 per cent probability of overall target shortfall, assuming a uniform 10 percent failure rate for each ultimate dependency. As illustrated by the examples in the chapter, dependency models are efficient representations of an accepted process by which a particular objective is expected to be achieved.
