Linking the Nodes

When the definition is complete, choose the Link Nodes item from the menu. This option fills the Total Value column of node definitions with the appropriate references to worksheet cells. After linking the program issues the Calculation command to solve the problem. The results are shown on the second figure.

Worksheet after linking and calculation.

The results of the calculations determine for each decision node the optimum decision and the associated expected value. For each chance node, the expected value is computed. For the example, the repairwoman should do every test available if the results of previous tests do not suggest immediate replacement of the motherboard. The expected cost associated with the optimum policy is $364.

When the complete decision tree has been constructed, the automatic calculation mode can be turned on. You can easily experiment with various parameters of the problem to see how changes affect the solution. The worksheet is modified to incorporate new decision alternatives or new chance realizations by inserting additional rows in the associated ranges defining the nodes. The formulas for expected values and optimum values automatically adjust. New links and new nodes may also be added, but the Link Nodes item in the menu should be selected to readjust references after major changes.

The Decision Add-in performs its operations on entire workbooks. Thus complex models may have decision and chance nodes defined on different worksheets. Care must be taken to give all nodes unique names. If you define links that result in circular references (the value of a number depends on itself), you will receive error messages from the Excel application.

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