DecisionBranch

Launch a product decision tree template

Launch nationally, pilot first, or hold?

Use this template
RecommendedLaunch nationallyExpected value 42,000 · 6,500 ahead of Pilot in one city first

The tree

Launch the new product?−50k40%60%−15k50%−45k70%30%50%−45k10%90%Launch the new product?EV 42,000→ Launch nationallyLaunch nationallyEV 92,000Strong demand200,000Weak demand20,000Pilot in one city firstEV 50,500Pilot succeedsEV 101,000→ Roll out nationallyRoll out nationallyEV 146,000Strong demand200,000Weak demand20,000Stop after pilot0Pilot failsEV 0→ Stop after pilotRoll out anywayEV 38,000Strong demand200,000Weak demand20,000Stop after pilot0Don't launch0

Outline

# Analytical: should we launch, pilot first, or hold?
Launch the new product?
  Launch nationally (cost 50000) # full marketing budget
    Strong demand (p 0.4): 200000
    Weak demand (p 0.6): 20000
  Pilot in one city first (cost 15000)
    Pilot succeeds (p 0.5)
      Roll out nationally (cost 45000)
        Strong demand (p 0.7): 200000
        Weak demand (p 0.3): 20000
      Stop after pilot: 0
    Pilot fails (p 0.5)
      Roll out anyway (cost 45000)
        Strong demand (p 0.1): 200000
        Weak demand (p 0.9): 20000
      Stop after pilot: 0
  Don't launch: 0

How to use it

  1. Press Use this template. The tree opens in the editor, no account needed.
  2. Edit the outline on the left. Indentation is the tree; (p 0.4) is a probability, (cost 5000) a cost, : 200000 a payoff.
  3. Watch the expected value and the recommended branch update as you type. Open Analysis for the risk profile and the switch points.