Risk Analysis – Quantitative, decision tree analysis
Another common tool in risk analysis is called decision tree analysis. This technique is used to help choose a course of action when different options are available and the outcomes are uncertain.

Decision points and risk events are represented by nodes. Each possible outcome is represented as a branch form that node, and the probability of that outcome is recorded for each branch. A series of decisions and outcomes are represented by additional nodes and branches downstream. The tree continues until all possible decisions/outcomes are elaborated.

The value of any chain of events and decisions is the product of the probabilities along the chain multiplied by the value of the outcome. Risk management suggests you should take action to avoid paths with higher risk value and select the path with the least risk value.