Break-Even Analysis

It is often useful to test the assumptions in your model. Suppose you want to know how low your chances of getting the rezone approved must be before you would change your decision. To do this, modify your model slightly by changing the definition for Request Rezone from

Request Rezone:=-5000->emv(60%,Approved,40%,Denied)

to

Request Rezone:=-5000->emv(P,Approved,1-P,Denied)

and add the node

P:=60%

Next, use the Goal Seek tool to find the value for P required to make the value of Buy Property equal to zero (this is the value at which you would switch to Do Nothing). The Goal Seek tool is available in the Tools menu.

DecisionPro will calculate the required percentage and update your tree. In this case, 42% is the minimum probability of a successful rezone required to go ahead with the project.

You can use the same technique to find break-evens for outcome values as well. This information can tell you how sensitive your model is to key assumptions and whether you should spend time refining those assumptions.