In a decision tree, the possible or already occurred initial situation of a project forms the starting point of the decision-making process. Various alternative courses of action can be imagined for this situation, which entail different consequences. From this, subsequent situations can be derived, which represent new starting points for further alternative actions. In order to prevent the decision tree from growing to infinity, a time horizon or a number of stages is determined as a termination criterion, since the probability of occurrence of the situations under consideration decreases as these two components increase. A decision tree should only be used for clear scenarios and interdependent alternatives/situations. (Source: Gabler Management)