Application of Portfolio Theory in Decision Tree Analysis

David T. Galligan, Charles Ramberg, Charles Curtis, James Ferguson, John Fetrow

Research output: Contribution to journalArticlepeer-review

14 Scopus citations

Abstract

A general application of portfolio analysis for herd decision tree analysis is described. In the herd environment, this methodology offers a means of employing population-based decision strategies that can help the producer control economic variation in expected return from a given set of decision options. An economic decision tree model regarding the use of prostaglandin in dairy cows with undetected estrus was used to determine the expected return of the decisions to use prostaglandin and breed on a timed basis, use prostaglandin and then breed on sign of estrus, or breed on signs of estrus. The risk attributes of these decision alternatives were calculated from the decision tree, and portfolio theory was used to find the efficient decision combinations (portfolios with the highest return for a given variance). The resulting combinations of decisions could be used to control return variation.

Original languageEnglish (US)
Pages (from-to)2138-2144
Number of pages7
JournalJournal of Dairy Science
Volume74
Issue number7
DOIs
StatePublished - 1991

Keywords

  • NO PG
  • PG
  • PG
  • no prostaglandin and bred on signs of estrus
  • portfolio theory, decision tree analysis, prostaglandin
  • prostaglandin and bred on signs of estrus
  • prostaglandin and bred on timed basis

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