Decision Tree Analysis

The Story of Sinapple 🍍🍎

Sinapple didn’t begin in a boardroom, a tech hub, or even a kitchen. It began in an IB Business Management classroom.

Originally created as a fictional business for a toolkit exercise, Sinapple started life as a humble fresh fruit juice café designed to help students practise break-even analysis and cash flow forecasts. However, somewhere between SWOT analyses and investment appraisal calculations, Sinapple took on a life of its own.

Fast forward a few years and Sinapple is now a global fruit-juicing empire, known for its bold branding, ethical sourcing, and an almost suspicious obsession with apples and pineapples. From smoothie bars in major cities to online delivery across continents, the business has grown far beyond its original exam-question roots.

As with any fast-growing business, Sinapple’s success has led to bigger opportunities—and bigger risks.

A Big Decision for a Bold Business

The founder of Sinapple is now facing the most ambitious decision in the company’s history. With large cash reserves and a fearless attitude to innovation, Sinapple must choose between two radically different expansion options:

  • Launching a fruit-themed theme park, or

  • Developing a fruit-shaped electric car


Both options offer the potential for huge profits, but both also carry the risk of multi-million-pound losses if things go wrong.

Rather than relying on instinct (or fruit-based intuition), the founder decides to consult a business decision-making expert. The expert recommends using a decision tree — a quantitative tool that allows managers to compare different options by analysing probabilities, possible outcomes, and expected monetary values (EMVs).

Why Use a Decision Tree?

Decision trees help businesses to:

  • Break complex decisions into clear, structured options

  • Quantify risk and reward using probabilities

  • Compare investments logically rather than emotionally

  • Justify decisions to stakeholders using data and evidence

In the activity that follows, you will step into the role of Sinapple’s management team and use a decision tree to determine which option offers the better expected outcome — and whether the numbers alone should decide Sinapple’s future.

Student Activity: Decision Tree Analysis

Sinapple is considering two expansion options. Management has estimated the probabilities and financial outcomes for each option.

Option 1: Fruit-Themed Theme Park

  • Probability of success: 0.55

  • Profit if successful: £14 million

  • Probability of failure: 0.45

  • Loss if unsuccessful: £6 million

Option 2: Fruit-Shaped Electric Car

  • Probability of success: 0.40

  • Profit if successful: £20 million

  • Probability of failure: 0.60

  • Loss if unsuccessful: £8 million

Student Tasks

  1. Construct a decision tree showing both expansion options

  2. Clearly label:

    • Decision points

    • Outcomes

    • Probabilities

    • Financial gains and losses

  3. Calculate the expected monetary value (EMV) for each option

  4. Recommend which option Sinapple should choose based on EMV

  5. Explain:

    • Why using a decision tree is useful for managers

    • Why relying solely on a decision tree may be limited