# Fast-And-Frugal Trees In A Nutshell

Fast-and-frugal trees are classification trees with sequentially ordered cues that aid in decision making. Fast-and-frugal trees (FFTs) are very simple illustrations of heuristic decision making. Each tree is comprised of sequentially ordered cues – or questions. In turn, each cue has two branches according to how the question can be answered:

1. If the answer to the question is yes, then the branch leads to the next question in the sequence.
2. If the answer to the question is no, then the branch leads to an exit point in the sequence.

At the final cue in the sequence, both branches lead to an exit point to ensure that a decision is made either way.

## Why is the fast-and-frugal tree useful in business?

Fast-and-frugal trees are particularly useful when decisions need to be made quickly. They are well suited to binary classification problems โ or problems with elements occupying two possible outcomes.

FFTs have been trialed in emergency room scenarios to help physicians triage patients. During a peer-reviewed study, a classification tree of just three cues enabled doctors to diagnose and then direct patients to either a regular nursing bed or the coronary care unit.

Cues were based on historical acute heart disease data, allowing high-risk patients to be identified quickly and accurately. In fact, the process was so accurate that it was a better predictor of heart disease than the clinical judgment of the physicians themselves.

## Constructing fast-and-frugal trees

There are several ways to construct fast-and-frugal trees.

In the emergency room example, physicians had historical data on factors that lead to acute heart disease. Chest pain was one such predisposition, leading to the creation of a cue entitled โChest pain chief symptom?โ with a yes or no answer.

Although FFTs were designed to be simple, they have nonetheless been adapted by using more complex methods. Primarily, this is seen in FFTs that are constructed using a zig-zag algorithm.

Here, the tree is created using positive and negative cue validity. This validity is defined as the proportion of cases with a positive/negative outcome in all cases with a positive/negative cue value. Typically, the first โ or โrootโ โ cue of a zig-zag analysis tree is the cue with the greatest positive (or negative) validity. This ensures that the most significant positive and negative decisions are made first.

Typically, cue validities are determined by using counts and ratios. In more advanced scenarios, they must be estimated using elements of probability theory such as conditional independence. Zig-zag decision trees enhance the already strong fundamentals of FFTs. Given that the tree can be completed with pen and paper, the accuracy of a zig-zag tree is as high as using a logistic regression model.

## Fast-and-frugal tree applications

As noted, FFTs are useful in any situation requiring fast and accurate decisions or risk assessment.

Beyond medical applications, these trees have been used in the military to identify enemy threats and also in courtrooms to decide whether to bail or jail a defendant.

In recent times, fast-and-frugal trees have also shone a light on how customer management decisions are made. Retail banking sales managers who embodied fast, frugal, and adaptive decision making were able to better anticipate client needs.

## Examples of the fast-and-frugal tree in various contexts

• Emergency Room Triage: As mentioned in the description, fast-and-frugal trees have been used in emergency rooms to quickly triage patients. For instance, doctors might ask a series of simple questions about the patient’s symptoms (e.g., “Is the patient experiencing chest pain?”) to determine whether the patient needs immediate care in the coronary care unit or can be directed to a regular nursing bed.
• Military Threat Identification: In military applications, fast-and-frugal trees can be used to identify potential enemy threats. Soldiers on the field might be trained to ask a series of yes-or-no questions about suspicious activities or behavior to quickly assess whether there is a potential threat.
• Courtroom Decision Making: In the legal system, fast-and-frugal trees have been used to aid in decision-making processes. For instance, judges might use a series of sequential cues to decide whether a defendant should be granted bail or held in custody based on the likelihood of flight risk or danger to the community.
• Customer Management in Retail Banking: Retail banking sales managers can utilize fast-and-frugal trees to better anticipate client needs. By asking a sequence of questions about a customer’s financial situation and preferences, the manager can efficiently recommend suitable products or services.
• Product Quality Assurance: Manufacturing companies might use fast-and-frugal trees to quickly assess the quality of products. By asking a series of yes-or-no questions related to specific product defects or issues, inspectors can efficiently determine whether a product meets the required standards.
• Risk Assessment in Insurance: Insurers can employ fast-and-frugal trees to assess risk quickly and accurately. For example, when evaluating an applicant for life insurance, a series of simple questions about the applicant’s health and lifestyle could help determine the appropriate coverage and premiums.
• Marketing and Advertising: Fast-and-frugal trees can aid marketers in segmenting their target audience. By asking key questions about consumer preferences or behaviors, marketers can quickly identify relevant customer segments for specific products or campaigns.
• Product Recommendations in E-commerce: Online retailers can use fast-and-frugal trees to recommend products to customers based on their preferences and past behavior. By asking a series of questions about their interests, previous purchases, and browsing history, the system can efficiently suggest relevant products.
• Medical Diagnosis: Fast-and-frugal trees can assist doctors in quickly diagnosing medical conditions. For instance, in the case of diagnosing influenza, a series of questions about symptoms like fever, cough, and body aches can lead to a rapid decision on whether to prescribe antiviral medication.
• Quality Control in Manufacturing: Manufacturing plants can employ fast-and-frugal trees to assess the quality of products on the assembly line. Inspectors can ask questions about product specifications and defects to decide whether an item meets quality standards.
• Customer Service Chatbots: Chatbots in customer service can use fast-and-frugal trees to address customer inquiries efficiently. By asking a series of questions, the chatbot can quickly narrow down the problem and provide relevant solutions.
• Financial Risk Assessment: Banks and financial institutions can use fast-and-frugal trees to evaluate the creditworthiness of loan applicants. Questions about income, credit history, and outstanding debts can help determine whether to approve a loan.
• Fraud Detection: In the world of cybersecurity, fast-and-frugal trees can be applied to identify potentially fraudulent activities. By asking questions related to transaction patterns and account behavior, the system can flag suspicious actions for further investigation.
• Supply Chain Management: Fast-and-frugal trees can aid in supply chain decision-making. For instance, in inventory management, a series of questions about demand, lead times, and storage costs can guide decisions on ordering and stock levels.
• Environmental Impact Assessment: Environmental consultants can use fast-and-frugal trees to assess the environmental impact of construction projects. Questions about project location, size, and potential impacts on ecosystems can help determine whether a project should proceed.
• Agricultural Pest Control: Farmers can employ fast-and-frugal trees to decide on pest control measures for crops. Questions about the type of pest, crop stage, and weather conditions can lead to informed decisions about pesticide application.
• Educational Assessment: Teachers and educators can use fast-and-frugal trees to identify students who may need additional support. Questions about academic performance, behavior, and attendance can help determine intervention strategies.
• Traffic Management: Traffic control centers can utilize fast-and-frugal trees to make real-time decisions during traffic incidents. Questions about the location and severity of the incident can guide decisions on diverting traffic or dispatching emergency services.
• Restaurant Menu Optimization: Restaurant owners can use fast-and-frugal trees to optimize their menus. By asking questions about customer preferences and dietary restrictions, they can design menus that cater to a wide range of tastes.
• Energy Consumption Reduction: Businesses can employ fast-and-frugal trees to reduce energy consumption. Questions about building occupancy, lighting, and HVAC usage can lead to energy-saving recommendations.
• Human Resources: HR departments can use fast-and-frugal trees for employee onboarding and benefits selection. Questions about employee preferences and needs can help tailor benefit packages.
• Real Estate Investment: Real estate investors can use fast-and-frugal trees to assess potential properties. Questions about location, property type, and rental income can guide investment decisions.
• Epidemiological Studies: Epidemiologists can use fast-and-frugal trees to identify risk factors for diseases. Questions about lifestyle, exposure to toxins, and genetic factors can inform public health interventions.

## Key takeaways:

• Fast-and-frugal trees are heuristic models that are useful for tasks where binary decisions or classifications need to be made.
• Fast-and-frugal trees are made of sequentially ordered cues, otherwise known as questions. Each cue has a binary answer, with one answer leading to a subsequent question and the other leading to an exit point.
• Fast-and-frugal trees are simple and effective decision-making tools. However, the decision-making process is enhanced by using historical data and aspects of probability theory.

## Key Highlights:

• Fast-and-Frugal Trees (FFTs): Simple classification trees aiding decision-making with sequentially ordered cues.
• Cues in FFTs: Each cue has two branches: “yes” leads to the next question, “no” leads to an exit point.
• Usefulness in Business: Ideal for quick decisions and binary classification problems.
• Medical Application: Successfully used in emergency room triage, outperforming physicians’ clinical judgment.
• Construction: FFTs can be built using simple methods or zig-zag algorithms for more complexity.
• Applications: Used in military threat identification, courtroom decision-making, customer management, and product quality assurance.
• Risk Assessment: Applied in insurance for efficient evaluation of applicants.
• Marketing and Advertising: Aid in audience segmentation and product recommendations in e-commerce.
• Enhanced Decision Making: FFTs are effective when combined with historical data and probability theory.

## Connected Thinking Frameworks

Convergent vs. Divergent Thinking

Critical Thinking

Biases

Second-Order Thinking

Lateral Thinking

Bounded Rationality

Dunning-Kruger Effect

Occamโs Razor

Lindy Effect

Antifragility

Ergodicity

Systems Thinking

Vertical Thinking

Metaphorical Thinking

Maslow’s Hammer

Peter Principle

Straw Man Fallacy

Streisand Effect

Compromise Effect

Butterfly Effect

IKEA Effect

Ringelmann Effect

The Overview Effect

House Money Effect

Heuristic

Recognition Heuristic

Representativeness Heuristic

Take-The-Best Heuristic

Bundling Bias

Barnum Effect

Anchoring Effect

Decoy Effect

Commitment Bias

First-Principles Thinking

Goodhart’s Law

Six Thinking Hats Model

Mandela Effect

Crowding-Out Effect

Bandwagon Effect

Moore’s Law

Disruptive Innovation

Value Migration

Bye-Now Effect

Groupthink

Stereotyping

Murphy’s Law

Law of Unintended Consequences