Decision Analysis Case 1- |Baleston

Decision Analysis

Case 1- |Baleston Council

Benefits

Site

Visual Impact

Transport

Risk

Costs £m

Weighted attributes

Inston Common

Risk

Jones Wood

Peterton

Red Beach

Treehome Valley

WEIGHTS

The weights we have used are from a business perspective and based on the responses of the managers: the highest weighting was attributed to the risk of contamination (100); the visual impact received 80 (it was considered 80% as preferable as the risk of contamination). On the other hand, the transport from the site was given 75, because it was considered to be 75% as preferable as the risk of contamination. In order for all of them to add up to 100, the weightings will be 39, 31 and 30, given the proportions for each.

The weighted attributes were calculated by multiplying the weights we have determined for each of the factors that might affect the final decision with the respective value.

The costs and value of aggregate benefits has been plotted below on a X/Y - axis, each representing a different series and color.

The efficient frontier links Treehome Valley to Jones Wood and to Peterton, these representing the dominant options of either low cost/high value or very high value.

Case 2 - Warehouse Expansion

ES EF LS LF

SLACK

Finish 31 days to completion

Critical path will be a => B => J

The minimal completion time will be 19 weeks and is obtained by adding up the number of weeks needed for the activities on the critical path, namely activities a, B and J, which have the slack time equal to 0. At the same time, the probability that the project will be completed before 40 weeks is 82.5%

Case 3 - Frank getting raise

Passes: 0.4 probability to get raise

Does not pass: 0.2 probab. For raise

0.2 probability to get the raise; 0.8 not to get the raise

Passes: 0.6 probab. To get raise **

Does not pass: 0.2 probab. For raise

Passes: 0.8 probab. To get raise

Does not pass: 0.6 probab. For raise couple of considerations before we actually start to calculate the Estimated Monetary Value. First of all, at the beginning of his decision making process, Frank has three decision tree paths he can go on: he can decide to follow the AttoSoft course, he can decide to follow no course at all or he can decide to follow the BSS, module 1. If he decides on the BSS module 1, then, if he completes the first module, he can decide whether he wants to do BSS module 2 as well.

A positive outcome at the end of each study, meaning that Frank passes the course, provides an increased probability that he will get the raise. If he does not pass, then we will apply the probability that is used in case no course is taken, as the case study mentions. In the situation that Frank passes BSS1, but does not manage to pass BSS2, then this branch will count as if Frank only completed BSS1.

As such, we will have the following calculations of the Estimated Monetary Value.

1. No course. The probability to get the raise is 0.2, so the EMV = 0.2 *10,000 + 0.8 * 0 = 2,000

2. Takes Attosoft: The probability is calculated by multiplying the probability to get the raise in case of passing the course with the raise itself, adding the product of the probability of getting the raise and the raise in case the course is not passed, but decreasing the overall cost of the course.

EMV = 0.4*10,000 + 0.2*10,000-3,000 = 3,000

3. Takes BSS, module 1 With a similar mechanism as previously presented,

EMV = 0.6*10,000 + 0.2*10,000-5,000 = 3,000

4. Takes BSS modules 1 and 2 With a similar mechanism as previously presented,

EMV = 0.8 * 10,000 + 0.6* 10,000-7,000 (the sum of both courses) = 7,000

As we can see from the calculation of the EMV for all four options/branches, the best option is to take modules 1 and 2 of BSS, maximizing the overall value.

Case 4 - Sensitivity analysis

A.: Driving the car means that the total distance is 60 miles times the 3.50 hours, which is equal to 215 miles. This means that to the cost of driving there is an additional cost of 40.5 cents times 215 miles, which is equal to $87.075.

To the U.S. Airways flight, one needs to add the additional cost of the taxi ride, which is equal to $15.

1) only business travelers

Benefits

Transport

Speed

Cost

Utility

Costs

Weighted attributes

Amtrak

Acela Express

Airplane

Personal Car

2) only leisure travellers

Benefits

Transport

Speed

Cost

Utility

Costs

Weighted attributes

Amtrak

Acela Express

Airplane

Personal Car