Information Based Decision-Making Assignments

ASSIGNMENT

This project applies the methods of this course to analyze a business decision problem. This analysis can be done individually or in teams of up to four people. Examples of appropriate business decision areas include process improvement or re-engineering, facility siting, new ventures, new products/services, acquisitions, divestments, capital expenditures, lease-buy, make-buy, personnel planning, technology choice, and research/development planning.

SPECIFIC REQUIREMENTS

The project must use the decision analysis methods that we are covering in class. At minimum, the decision problem must have (1) at least three alternatives, (2) at least three evaluation measures, and (3) significant uncertainty about some important element of the decision. You must consult at least two outside expert data sources for information. These sources must include both written material and an expert. While these requirements are minimums, the real requirement is that the decision problem be defensively analyzed. That is likely to require more extensive analysis than the minimums.

There are three deliverables: 1) a written proposal, 2) an oral interim report, and 3) oral and written final reports. The deliverables are cumulative, and much of what you prepare for each assignment can be used in later assignments. Note that each team only submits one copy of each written deliverable.

Proposal: Less than two double-spaced typewritten pages, excluding tables or figures, and includes: (1) a summary of the decision problem to be analyzed, (2) a preliminary list of evaluation considerations with evaluation measures, (3) a preliminary list of alternatives to be considered, and (4) proposed expert data sources to be consulted.

Interim Presentation: The oral interim presentation contains all the information needed to complete the analysis of the decision problem except that it does not have to include the final numerical calculations and conclusions. Address this presentation to someone who understands the material presented in this course. Most project teams choose to make computer-based presentations using PowerPoint. If you do this, or use overheads in your presentation, please provide the instructor with a copy of your overheads at the beginning of your presentation. (Legible reduced overheads-two or six overheads to a page-are preferred.)

Use the following outline for the interim presentation:

  1. Problem Statement: Overview of the decision problem and the major considerations in analyzing it.
  2. Evaluation Considerations and Evaluation Measures: Describe the process used to determine evaluation considerations and evaluation measures, including a discussion of other evaluation considerations that seem relevant and the reasons that they were not included. Present a value hierarchy, and completely describe the final set of evaluation measures. Thus, completely present any constructed evaluation measure scales.
  3. Decision Alternatives: Describe the process used to determine alternatives, including a discussion of other alternatives that seem relevant and the reasons these were not analyzed. Describe the final set of alternatives used in the decision analysis.
  4. Value Function Assessment: Present the general procedure used for the assessment but not a blow-by-blow description. Show the parameters for the value function.
  5. Scenarios: Present the scenarios used to analyze the impact of uncertainties. Describe the process used to develop the final set of scenarios, as well as other scenarios that seem relevant and the reasons these were not included.
  6. Data Collection and Evaluation Measure Scores: Present the procedure used to determine the evaluation measure scores (levels) for each alternative under each scenario. Present the evaluation measure scores for each scenario, perhaps in one or more tables.
  7. Value Calculations and Sensitivity Analysis: Briefly describe how you will carry out the value computations required to complete your evaluation.

Final Presentation and Report: The final presentation and the final written report include (perhaps with corrections) the material in the interim presentation and extend this to complete the numerical evaluation of alternatives. As with the interim presentation, if you use overheads or PowerPoint for you presentation, please provide the instructor with a copy of your overheads at the beginning of your presentation. (Legible reduced overheads-two or six overheads to a page-are preferred.)

The length of the written report must be less than ten double-spaced typewritten pages, excluding tables or figures. With the exception of the Conclusions section, the audience is the same as for the interim presentation. Address the Conclusions section to a less technical audience, as discussed below.

Use the following table of contents for the written report:

  1. Problem Statement: The same as the corresponding section in the interim presentation, except for any updates or changes.
  2. Evaluation Considerations and Evaluation Measures: The same as the corresponding section in the interim presentation, except for any updates or changes.
  3. Decision Alternatives: The same as the corresponding section in the interim presentation, except for any updates or changes.
  4. Value Function Assessment: Similar to the corresponding section in the interim presentation, except for any updates or changes. Also include the assessed "raw data"' used to determine the value function, perhaps in a table. Show the math used to obtain the final value function from the assessed raw data (perhaps in a figure), as well as the parameters for the final value function.
  5. Scenarios: The same as the corresponding section in the interim presentation, except for any updates or changes.
  6. Data Collection and Evaluation Measure Scores: Similar to the corresponding section in the interim presentation, except for any updates or changes. Provide references for data sources, including interviews with experts, in standard bibliography style.
  7. Value Calculations and Sensitivity Analysis: Present the value calculations for the alternatives for each scenario, as well as a sensitivity analysis. Briefly describe how these computations were done, but you do not have to present the actual computations, since you are using a computer to do the calculations. Include the spreadsheet equations for your analysis as an appendix to your report. Conduct and present a systematic sensitivity analysis to investigate how variations in assumptions impact the analysis results.
  8. Conclusions: Present your conclusions based on the analysis in the preceding sections, including a qualitative discussion of the reasons the preferred alternative is best. The goal of this section is that someone who does not understand the details of decision analysis methods will find your Conclusions section to be a convincing argument for the preferred alternative. That is, the analysis should not be a mysterious procedure, but rather a way of developing insight about the key factors in the decision and how these lead to selection of the preferred alternative.

The oral presentation should also follow this general outline, but adjust it to the time available. Thus, you will probably not present some of the details of computation procedures and results that are required for the written report

GRADING

The proposal must be handed in but is not graded. The grade for this assignment is based one-third on the interim and final presentations (each of which count equally), and two-thirds on the final report. It is anticipated that all members of a particular team will receive identical grades. However, some team members may receive lower grades based on a lack of contribution as assessed by other team members. Each team is responsible for dividing up the work and organizing its activities.

The primary basis for grading the written final report is the degree to which the work, as presented in the report, is complete, accurate, and defensible, and, in addition, how well your results are explained in lay terms in the Conclusions section. Clarity and accuracy of presentation are graded to the extent these make it difficult to judge the quality of the analysis. Examples of common problems in report presentation include 1) failure to include the required information as listed above, 2) failure to follow the specified outline, 3) failure to reference figures, tables, or appendices in the text, and 4) failure to include references for data sources.

The oral presentations are graded on clarity, accuracy, and completeness of the presentation, as well as appropriate use of overheads or other visual aids, and ability to respond to questions about the analysis. Each presentation should be sufficiently detailed for the listener to judge the quality of the analysis, but the level of detail should also be adjusted to the available time so that the typical listener is not buried in so much detail that he or she cannot keep up with the presentation.

The oral presentations should be self-contained and directed at someone who understands the material presented in this course, with the exception of the Conclusions section for the final presentation. The Conclusions section should be directed at presenting a convincing case for the preferred alternative to a lay audience. Examples of common problems in presentations include 1) failure to present key elements of the analysis, 2) lack of coordination between the spoken presentation and the visual aids, 3) inclusion of so much material in the visual aids that the listener cannot absorb this material in the available time, and 4) failure to direct the Conclusions section at a lay audience.

When each final written report is submitted, each team member has the option of providing a confidential written assessment of the contribution of each other member of his or her team. Specifically, this contribution can be rated as either "meeting expectations" or "not meeting expectations." A team member who receives a substantial number of "not meeting expectations" ratings will have his or her grade lowered for the project assignment. Note that the intent of this procedure is not to make fine distinctions regarding the level of participation, but rather to identify freeloaders. It is hoped that teams will organize and conduct their activities so that there are no freeloaders.

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