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CaseAssignments MM5010StrategicDecisionMakingand Nego8a8on 29111311HaidirAfesina(fezi) 29111328HendraWinata 29111329MitaListyatri 29111338AndekPrabowo 29111344AprianEkaRahadi 29111384ChairunnisaMirhelina 29111387FranciscusXaveriusKresnaPaska 29111393AgungIndriPramantyo

#1.ExxconValdez Situa>onAnalysis
Iden8fyConcerns MajorConcern Subconcern Timing H M H H H H L SetPriority Trend L H H L H H M Impact H H H M H H L Process Ac8on needed DA PPA DA PA PA DA DA

Preventmoreoil Numberofdamage fromspilling Compartments Tankerslippingo DispersingSpilled oil ContainingOil spill Environmental concerns Availabilityof Chemical Floa>ngBooms Protec>ngFisheries Protec>ngIsland Shore

#2.TheADAMSFamily Situa>onAnalysis
Iden8fyConcerns MajorConcern Tom`swork Subconcern Projects NewJob Financial problems Bracesforkids Newcar Painthouse Waterleakin basement Sarage[ngajob Managingchildren Findingpart>me job Timing H M L M L M L L SetPriority Trend M L M H M M L L Impact H M M H M M H H Process Ac8on needed PA DA DA DA DA PA/DA PA/DA DA

PROBLEMANALYSIS
PRIMARY SECONDARY Burgerdecidedtoletthedirector Anewalloyinzenithssheet wasaccusedofdrinking steeliscausingexcessive employees Lackofdiscipline burninginthepresses

Workersstrictinspec>onwhether someonedeliberately Workerstriketogogetanew contract Allexecu>veagreeFactory processingcapacityandlabor problems,inaddi>onto producing Theneedoftrainingtoimprove employeemoral

Devia>on:Excessiverejectsfromburingonquarterpanels
Is WHAT devia8on object Burrs Pantherpanels Isnot dis8nc8on cause Anyothercomplaints Deepdraw cheetahpanels

#3.KTProblemAnalysis

WHERE onobject observed WHEN onobject observed

Pantherpanels Lines1,2,&4 Line2(09.33AM) Line1(10.18AM) Line4(11.23AM) Badburring Line2:11%reject Line1:10%reject Line4:15%reject

Otherpartsline3 Anyburrsbefore these8mesonline 2,1&4 Line3atany8me Line3reject

Deepdraw StacksofZenith blanksbegantobe usedatthis8me

NewalloyinZenith steel

EXTEND HowMuch Howmany

Rejectratesnotpropor8onaltoinvolvement inFarrelValen8conict

Possiblecausefor test

Anewalloyinzenithssheetsteeliscausingexcessiveburninginthepresses

TheNutsnBoltsAutoPartsCompanymanufacturesanddistributesautopartsthroughouttheUnitedStates.Overaperiodof severalmonths,theyhavebeenreceivingalargenumberofcomplaintsaboutcorrodedboltsfromconsumers.Virtuallyallofthe complaintswerereceivedbetweenJuneandAugust.Therewereafewcomplaintsduringsomeoftheothermonths,butalmost noneinJanuaryandFebruary. Inaddi>ontoitsmanufacturingplantinDetroit,NutsnBoltshasfourmajordistribu>oncentersinAtlanta,Phoenix,Denver,and Houston, where shipments from Detroit are stored in warehouses. There seems to be a strong geographical pa]ern to the complaintswithrespecttowhereshipmentsoriginated.Amajorityofthecomplaintscamefromshipmentsfromtheregionsin HoustonandAtlanta.VirtuallynocomplaintscamefromthecentersatDenverandPhoenix.Samplingindicatesthatnotevery partfromanygivenshipmentiscorroded;onlysomeoftheparts,someofthe>me,fromcertaingeographicalloca>ons.Also, duetoexcellentqualitycontrol,virtuallynoproductleavestheplantwithanysignsofcorrosion. Thepartsarepackagedincardboardboxes,withcardboardplacedinbetweenlayersofboltstoactasashockabsorber.Afew yearsagopaperwassuppliedexclusivelybyWolverinePaper,whoseplantislocatednearLakeSuperiorinMichigan.Thenewly appointed manager in the NutsnBolts packaging department noted that Wolverine Paper was overcharging for their product anddecidedtolookintoothersuppliers. Thebestpriceoeredbyfar(almost20%cheaperthanthenextlowestbid)wasfromAcadiaPaper,locatedinMaine.Research intohowAcadiawasabletoprovidesuchalowbidyieldedthefollowinginforma>on.Theplantwasintendedtoproducehigh gradepaper,butthewaterintakeforthemillislocatedina>dalbasin,allowingseawatertoentertheprocessingwatersupply. Becauseofthis,onlylowgradepapercanbeproducedattheplant.Inordertogetridoftheirexcesslowgradepaper,Acadia beganoeringpackagingpaperwellbelowthemarketprice. The manager also set up a contract with Badger Paper, whose plant is located near Lake Michigan in Wisconsin. Badger had recentlybeennedbytheEnvironmentalProtec>onAgencyfordumpingexcessivewasteinLakeMichigan.Asaresult,several changesinBadgersproduc>onweremadetostaywithintheEPAswastelimits.Thisresultedinadecreaseintheoverallpaper quality.Inaddi>ontothesetwosuppliers,NutsnBoltss>llpurchasedsomeofitspaperfromWolverinePaperCo.Currentprices oeredbythepapercompaniesdeterminewhichcompanyspaperendsupaspackagingmaterialforanybatchofproduct. AconfoundingfactoristhatNutsnBoltshasno>cedthatthequalityofthesteeltomakeboltsprovidedbyHeavyMetalhas decreasedsubstan>allyagerseveralkeypersonnelre>red.OnoneoccasionHeavyMetaltriedtosupplymaterialsthatarrived exhibi>ng excessive amounts of corrosion. The president of NutsnBolts had the shipment sent back to Heavy Metal and threatenedtopulltheaccount.Agerthis,thereweretwoothersimilarincidentsofcorrodedHeavyMetalmaterialsreported.

Oh,Nuts!!!*

#4.Nuts&BoltsKTProblemAnalysis
Devia>on:Whatcausesthecorrosionintheproduct
Is WHAT WHERE Corrodedproduct Isnot Noncorroded product DenverandPhoenix WolverinePlant dis8nc8on Corrosion Salt cause

InAtlantaand Houston BadgerorAcadia Plant Summer Agernewpaper companiesadded Someoftheproduct Allboltsinshipment

Typeofclimate SaltinAcadia Nosaltinbadgeror Wolverine Temperatureand humidity Dierentpaper companiesprocess Dierentpaperfor packaging Somethingcontac>ng surfaceofallbolts

Eectofhumidityon corrosion Tidalbasin contamina>on

WHEN

Winter Beforenewpaper companiesadded Alloftheproduct Allboltsinboxes

Moistpaper Saltinpaper Dierentpaper companies Packagingmaterial

EXTEND

Possiblecausefor test

Saltinpaperismovingontopartsthroughwaterfromhumidair

Ragin Cajun Chicken*


Wes Thompson is a manager of a Burgermeister restaurant, which specializes in fast food hamburgers. He has just been notified by the corporation that a new chicken sandwich, called Ragin Cajun Chicken, will be introduced into Burgermeister restaurants in two weeks. This surprised Wes because he has never heard anything about the new sandwich from the company or from advertisements. The memo says that plans for a national advertising campaign have unfortunately been delayed until after the introduction of the sandwich. The memo also says that next week, Wes s restaurant will receive a shipment of 500 Ragin Cajun Chickens. These are shipped frozen and have a shelf life of three months in the freezer. The notification also stresses the importance of proper handling of the uncooked chicken. In order to prevent cross-contamination by salmonella, the bacteria present in some raw chicken, specially marked tongs will be used to handle only uncooked chicken. With the shipment of the chicken, Wes s restaurant will receive a new broiler to be used exclusively for the new sandwich. It is important that the broiler operate at least at 380F to ensure that the chicken will be fully cooked in the five-minute preparation time. Wes thought that it was very important that the transition run smoothly when Ragin Cajun Chicken would be added to the menu in two weeks. To prevent any problems, he noted concerns in four areas and constructed the following PPA table.

#5.Rajunchicken Poten>alProblemAnalysis
Poten8alProblem Consequence Peopledontbuy sandwich Restaurantlosses money Possiblecause Customersdontknow aboutsandwich Tooexpensive Foodtoospicy Employeesdonthandle rawchickenproperly Improperuseofbroiler Chickenstoredtoolong Freezernotcoldenough Preven8veac8on Makeownsignsfor sandwich Compareunitcost withcompe>>on Informcustomersof mildvariety Trainemployees Trainemployees Setupda>ngsystem Performtemperature checks Havecashiersdouble checkaccuracy Markdiscard>meson sandwich Alwayshavechicken precooked Con8gentac8on Havecashierssuggest chickentocustomers Runpromo>onal specials Runpromo>onal specials Performperiodic inspec>ons Performperiodic inspec>ons Inspectanddiscard chickenifnecessary Inspectanddiscard chickenifnecessary Providefreeremade sandwichesforaected customers Inspectsandwiches beforeserving Havesandwich premade

Bacteriainfood

Illness,lawsuits

Substandard sandwichquality

Customerscomplain, Wrongitemson noreturnbusiness sandwich Sandwichsitstoolong underheatlamps Customerscomplain, Sandwichprepara>on noreturnbusiness takestoolong

Substandardand servicequality

#6.SMARTCaseofTransporta>on
A Bri>sh company has won an important contract to supply components regularly to Poland. Four methods of transport are being considered: (i) air, (ii) sea, (iii) road and ferry, and (iv) rail and ferry. The companys distribu>on manager has iden>ed four relevanta]ributesforthedecision: punctuality, safetyofcargo, convenience,andcosts. She has also allocated weights of 30 to punctuality, 60 to safety of cargo, and 10 to convenience. The manager then rated the performance of each form of transport on the dierent a]ributes.Thevaluessheassignedareshownbelowtogetherwiththees>matedannual costofusingeachformoftransport.

a. Determinetheformoftransportwhichhasthehighestvaluedoverallbenets, assumingthatmutualpreferenceindependenceexistsbetweenthea]ributes. b. Foreachformoftransport,plotthevalueofoverallbenetsagainstcostsandhence iden>fytheformsoftransportwhichlieontheecientfron>er. c. Ifthemanagerwouldbepreparedtopay$70,000peryeartomovefromtheleast safe to the most safe form of transport (all else remaining equal), determine which alterna>vesheshouldselect.

Stage1 &2

DecisionMaker Alterna>vecourses

ManagerfromBri8shcompany Air Sea Road&ferry Rail&ferry SubParameter Punctuality Safety Convenience Benet

Stage3

Parameter Benet

Stage4

Formof transport Air Sea Road&ferry Rail&ferry

Punctuality 100 0 60 70

Safety 70 60 0 100

Costs($) Convenience 60 150,000 80 100 0 90,000 40,000 70,000

Stage5
Akribute Punctuality Safety Convenience TOTAL Weigh8ng 30% 60% 10% 100%

ValueTree
Costs Benets

Stage6
Akribute Punctuality Safety Convenience Weigh8ng 30% 60% 10% Air

Punctuality Sea 0 60 80 44

Safety

Convenience

Road& ferry 60 0 100 28

Rail&ferry 70 100 0 81

100 70 60 78

Aggregatebenet

Stage7
Transporta8on model A B C D Air Sea Rail&Ferry Road&Ferry Totalcost($) 150,000 90,000 70,000 40,000 Aggregate benet 78 44 81 28

A,C,D:Ecientfron>er

A $150.000 78 $70.000

D 81

$40.000 C 28 $70.000 D 81

($150.000$40.000)=$2,200 (7828)

($70.000$40.000)=$567 (8128)

($150.000$70.000)=$26,667 (8178)

Decisionmaker`sextravalue:$70,000/60=$1,166.67 DecisionmakercompareC&D *ifextravaluepoint<$567C(Rail&Road) *ifextravaluepoint$567D(Rail&) DecisionmakercompareC&A *ifextravaluepoint<$2,200C(Rail&Road) *ifextravaluepoint$2,200A(Air) DecisionmakercompareA&D *ifextravaluepoint<$26,667D(Rail&ferry) *ifextravaluepoint$26,667A(Air)

Sensi>vityAnalysis

WeightplacedonPunctuality

100 90 Valueofbenet 80 70 60 50 40 30 20

0 0 0 0 0 0 0 0 0

1000 900 700 600 500 400 300 200 Valueofbenet 800

10 0 1500 0 30 34,78 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 10 1500 0 0 0 0 10 20 30 40 50 60 70 80 90 100 weightplacedon punctuality

WeightplacedonPunctuality
100 90 Valueofbenet 80 70 60 50 40 30 20 0 0 0 0 0 0 0 0 0 1000 900 700 600 500 400 300 200 Valueofbenet 800

10 0 1500 0 30 34,78 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 10 1500 0 0 0 0 10 20 30 40 50 60 70 80 90 100

Aslongweightofpunctuality<34,78thenRailandFerryisthemosta]rac>ve Whenweightofpunctuality>34,78thenAiristhemosta]rac>ve

Sensi>vityAnalysis

WeightplacedonSafety

100 90 Valueofbenet 80 70 60 50 40 30 20

0 0 0 0 0 0 0 0 0

1000 900 700 600 500 400 300 200 Valueofbenet 800

55,88 60 10 0 1500 1500 1500 0 1500 1500 1500 1500 1500 1500 1500 1500 10 1500 0 0 0 0 10 20 30 40 50 60 70 80 90 100 weightplacedonsafety

WeightplacedonSafety
100 90 Valueofbenet 80 70 60 50 40 30 20 0 0 0 0 0 0 0 0 0 1000 900 700 600 500 400 300 200 Valueofbenet 800

55,88 60 10 0 1500 1500 1500 0 1500 1500 1500 1500 1500 1500 1500 1500 10 1500 0 0 0 0 10 20 30 40 50 60 70 80 90 100 weightplacedonsafety Aslongweightofsafety<55,88thenAiristhemosta]rac>ve Whenweightofsafety>55,88thenRailandFerryisthemosta]rac>ve

Sensi>vityAnalysis

WeightplacedonConvenience

100 90 Valueofbenet 80 70 60 50 40 30 20

0 0 0 0 0 0 0 0 0

1000 900 700 600 500 400 300 200 Valueofbenet 800

10 0 1500 1500 1500 1500 1500 1500 1500 1500 1500 10 0 1500 1500 1500 60 10 14,28 0 0 0 0 10 20 30 40 50 60 70 80 90 100 weightplacedon convenience

WeightplacedonConvenience
100 90 Valueofbenet 80 70 60 50 40 30 20 0 0 0 0 0 0 0 0 0 1000 900 700 600 500 400 300 200 Valueofbenet 800

10 0 1500 1500 1500 1500 1500 1500 1500 1500 1500 10 0 1500 1500 1500 60 10 14,28 0 0 0 0 10 20 30 40 50 60 70 80 90 100 weightplacedon convenience

Aslongweightofconvenience<14,28thenRailandFerryisthemosta]rac>ve Ifweightofconvenience(x)=14,28<x<60thenAiristhemosta]rac>ve Whenweightofconvenience>60thenRoadandFerryisthemosta]rac>ve

Answers
1. 2. 3. Rail&ferryhasthehighestvalueforaggregatebenetsi.e.81 Rail&ferry(C)andRoad&ferry(D)lieoftheecientfron>er Thedecision: Themanagerispreparedtopay$1167foreachextrabenetpoint($70000/60).

Aswitchfromroad/ferrytorail/ferrywouldcost$567foreachextrabenetpoint ($30,000/53)andisthereforeworthmaking.Thereforechooserail/ferry. Themanagerispreparedtopay$1167foreachextrabenetpoint($70000/60). Aswitchfromrail/roadtoAirwouldcost$2,200foreachextrabenetpoint($110,000/50) andisthereforeworthmaking.Thereforechooserail/road. Themanagerispreparedtopay$1167foreachextrabenetpoint($70000/60). Aswitchfromrail/ferrytoAirwouldcost$26,667foreachextrabenetpoint($80,000/3) andisthereforeworthmaking.Thereforechooserail/ferry.

#7.DecisionTreeCaseofTelemore
Management of the Telemore Company is considering developing and marketing a new product. It is estimated to be 66.67% that the product would be successful. If it were successful, the expected profit would be $1,500,000. If unsuccessful, the expected loss would be $1,800,000. A marketing survey can be conducted as a cost of $100,000 to predict whether the product would be successful. Past experience with such surveys indicates if the survey shows favorable result, the product will be successful 80 percent of time. If the survey shows unfavorable result, the product will be unsuccessful 70 percent of time. The probability that the marketing survey show a favorable result is 50%. Develop a decision tree for the problem. Which is the best solution?

STEP1GeneratingDecisionTree
Decisiontogowiththe MAXPROFIT ExpectedValue(EV) ExpectedValue(EV) MAX ExpectedValue(EV) 80% Sucessful ProductDevelopment
$0 $1,500,000

Payoff P(Suc|Fav) $1,400,000


$1,400,000

$740,000 Unsuccessful

20% P(Unsuc|Fav) $1,900,000


$1,900,000

50% Favorable P(Fav) 1


$0

$1,800,000

$740,000 NoProductDevelopment $100,000


$0

$100,000 30%

Survey
$100,000

$320,000 ProductDevelopment
$0

Sucessful
$1,500,000

P(Suc|Unfav) $1,400,000
$1,400,000

$910,000 Unsuccessful

70% P(Unsuc|Unfav) $1,900,000


$1,900,000

50% Unfavorable P(Unfav) 2


$0

$1,800,000

$100,000 NoProductDevelopment $100,000


$0

2 $400,110 PleaseChoose WithoutSurvey

$100,000

66.67% Sucessful $1,500,000 ProductDevelopment


$0 $400,110 $1,500,000

$1,500,000

33.33% Unsuccessful $1,800,000


$1,800,000

WithoutSurvey 1
$0

$1,800,000

$400,110 NoProductDevelopment $0
$0 $0

Alterna8ve1(WITHSURVEY) Successful Unsuccessful Probability 0.6667 0.3333 Amount 1,500,000 (1,800,000)

P(favorable) P(unfavorable) P(successful) P(unsuccessful) P(SuccessfulIfavorable) P(UnsuccessfulIfavorable) P(successfulIunfavorable) P(unsuccessfulIunfavorable)

=0.5 =0.5 =0.6667 =0.333 =0.8 =0.2 =0.3 =0.7

NO SURVEY NEEDED
0.6667 0.3333 1

Alterna8ve2(WITHOUTSURVEY)Probability conductedshowfavorable0.8 Successful Unsuccessful TOTAL Favorable 0.4 0.1 0.5 Unfavorable 0.15 0.35 0.5

#8.DecisionTreeCase
Alargemachineinafactoryhasbrokendownandthecompanythatownsthefactorywillincurcostsof $3200foreachdaythemachineisoutofac>on.Thefactorysengineerhasthreeimmediateop>ons: Op3on1:Hecanreturnthemachinetothesupplierwhohasagreedtocollect,repairandreturnit freeofcharge,butnottocompensatethecompanyforanylossestheymightincurwhiletherepair isbeingcarriedout.Thesupplierwillnotagreetorepairthemachineifanyotherpersonhas previouslya]emptedtorepairit.Ifthemachineisreturned,thesupplierwillguaranteetoreturnit inworkingorderin10days>me. Op3on2:Hecancallinaspecialistlocalengineeringcompany.Theywillcharge$20000tocarry outtherepairandtheyes>matethatthereisa30%chancethattheywillbeabletoreturnthe machinetoworkingorderin2days.Thereis,however,a70%chancethatrepairswilltake4days. Op3on3:Hecana]empttocarryouttherepairworkhimself,andhees>matesthatthereisa50% chancethathecouldmendthemachinein5days.However,ifattheendof5daysthea]empted repairhasnotbeensuccessfulhewillhavetodecidewhethertocallinthelocalengineering companyortomakeaseconda]emptatrepairbyinves>ga>ngadierentpartofthemechanism. Thiswouldtake2furtherdays,andhees>matesthatthereisa25%chancethatthissecond a]emptwouldbesuccessful.Ifhefailsattheseconda]empt,hewillhavenoalterna>veother thantocallinthelocalengineeringcompany.Itcanbeassumedthattheprobabilitydistribu>on forthelocalengineeringcompanysrepair>mewillbeunaectedbyanyworkwhichthefactory engineerhascarriedout. Assumingthattheengineersobjec>veistominimizeexpectedcosts,whatcourse(s)ofac>onshouldhe take?

SELF REPAIR $30780

#9.DecisionTreeCase
Westward Magazine Publishers are thinking of launching a new fashion magazine for women in the under25agegroup.TheiroriginalplansweretolaunchinAprilofnextyear,butinforma>onhasbeen receivedthatarivalpublisherisplanningasimilarmagazine.Westwardnowhavetodecidewhether tobringtheirlaunchforwardtoJanuaryofnextyear,thoughthiswouldcostanaddi>onal$500000.If thelaunchisbroughtforwarditises>matedthatthechancesoflaunchingbeforetherivalareabout 80%. However, if the launch is not brought forward it is thought that there is only a 30% chance of launchingbeforetherival. For simplicity, the management of Westward have assumed that the circula>on of the magazine throughout its life will be either high or low. If Westward launch before the rival, it is thought that there is a 75% chance of a high circula>on. However, if the rival launches rst, this probability is es>mated to be only 50%. If the rival does launch rst then Westward could try to boost sales by increasingtheirlevelofadver>sing.Thiswouldcostanextra$200000,butitisthoughtthatitwould increasetheprobabilityofahighcircula>onto70%.Thisincreasedadver>singexpenditurewouldnot be considered if Westwards magazine was launched rst. Westwards accountants have es>mated thatahighcircula>onwouldgenerateagrossprotoverthemagazineslife>meof$4million.Alow circula>onwouldbringagrossprotofabout$1million.Itisimportanttonote,however,thatthese grossprotsdonottakeintoaccountaddi3onalexpenditurecausedbybringing thelaunchforwardor byincreasedadver>sing. Draw a decision tree to represent Westwards problem and determine the policy that they should choose.

Launchin APRIL $3,000,5000