Final IBDM assignment summative

Topics: Decision making, Decision theory, Decision making software Pages: 16 (2429 words) Published: April 23, 2015
Durham University
Durham University Business School
Introduction to Business Decision Making

Summative Assignment - Term 2

Done by student of Group1
Danil Shabalin
Reviewed by
Dr Nigel van Zwanenberg

Stockton on Tees, 2014
Contents

Introduction4
SMART Analysis5
Step 1: Identify the Decision Maker5
Step 2: Identify the Alternative Courses of Action5
Step 3: Identify the attributes which are relevant to the decision problem5 Explaining the Value Tree6
Judgement of the Value Tree6
Step 4: Assigning Values to Attributes7
Step 5: Determine a weight for each attribute8
Step 6: Summarize Performance of Each Alternative9
Step 7: Make a Provisional Decision11
Step 8: Sensitivity Analysis12
Final Evaluation14
Bibliography15

Introduction

For this assignment I chose Pennysmore Lighting and my task is to carry out SMART and sensitivity analysis in order to choose accommodation. My sources of information were not only lectures and core text book but also research from “relevant” people and journals and books. The “Relevant” people include me because I’m now in stage of searching accommodation for next academic year Also I had conversations with a couple of real estate agents here in Stokton . In addition my parents from small city and they have knowledge about choosing right accommodation. But before I proceed I need to state that SMART does not overview the whole complexity of decision but in this case we don’t need that because the main goal is to find key aspects and relation between each other in order to conduct provisional decision.

In Tables and Analysis I’m going to use next contractions: Arkwright Fields = A
Bell Height = B
Crompton Road = C
Dalton Wood = D
Edgeworth View = E

SMART Analysis

Step 1: Identify the Decision Maker

In our task the decision maker is me- assistant to the operations manager because we’re giving advice on what accommodation to choose for the general manager. Step 1-OP’s Assistant

Step 2: Identify the Alternative Courses of Action

For our case these are the different apartment we can choose to advice. Step 2-Different apartments

Step 3: Identify the attributes which are relevant to the decision problem In this step we need to determine the attributes that relevant for decision-maker’s problem. As I making decision which will affect other person I need put myself in his position in order to find relevant attributes and I now my parent’s knowledge come in hand as they used to have business trips while working as general managers in company and they faced same problem -where to stay during this trips. According to their information I have drawn the “The Value Tree for Apartments Problem”: Explaining the Value Tree

According to real estate agents one of main attributes in choosing apartment is cost and we know that general manager (further in text- GM) is going to stay where at least for half of year so GM need to know how to manage his monthly budget because of cost of rent and if rent includes/excludes variable costs (water, electricity, etc.). Another main attribute that was pointed out by my parents is benefits of apartment which we need to break down to more specific attributes which decision maker will consider: Location and Living Condition. But both of them need more specification: let’s start with Location. Most of the time if you’re GM of the company you(even small) either have a car or have somebody to drive you to work so distance to work is important and in addition GM going to Pennysmore to work on new set up so he need to be close to supervise closely. If we use Maslow’s hierarchy of needs (Cronburg, 2010) we going to find out that safety as second most basic need so it’s more likely to find secure place for GM by checking out nearby population so he wouldn’t be troubled during his stay in accommodation because it’s...

Bibliography: Cronburg, T., 2010. Maslow 2.0 human hierarchy of needs.
Goodwin, P. W. G., 2010. Decision Analysis for Management Judgment. В: Cornwall: Wiley, p. 47.
Goodwin, P. & Wright, G., 2010. Decision Analysis for Management Judgement. В: Cornwall: Wiley, pp. 50-51.
Raiffa, K. R., 1976. Decisions with Multiple Objectives:Preferences and Value Tradeoffs. New York: Wiley.
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