BUSN11079 Analytical Thinking And Decision Making

Q1 Apply Decision Analysis and Develop an Appropriate Decision Tree

Q2 Calculating the expected values and following the rollback method, outline the most suitable approach for iResearch. Discuss your recommendations for the managers of iResearch

Software B and D are directly eliminated from the evaluation due to them carrying a high failure rate thus ACME systems should not consider these two options. This leaves AMCE systems with two options namely Software A and C which are viable and require closer research to determine the most cost-effective and the one which will deliver the best return on investment.

Software A – offers a 100% success rate meaning ACME systems can be sure the software will function correctly without any glitches on both computers and mobile device. Both platforms play an important role in business operations thus having a high success rate is critical towards the registering a high rate of return on the investment.

Software C = offers a 75% success rate and investment of $112,000 but carried a risk of 25%. This translates to a direct risk of losing 25% efficiency. When the cost of the software is calculated from a 100% success rate perspective the software is likely to cost $149,333.3333 which is higher than Software A. it is also likely that ACME Systems will need to address the efficiency and success rate at a later stage which is likely to cost additional fund to resolve the bugs which are likely to cost the business additional financed and losses in efficiency in operations and profits.

Normative or Prescriptive Decision Theory

To assist with making the most informed decision related to the business it is important to utilize the Normative or prescriptive decision theory which allows for all elopements related to the products being compared based on their immediate and long term delivery outcomes. This information’s is then used to determine the best choice to select so as to maximize output and financial gain from the evolution of different available options.

Advice on Selecting the Best Software

After analysis of the above statistics, it is advisable for AMCE Systems to consider investing on Software A which offers a 1005 success rate, this ensures the software will operate successfully on all platforms and gadgets which will help increase efficiency (Kallet, 2014). It is also likely to cost the business less investment over the long term perspective due to the business one-time investment on the software system

References:

Kallet, M., 2014. Think Smarter: Critical Thinking to Improve Problem-Solving and Decision-Making Skills. New Jesrey: John Wiley & Sons.