Activity $4$:

Decision Tree Analysis

$\backslash$table$[[$Alternatives $($Choices$),$Vendor,Probability,Days $($value$)],[,$Vendor $1,0\mathrm{.}6,60],[$Green$,$Vendor $2,0\mathrm{.}4,50],[,$Vendor $1,0\mathrm{.}6,50],[$Yellow$,$Vendor $2,0\mathrm{.}4,55],[,$Vendor $1,0\mathrm{.}6,55],[$Red$,$Vendor $2,0\mathrm{.}4,55],[,,,]]$

Scenario

Consider a company that competes on time$-$to$-$market capabilities. As they are entering the design phase for its new product development project, their goal is to finish it as soon as possible and hit the market before their competitors. While literally each project day is considered to be of extreme priority, the development cost is given lower importance. In such a situation, the project team is attempting to decide on the appropriate design approach to use for this product. A major uncertainty involves the amount of time it will take to design the central module in the product. Three major alternatives are being considered, each one identified with a single word:

Green $($G$).$ Incorporate the routing rules early in the central module design.

Yellow $($Y$).$ Predict the routing rules early and modify them at the end of the central module design.

Red $(R).$ Incorporate the routing rules at the end of the central module design.

A second uncertainty is related to an off$-$the$-$shelf part that goes into the central module, whichever the alternative. Two different vendors produce the part. It is well known that both companies are in a race to release the newest upgrade of the part, and they have announced the same release date. To represent this decision description and enable its analysis, the team must first structure the model.

Draw decision tree, calculate expected value & determine best decision path

Martinelli, R$.$ J$.,$ & Milosevic, D$.$ Z$.(2016)$