Instructions

• We have to form a decision tree for the Team Size (either 8 or 11 team members)
• Also, a 2x2 payoff matrix (8 + 11 team members, overworked + work/life balance)
• Compare the values generated by the decision tree to the payoff matrix and explain the similarities or differences. Describe the value the sensitivity analysis may provide to decision making. Reference at least 1 professional or academic source to support your understanding. Do not use blogs such as PM Study Circle

Referencing the Pineapple Wheels Case Study, the project had a 28-month timeline. At the project start, the team size is a key decision with the following options

Option A. Project is supported by 11 team members

o Team Cost = $200K

o 10% probability the team is overworked and misses the launch date. Pineapple wheels would pay a $100K penalty

o 90% probability the team achieves work/life balance and meets the launch date. Pineapple Wheels would pay a $5K bonus to each team member

Option B. Project is supported by 8 team members

o Team Cost = $150K

o 80% probability the team is overworked and misses the launch date. Pineapple wheels would then pay a $100K penalty

o 20% probability the team achieves work/life balance and meets the launch date. Pineapple Wheels would then pay a $5K bonus to each team member

Pineapple wheel case study

Pineapple Wheels Inc. ("Pineapple") was a Tier 1 automotive supplier located in Algoma, ON that was started by Melanie Daoust in her garage 30-years ago. Residing in the same town since 1990, Pineapple had gradually shifted from supplying utility carts and trailers to trucks and cars. The main customers had headquarters located in Detroit, but Pineapple shipped wheels throughout Canada, US, and Mexico using a sophisticated combination of rail (Algoma had a major railroad next to the facility) and long-distance haulers. The customer base was steady, but the projected annual domestic wheel sales show a decline of 4% starting in 2022 (domestics = plants in Canada, US, and Mexico). Upper management at Pineapple was led by the CEO, Murray Daoust, who was the eldest son. Murray had worked in the business since he finished school and felt a strong connection to the workforce and the local region. Understanding the projections, Murray had developed a sales strategy to expand into Asian vehicle manufacturers and after 4-years of hard work, Murray's first success was a new $28M project to supply tires to support the 2021 launch of the latest line of SUMO vehicles from the Tata Motor Company ("Tata"). A successful launch was the responsibility of the project manager, Tommy Gendron. Having significant automotive experience, Tommy made the move from Detroit to the quieter city of Algoma to find work/life balance and the business plan that Murray had laid out for him. Tommy understood from the Ford F150 launch had similar budget, but only required domestic transportation and used a wheel design that was previously tested (and released) for another program. In comparison, the Tata wheel was a new design but on a compressed release schedule with a timeline of 28-months for Tata SUMO (vs standard 48-months for Ford F150). However, the design was very similar to the F150 design and used standard material that the existing Pineapple machinery and assembly personnel were comfortable handling, but as a unionized shop led by Mario Tremblay, there were always discussions and tension when new changes were introduced.

As a new design, there was no test data. Terry Calhoun was the quality manager who had overseen the Ford F150 project and felt the similarities were inconsequential. The project timeline could be compressed by months if test data from the Ford F150 was deemed as an acceptable substitute by the customer. Tata had no experience with domestic wheel testing standards and would be relying on Pineapple's recommendations on what differences in specifications could be ignored. Tata had also made introductions for Pineapple to new suppliers that Tata had previously done business with. The purchaser for Pineapple was Wanda Daoust and one supplier was Amoli Rubber Inc. ("Amoli") from Jaipur, India. Wanda was the youngest child and eager to make an impression on Melanie. Her enthusiasm sometimes covered over a lack of preparation and this often was a source of conflict with Murray who preferred planning over trusting a "gut feeling". Amoli had made a verbal offer to Wanda that would reduce the raw material costs by 40% compared to the current Pineapple suppliers if "more business" beyond the Tata program was switched to Amoli. No hard figures were exchanged, but the potential savings were significant. As the PM, Tommy had independent discussions with the key stakeholders throughout and was aware of the status for each of the team member's areas of expertise. He had a meeting with Murray on Friday where the focus was on deciding whether to release the 1st round of funding to purchase materials and machinery. Tommy needed to use this meeting to provide an accurate project status and evaluation of the risks and opportunities so that Murray, as the project sponsor, can make the appropriate choices.