Decision analysis assignment

Wordcount:

2000

words
Madrid FC own land in the metropolitan area of Madrid. They would like to build a sports complex which would include state-of the art training facilities for elite athletes. Your consultancy office with the help of architects and sports consultant have drawn up three different projects) (i) 10 hectare site with small capacity for athletes (ii) 20 Ha site and moderate level of capacity; (iii) a high-level complex at 30 Ha.
The success of the project depends upon several factors. Madrid FC want to build make the largest profit. There is uncertainty concerning the demand for the three projects. The decision is to select the optimum project depends on following three decision alternatives:

Decision

1: a small sports complex at 10 Ha Decision 2: a medium complex at 20 Ha Decision 3: a large complex at 30 Ha
Some other information investigated:
Decision 1 would be in the centre of town where property and land are expensive but would have some kudos as it is close to the football ground.

Decision 2 is close to the centre but transport would be needed to get to it. Decision 3 is out of town with lots of opportunity for expansion.

A study was conducted to get some prior knowledge for the probability of each alternative occurring at 2 different demand level. The two directions investigated were high demand and low demand and based on various financial metrics and a probability assigned to these variables (see table 1 below).

Thus, management must first select a decision alternative (complex size), then other states of nature will be investigated e.g. (demand for the sports facility). Given the three decision alternatives and the two states of nature, which sports complex should Madrid FC advance?
To answer this question, Madrid FC will need to know the consequence associated with each decision alternative and each state of nature.

Table 1: Payoff for Madrid FC Sports Complex (payoff in Euros million)

Low Demand

High Demand

Size

Decision

S1 (p=0.4)

S2 (p=0.6)

Small

D1

3000

3200

Medium

D2

2500

2800

Large

D3
2000

2

100

Table 2: A survey was completed with 100 people that showed strong interest in signing up to train at the complex. A contingency table of the data is shown below

Trains more than 3 times a week

Trains less than 3 times a month

TOTAL

Football fan

20
40
60

Non-football fan

20
20
40
TOTAL
40
60
100

Questions:

1. 1)  Based on the information in the case, what are Madrid FCs key drivers and objectives in this decision- making process?
2. 2)  Are there any other objectives that you think they should consider?
3. 3)  Identify the basic elements governing Madrid FCs decision-making (values, decisions, uncertain events, consequences, etc) ?
4. 4)  Develop a decision tree for this decision-making process.
5. 5)  What roles do decision trees and influence diagrams play in helping to understand and communicate the structure of your decisions in this project?
6. 6)  Which decision would you recommend based on your investigations. Justify your recommendations?
7. 7)  Given the information in the contingency table, what is the significance of this data and which marketing solutions might be applicable for Madrid FC?
8. 8)  Develop arguments on how decision-making could be improved in a project of this nature?

BBA312 Decision Making Final Assignment Brief and Rubrics

Task

• This is an individual task

• Read and study the information below and answer the questions.

• There are 8 questions. Make sure the questions are clearly labelled.

• Document format (upload in pdf format)

Formalities:

• Wordcount: 2000 words

• Cover, Table of Contents, References and Appendix are excluded of the total wordcount.

• Font: Arial 12,5 pts.

• Text alignment: Justified.

• The in-text References and the Bibliography have to be in Harvard’s citation style.

The Project Information

Madrid FC own land in the metropolitan area of Madrid. They would like to build a sports complex which would include state-of the art training facilities for elite
athletes. Your consultancy office with the help of architects and sports consultant have drawn up three different projects) (i) 10 hectare site with small capacity
for athletes (ii) 20 Ha site and moderate level of capacity; (iii) a high-level complex at 30 Ha.

The success of the project depends upon several factors. Madrid FC want to build make the largest profit. There is uncertainty concerning the demand for the three
projects. The decision is to select the optimum project depends on following three decision alternatives:

Decision 1: a small sports complex at 10 Ha

Decision 2: a medium complex at 20 Ha

Decision 3: a large complex at 30 Ha

Some other information investigated:

Decision 1 would be in the centre of town where property and land are expensive but would have some kudos as it is close to the football ground.

United Snus Association2

United Snus Association2

United Snus Association2

Decision 2 is close to the centre but transport would be needed to get to it.

Decision 3 is out of town with lots of opportunity for expansion.

A study was conducted to get some prior knowledge for the probability of each alternative occurring at 2 different demand level. The two directions investigated were
high demand and low demand and based on various financial metrics and a probability assigned to these variables (see table 1 below).

Thus, management must first select a decision alternative (complex size), then other states of nature will be investigated e.g. (demand for the sports facility).

Given the three decision alternatives and the two states of nature, which sports complex should Madrid FC advance?

To answer this question, Madrid FC will need to know the consequence associated with each decision alternative and each state of nature.

Table 1: Payoff for Madrid FC Sports Complex (payoff in Euros million)

Low Demand High Demand

Size Decision S1 (p=0.4) S2 (p=0.6)
Small D1 3000 3200

Medium D2 2500 2800

Large D3 2000 2100

Table 2: A survey was completed with 100 people that showed strong interest in signing up to train at the complex. A contingency table of the data is shown below

Trains more than 3
times a week

Trains less than 3
times a month TOTAL

Football fan 20 40 60

Non-football
fan 20 20 40

TOTAL 40 60 100

Questions:

1) Based on the information in the case, what are Madrid FCs key drivers and objectives in this decision- making process?

2) Are there any other objectives that you think they should consider?

3) Identify the basic elements governing Madrid FCs decision-making (values, decisions, uncertain events, consequences, etc) ?
4) Develop a decision tree for this decision-making process.

5) What roles do decision trees and influence diagrams play in helping to understand and communicate the structure of your decisions in this project?

6) Which decision would you recommend based on your investigations. Justify your recommendations?

7) Given the information in the contingency table, what is the significance of this data and which marketing solutions might be applicable for Madrid FC?

8) Develop arguments on how decision-making could be improved in a project of this nature?

Submission: Week 12 – 8th January 2023, 23:59

Weight: This task is worth 60% of your total grade for this subject.

This assignment assesses the following learning outcomes:

• Outcome 1: to have an in-depth knowledge and understanding of effective decision-making processes within a business context marked by uncertainty

risk danger opportunity and growth.

• Outcome 2: Identify and apply interpretive and analytical methods for effective analysis and decision making

• Outcome 3: Apply the framework of effective decision-making within a business context and of risk management.

• Outcome 4: To critically appreciate the framework of problem analysis within the context of decision-making

United Snus Association2

Rubrics

Exceptional 90-100 Good 80-89 Fair 70-79 Marginal fail 60-69

Knowledge &
Understanding

(20%)

You demonstrate excellent
understanding of key
concepts around decision
making and risk
management and you use
vocabulary in an
appropriate and coherent
manner.

You demonstrate good
understanding of the task
and mentions relevant
concepts around decision
making and risk
management. You use and
demonstrates good use of
the relevant vocabulary.

You understand the task
and provides minimum
theory around decision
making and risk
management with some
use of relevant vocabulary.

You understand the task and
attempts to answer the
question, but you do not
mention key concepts around
decision making and risk
management and you use
minimum amount of relevant
vocabulary.

Application and
analytical thinking

(30%)

You apply to the
assignment fully relevant
knowledge from the topics
of decision making and risk
management and you
recognizes all the decision
analysis issues of the
company in question.

You apply mostly relevant
knowledge of decision-
making and risk-
management to the
assignment and identify
mostly relevant decision
analysis issues of the
organization.

You apply some relevant
knowledge from the topics
of decision-making and
risk-management to the
company. There are some
misunderstandings evident.
You somewhat recognize
the relevant decision
analysis issues of the
company.

You apply little relevant
knowledge from decision-
making and risk-management
the company.
Misunderstands are evident.
You do not recognize the key
decision analysis issues of the
firm and misinterpret or miss
some key pieces of
information.

Critical thinking
(30%)

You critically assess in
excellent ways the areas of
decision-making and risk-
management, drawing
outstanding conclusion
from your evaluations.

You critically assess in good
ways decision-making and
risk-management, drawing
conclusions with very few
missing pieces of
information.

You provide some insights
in terms of decision-making
and risk-management, but
information taken at face-
value and no depth in the
analysis. Some
misinterpretations and
several pieces of
information not addressed.
References may not be
relevant or missing.

You make little or no attempt
at critical thinking and
insights do not provide
appropriate information and
data from the company.
Several incoherencies.

Communication
(20%)

You communicate your
ideas extremely clearly and
concisely, respecting word
count, grammar and
spellcheck. You use
references (Harvard)

You communicate your
ideas clearly and concisely,
respecting word count,
grammar and spellcheck.
Some minor issues with
English and references but

You communicate your
ideas with some clarity and
concision. Some issues with
structure and/or
wordcount. Some
misspelling errors may be

You communicate your ideas
in a somewhat unclear and
unconcise way. You do not
reach or does exceed
wordcount excessively and
misspelling errors are

correctly. You visualize
data extremely well.

largely coherent.
Somewhat good at
applying visualisations to
your information.

evident and affect slightly
the reading. Poor
visualisation of data. Some
issues with references

evident. Harvard not used
correctly. Some issues with
structure and coherence. No
visualisations of data.