Decision-Making Dilemma at Sunshine Electronics
Prerequisite Conceptual Understanding
- • Richard I. Levin and David S. Rubin, “Chapter 17: Decision tree Analysis”, Statistics for Management, 7th Edition, Pearson Education, 2008
This caselet enables an understanding of the concept and application of Decision Tree Analysis. The caselet provides a brief about the dilemma on choosing the replating method, in a Chennai-based electronics parts manufacturing company. The caselet enables a discussion on the choices of the replating method based on the probability or likelihood of each method.
- • To understand the basics and application of Decision Tree Analysis
- • To understand and discuss the concept of Expected Monetary Values (EMVs)
- I. What should the company do? What is the (expected) cost per batch?
- II. If the test is conducted, how would the outcome of such a test influence the replating decision? How much should Sunshine be willing to pay, in order to conduct the test?
The Teaching Note follows a defined Teaching Plan [Annexure (TN)-I], which guides in conducting the classroom discussion..............