Decision Dilemma at Arvind Textiles
Prerequisite Conceptual Understanding
- • Jay Heizer, et al., “Quantitative Module A: Decision-Making Tools”, Operations Management, 9th Edition, Pearson Education, 2008
Synopsis
This caselet is meant for learners pursuing course in Operations Management. This caselet enables an understanding of the application of Decision Tree Analysis. The caselet provides a brief about the dilemma of purchase for Anup Joshi (Anup), the founder of Arvind Textiles. Arvind Textiles was established by Anup, a textile engineer in mid-2014. The company manufactured T-shirts, which involved various stages like dyeing, cutting, design printing, stitching, checking of quality, ironing and finally packing. The process takes a stipulated amount of time at each stage. However, being a startup the process of the company was not automated and considerable amount of workforce was involved. Anup was considering to buy a textile store to improve the company’s processes to be effective and efficient, nevertheless as the company was in a nascent stage he was in a dilemma to take the plunge or wait for better developments The caselet enables a discussion on the dilemma of opting for the purchase or to continue with the present stance.
Expected Learning Outcomes
- • The basics and application of Decision Tree Analysis
- • The concept of Expected Monetary Values (EMVs)
Preconceptual Understanding and Before the Classroom Discussion
The participants were asked to read the following chapter given as mandatory reading at the end of the caselet to participate effectively and to enrich the learning outcomes:
- • Jay Heizer, et al., “Quantitative Module A: Decision-Making Tools”, Operations Management, 9th Edition, Pearson Education, 2008
- • Richard I. Levin and David S. Rubin, “Chapter: Decision Tree Analysis”, Statistics for Management, 7th Edition, Pearson Education, 2008
Case Positioning and Setting
This caselet can be used in MBA/Executive MBA program for Operations Management course to illustrate the concept of ‘Decision Tree Analysis’ and exemplify its implications.
Assignment Questions
- I. Taking the time value of money into account, find the NPV of the project with a discount rate of 10%.
- II. Determine the best decision using each of the decision criteria: Maximax, Maximin, Minimax regret, Hurwicz and Equal likelihood.
Suggested Orchestration
The classroom discussion and analysis for this caselet could be summarized and facilitated under two broad sections [Exhibit (TN)-I].......