BUSN11079 Analytical Thinking and Decision-Making Assignment Sample

 

Introduction 

Analytical thinking and decision-making are important in order to solve problems in order to meet certain objectives and are essential in solving as well as analyzing the strengths and limitations of the analysis.

A simple Multi-Attribute Rating Technique (SMART) will be used in this particular analysis in order to find out solutions for the problem by analyzing all the aspects related to it. It may be asserted that a detailed critical analysis will be done in order to overcome the problem as early as possible.

Decision-making has undergone several changes and the introduction of Artificial Intelligence (AI) has made the entire process of decision-making rapid and accurate (Shrestha et al., 2019).http://BUSN11079 Analytical Thinking and Decision Making Analytical thinking is a process where several steps are taken into consideration in order to identify problems and issues.

Moreover, it may be opined that gathering relevant data and information is extremely crucial to solving the problem as soon as possible. On a contradictory note, it may be argued that after the identification of the problem, the problem is divided into several parts and gradually these small parts are solved with utmost care and precision.

This process converts a complex problem into several small problems which are easier to solve rather than solving the whole problem at once. Decision-making may be referred to as a system or approach to making effective scientific decisions by overcoming several complexities and uncertainties (Calabrese et al., 2018).http://BUSN11079 Analytical Thinking and Decision Making In today’s modern organization, every member is held responsible for making strong and effective decisions.

It may be asserted that everyone has their own analytical skills which help in solving a problem by thinking analytically. Analytical thinking is considered to be useful and it is widely used for solving problems as well as making perfect and appropriate decisions among a huge number of alternatives.

In this report, a detailed discussion will be done to solve the problems faced by organizations related to suppliers of raw materials and the SMART method will be used for resolving this particular problem.

1. Discussion on the importance of decision-making and application of decision analysis

In order to carry out a business successfully all companies have to focus on different areas of business and it may be mentioned that decision-making is one of them.

However, it may be implied that the management team of an organization has to make several decisions on a daily basis where simple as well as extremely challenging decisions are made. Decision-making has a direct relationship with managerial performance where meeting organizational objectives through the proper utilization of resources is treated with utmost importance (Kunigami et al., 2018).http://BUSN11079 Analytical Thinking and Decision Making

It may be stated that some of the decisions include, the ways to manage the workforce of the organization, to make decisions regarding the productivity of the employees, decisions related to choosing a particular supplier, and decisions related to the location of manufacturing and projection.

Additionally, it may be stated that all the available options and alternatives are analyzed in detail in order to overcome the problem with ease. Solving organizational disputes related to the problem of suppliers may hinder in achieving organizational goals.

In addition to this, it needs to be implied that previous decisions and the techniques used by the organization are to be considered before taking any serious steps in the future. The process of decision-making needs to be dealt with with utmost care and precision as it may lead an organization to success or downfall.

Additionally, it may be noted that, multi-criteria decision analysis is extremely impactful for sustainable development planning (Ezbakhe and Foguet, 2021).http://BUSN11079 Analytical Thinking and Decision Making  Several important aspects of decision making have been discussed below:-

  1. It may be asserted that decision-making is one of the most efficient and trusted ways to use the available resources in a proper way
  2. Decision-making also benefits an organization in maintaining constant growth in the market
  3. Decision-making aids in identifying the problems as well as pointing out various opportunities
  4. It helps in increasing the levels of motivation of the employees and also aids in innovation
  5. Decision-making assists in choosing the right alternative among several other options
  6. It is beneficial in making plans, and strategies, organizing the employees and providing direction to an organization
  7. All the employees take an active part in decision-making process and it impacts the management to a great extent
  8. Decision-making helps in a promotion where managers are evaluated according to their capability to take a decision successfully
  9. It benefits an organization in designing strategies and policies which affects an organization
  10. Decision-making aids in achieving long-term as well as short-term goals

Decision analysis refers to the process of making an appropriate decision when circumstances seem to be uncertain and unpredictable. On the other hand, it may be mentioned that decision analysis often provides a particular strategy to manage cost by choosing the best alternative available.

However, it may be asserted that effectiveness, as well as cost benefit, comes under the ambit of decision analysis. Decision analysis primarily benefits a company by simplifying the complex and uncertain issues which affect the decision making process (Marttunen et al., 2017). http://BUSN11079 Analytical Thinking and Decision MakingDecision analysis help in avoiding conflicts arising due to various actions taken and in the field of business it is mostly used in order to analyze different types of options related to investment.

Decision analysis also provides an advantage to an organization in analyzing technical choices, selecting a particular project, planning the finance of a company and in analysing strategic choices.

BUSN11079 Analytical Thinking and Decision Making

Figure 1: A Decision Tree

(Source: Marttunen et al., 2017)

Decision tree method is used widely in order to analyze a decision properly where the tree begins with issues and challenges which offer two alternate options as solution. Finally, it may be concluded that decision analysis is extremely important as it helps in making a decision after a detailed analysis by taking into consideration all the possible consequences that may arise in the future.

It may be opined that decision trees are extremely simple which helps to understand and analyse the interpretation in an effective way as well as the framework is also suitable for multi output problems (Gupta et al., 2017).http://BUSN11079 Analytical Thinking and Decision Making Assignment Sample

2. Identifying and outlining decision problems related to raw materials

It may be mentioned that every company or enterprise faces several issues and difficulties while carrying out all the business activities on a daily basis where major as well as minor issues become a threat.

An organization may use decision analysis along with analytical thinking in order to overcome challenges and issues. It may be mentioned that selecting the most appropriate supplier is one of the most challenging aspects in today’s modern business environment which directly impacts gaining a competitive advantage.

Purchasing raw materials from different suppliers at different rates directly affects an organization (Cunha et al., 2018). http://BUSN11079 Analytical Thinking and Decision Making Assignment SampleThe selection of raw material suppliers is based on the following objectives:-

  1. Suppliers are selected who provide faster delivery
  2. A strong relationship is maintained with raw material suppliers which often helps in gaining a competitive advantage
  3. A deal is made with any raw material supplier if the supplier meets the quality benchmarks
  4. Raw material suppliers are chosen who may meet the packaging requirements of the organization

3. Application of Simple Multi-Attribute Rating Technique (SMART) decision

The Simple Multi-Attribute Rating Technique (SMART) is a systemic framework that is used to analyze complex decision-making situations even though it has been observed that it uses the linear additive to model to find the values of each option.

On the contrary, it may be discovered that SMART techniques are a common framework that is used in multiple criteria decision making although it is a linear function and one of the simplest and easiest ways to choose the weighted value (Patel et al., 2017).http://BUSN11079 Analytical Thinking and Decision Making Assignment Sample

In the above discussion, it may be mentioned that an organization may face decision problems in selecting raw material suppliers although the SMART analysis is used to evaluate the decision problems.

Stage 1 Identification of the decision maker

The operation manager of an organization plays an important role in selecting the raw material suppliers while it may be opined that an effective decision strategy is required to select an appropriate raw material supplier for an organization.

On the contrary, it may be implied the operation manager may take the devices from the employees of the organization which is extremely useful for selecting an appropriate raw material supplier.

Stage 2 Addressing the difficulties related to supplier selection

The decision-making management of an organization may implement effective decisions for selecting the raw material suppliers for an organization even though it has been mentioned that the organization may face many difficulties and issues with the selection of raw material suppliers.

The selection of the supplier needs to be done in a sophisticated way while the hybridization decision-making process may play a crucial role in selecting the proper supplier (Chai and Ngai, 2020). http://BUSN11079 Analytical Thinking and Decision Making Assignment SampleF/

urthermore, it may be asserted that a business organization needs to implement optimal decision-making strategies on the selection of raw material suppliers through a multi-objective optimization model which stimulates the productivity of the business of an organization (Sutrisno et al., 2018).http://BUSN11079 Analytical Thinking and Decision Making Assignment Sample In addition to that, the selection of the right raw material suppliers for the company may create a beneficial impact on the organizational growth of the company while it increases the competitive advantage of the organization.

Additionally, the quality of the products of an organization depends on the quality of raw materials so that it is extremely important for the management of an organization to select the right raw material suppliers.

In addition to that, the use of triple bottom line is extremely essential to select the appropriate supplier in a sustainable way (Rashidi et al., 2020).http://BUSN11079 Analytical Thinking and Decision Making Assignment Sample

Stage 3 Identification of substitutes

It may be opened that the management of the organization may attach the raw material suppliers with the plant which will be extremely impactful to managing the entire business process in an effective way.

On the other hand, it may be argued that the main aim of selecting the right raw material supplier also helps to mitigate the risks of the purchase of organization and it is extremely important to establish a healthy relationship between suppliers and buyers (Taherdoost and Brard, 2019).http://BUSN11079 Analytical Thinking and Decision Making Assignment Sample In addition to that the organization may also create a strategic alliance with the raw material suppliers or the company also outsources the raw materials from the outside of the country.

Stage 4 Identification of the criteria

It may be opined that there are several criteria that need to be focused on by the management of an organization before selecting a raw material supplier. On a contradictory note, it may be implied that some of the important criteria which are extremely important for selecting a raw material supplier are delivery, the pricing structure of raw materials, service, and quality.

Moreover, it may be derived that there are some sub-criteria of main criteria such as cost and timeliness are the sub-criteria of delivery, and facilities and R&D are the sub-criteria of service.

Along with that, it may be asserted that a decision tree is a systematic tool that is commonly used to select the best course of action while it uses a graphical presentation which is extremely useful to make an effective and appropriate decision (Batra and Agrawal, 2018).http://BUSN11079 Analytical Thinking and Decision Making Assignment Sample

BUSN11079 Analytical Thinking and Decision Making

Figure 2: Decision tree framework for supplier selection

(Source: Batra and Agrawal, 2018)

 

Stage 5 Identifying the value of each criterion

The ranking of suppliers X, Y, and Z has shown below:-

Suppliers Supplier X Supplier Y Supplier Z
Quality 2 1 3
Delivery 3 1 2
Price 2 3 1
Service 3 1 2

Table 1: Ranking of raw material suppliers

(Source: Self-created)

Stage 6 Evaluation of weights for each criterion

It may be implied that an approximate weighting framework is used to solve multiple attribute problems while the rank order centroid (ROC) method is the most commonly used weighted method which is used to make an effective and appropriate decision through imprecise parameters (Ahn, 2017). In this topic, to select the right supplier between Supplier X, Supplier and Supplier Z the decision makers use ROC weights rank, accordingly, rank 1= 0.6111, rank 2= 0.2778, rank 3= 0.1111.

Stage 7 Calculation of the weighted average through ROC

According to the weighted rank, the calculation table is produced to identify the right raw material suppliers for the organization.

Suppliers Supplier X Supplier Y Supplier Z
Quality 0.27080*0.52080=

0.14100

0.11110*0.52080= 0.05780 0.61110*0.52080= 0.31820
Delivery 0.11110*0.27080=

0.03000

0.2770*0.27080=

0.07520

0.61110*0.27080= 0.16540
Price 0.27780*0.14580=

0.04050

0.61110*0.14580=

0.08900

0.11110*0.14580= 0.01610
Service 0.11110*0.06250=

0.00690

0.27780*0.06250=

0.01730

0.61110*0.06250= 0.03810
Total 0.218400 0.23930 0.53780

Table 2: Weighted average for different raw material suppliers

(Source: Self-created)

Stage 8 Provisional decision of the organization

According to the above-mentioned calculation, it may be described that supplier Z is the right raw material supplier for the organization while it has been observed that the weighted average of supplier Z is higher than the other two suppliers.

Stage 9 performing sensitivity analysis

In this calculation sensitivity analysis technique is used which is focused on independent variables while it may be opined that the weight averages are the dependent variables, however, the weights of criteria and substituted suppliers are the independent variables.  Additionally, it may be implied that the entire weights of different suppliers are dependent on the weights of individual critters such as price stricture, quality, rankings, and many more.

4. Strengths and limitations of the analysis

It may be derived that there are many strengths and limitations in the context of the decision making which are mentioned are as follows:-

Strengths

It may be asserted that the analysis is extremely useful to make effective and fast decisions through simple and easy processes. In addition to that, the analysis uses the value of different criteria which is extremely helpful to choose a course of action. One of the biggest strengths of the analysis is it divides the difficult problems into simple steps which indicates that the analysis may be conducted in an easy way. Moreover, it may be argued that the analysis provides the weighted rank and finds out the right option from alternatives through the weighted rank method. Along with that, the analysis is based on qualitative attributes while the analysis is focused on both subjective and objective matter. Another important strength of the analysis is it is cost-effective in the decision making process.

Limitations

One of the biggest limitations of the analysis is the criteria that are used in the calculation even though it may differ in various situations while it is extremely complex to rank the different substitutes. On the contrary, it may be implied that some essential criteria are not focused in the analysis although the analysis is extremely simple and it may neglect some serious problem in the decision making process. Another limitation of the analysis is it mistreated the suppliers’ behaviours which may harm the ultimate solution of the problems. Additionally, innovative thinking and new ideas are missing in the analysis which may differ the results.

Conclusion

From the above discussion, it may be concluded that selecting the right raw material suppliers is one of the biggest problems of an organization while an effective decision has to be made by the management of the organization to select the suppliers. Moreover, it may be derived that excellent quality of raw material helps to make the supreme quality of products which indicates the selection of suppliers is extremely essential for the organizational growth of an organization. Furthermore, the different selection criterion is used to select the right raw material suppliers for the organization which helps to increase the competitive advantage of the organization. In addition to that, the SMART technique is extremely simple and it is used to select the right suppliers between different substitutes although due to lack of information the technique is not effective in the complex decision making process.

References

Ahn, B.S., 2017. Approximate weighting method for multiattribute decision problems with imprecise parameters. Omega, 72, pp.87-95.

Batra, M. and Agrawal, R., 2018. Comparative analysis of decision tree algorithms. In Nature inspired computing (pp. 31-36). Springer, Singapore.

Calabrese, M., Iandolo, F., Caputo, F. and Sarno, D., 2018. From mechanical to cognitive view: The changes of decision making in business environment. In Social Dynamics in a Systems Perspective (pp. 223-240). Springer, Cham.

Chai, J. and Ngai, E.W., 2020. Decision-making techniques in supplier selection: Recent accomplishments and what lies ahead. Expert Systems with Applications140, p.112903.

Cunha, A.L., Santos, M.O., Morabito, R. and Barbosa-Póvoa, A., 2018. An integrated approach for production lot sizing and raw material purchasing. European Journal of Operational Research, 269(3), pp.923-938.

Ezbakhe, F. and Pérez-Foguet, A., 2021. Decision analysis for sustainable development: The case of renewable energy planning under uncertainty. European Journal of Operational Research291(2), pp.601-613.

Gupta, B., Rawat, A., Jain, A., Arora, A. and Dhami, N., 2017. Analysis of various decision tree algorithms for classification in data mining. International Journal of Computer Applications163(8), pp.15-19.

Kunigami, M., Kikuchi, T. and Terano, T., 2018, April. A Formal Model of Managerial Decision Making for Business Case Description. In General Conference on Emerging Arts of Research on Management and Administration (pp. 21-26). Springer, Singapore.

Marttunen, M., Lienert, J. and Belton, V., 2017. Structuring problems for Multi-Criteria Decision Analysis in practice: A literature review of method combinations. European Journal of Operational Research, 263(1), pp.1-17.

Patel, M.R., Vashi, M.P. and Bhatt, B.V., 2017. SMART-Multi-criteria decision-making technique for use in planning activities. Proceedings of New Horizons in Civil Engineering (NHCE-2017), Surat India.

Rashidi, K., Noorizadeh, A., Kannan, D. and Cullinane, K., 2020. Applying the triple bottom line in sustainable supplier selection: A meta-review of the state-of-the-art. Journal of Cleaner Production269, p.122001.

Shrestha, Y.R., Ben-Menahem, S.M. and Von Krogh, G., 2019. Organizational decision-making structures in the age of artificial intelligence. California Management Review, 61(4), pp.66-83.

Sutrisno, Solikhin and Wicaksono, P.A., 2018, October. Optimal decision making on raw material supplier selection and production planning via multiobjective optimization model. In AIP Conference Proceedings (Vol. 2013, No. 1, p. 020045). AIP Publishing LLC.

Taherdoost, H. and Brard, A., 2019. Analyzing the process of supplier selection criteria and methods. Procedia Manufacturing, 32, pp.1024-1034.

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