BBA312 DECISION ANALYSIS Mid Term Assignment Task brief & rubrics

Task

Students are required to develop a report addressing the specific exercises set out in the guideline below. Your report should be 2000-2500 words, excluding Title, Abstract, Table of contents, Bibliography and Appendices.

Exercise 1 (30 points).

All complex organizations must be broken down into manageable pieces to ensure that roles and responsibilities for making and executing critical decisions are clear. A good way to determine what the important decisions are in your company is to look at the sources of value in your business and then organize the macrostructure around them.

Take the case of British Gas, a division of the multinational energy and utility company Centrica. In 2006, faced with a serious performance crisis, the company’s new leadership team started looking at the sources of value in its business. Managers began by examining differences in profitability by service, by geographic area, and by customer segment. They discovered that profitability and growth varied much more by customer segment than by any other variable.

One segment used large amounts of gas or electricity and paid regularly through guaranteed direct debits. Decisions that helped the company retain these customers, such as how to handle home moves and how best to offer additional services, were most important for this segment. A second customer segment used less energy and paid regularly through a system of prepayment cards. Here the key decisions related to controlling costs, particularly those associated with processing additional payments and with meter reading. A third segment wasn’t as consistent in keeping up payments. For that group, the critical decisions related to managing receivables.

Recognizing those different sources of value, managing director Phil Bentley decided that the best way to structure the company was by customer segment. He established three separate businesses: Premier Energy, Energy First, and Pay-As-You-Go Energy. This new structure allowed him to place accountability for decisions that directly affected customers, such as service levels, positioning, and product bundling, in the business units. Corporate headquarters could focus on noncustomer-facing matters such as IT and finance. The alignment of structure and decisions helped British Gas improve its performance significantly. It reduced customer attrition from about 20% to less than 10%. Its bad debt fell, and the business began growing for the first time in years.

Source: Harvard Business Review. (2010). The Decision-Driven Organization.

(a) What was the objective of British Gas Leadership? (b) What is the information they collected? (c) How they analyzed this information? (d) What are the decisions taken and what are their impacts on British Gas?

Exercise 2 (40 points).

An advertising company has a proposal to make to its customer who wants to launch a new cosmetic product.

The client is motivated by the potential profits. Therefore, the advertising company should evaluate the potential sales that each marketing strategy can generate:

Marketing strategy 1: Advertise on the TV;

Marketing strategy 2: Advertise in TV and in supermarkets;

Marketing strategy 3: Advertise in TV, in supermarkets and via internet.

For simplicity, the demand the new cosmetic product is categorized as low, medium or high.

The table below shows how the sales the company will generate for each option depends on the level of demand in the market.

Marketing strategy

Low sales Medium sales High sales

1 – 4 000 – 8 000 20 000 2 – 12 000 – 4 000 12 000 3 – 20 000 -12 000 4 000

It is estimated that if strategy 1 is adopted the probabilities of low, medium and high demand are 0.3, 0.4 and 0.2, respectively. For strategy 2 the respective probabilities are 0.2, 0.4 and 0.4 while for strategy 3 they are 0.1, 0.2 and 0.7.

Determine the marketing strategy that the advertising company should recommend to its client based on expected sales. Draw the decision tree.

Exercise 3 (30 points).

You are the director of a hotel and check the level of costumer’s satisfaction with a questionnaire that the hosts answer when they leave the hotel and evaluate with a grade (from 0 to 10) the service given. The results of the last ones are:

8.5 8 7.5 6 9 7 7.5 8.5 5 9 8 7.5 7 9 6 9.5 8.5 8.5

6.5 7.5 7.5 9 7.5 8.5 8 8.5 8 8 8 9 7 8 7 7.5 8.5 8

If the goal is to reach, at least, a grade of 8, do you think the hotel is offering a good service?

After analyzing the most common causes of customers’ unsatisfaction and their frequency:

N Complaints Frequency 1 Small rooms 3

2 Bad quality food in restaurant 30 3 Receptionists do not speak English 15 4 Too far from city center 12 5 Very old TVs in rooms 4 6 Wi-fi does not work properly 25 7 Very high prices 5 8 A/C does not work in rooms 17

a. Sort the eight causes in a Cause-and-Effect diagram. b. Determine the most important causes and define an Action Plan for those ones.

Formalities:

• Word count: 2000-2500 words. • Cover, Table of Contents, References and Appendix are excluded of the total word count. • Font: Arial 12,5 pts. • Text alignment: Justified. • The in-text References and the Bibliography have to be in Harvard’s citation style.

Submission:

• Week 8: Via Moodle (Turnitin).

• Deadline: 27th November 2022 at 23:59 CEST.

Weight: This task is a 40% of your total grade for this subject.

Rubrics

Exceptional 90-100

Good 80-89

Fair 70-79

Marginal Fail 60-69

Knowledge & Understanding (20%)

Student demonstrates excellent understanding of key concepts and uses vocabulary in an entirely appropriate manner.

Student demonstrates good understanding of the task and mentions some relevant concepts and demonstrates use of the relevant vocabulary.

Student understands the task and provides minimum theory and/or some use of vocabulary.

Student understands the task and attempts to answer the question but does not mention key concepts or uses minimum amount of relevant vocabulary.

Application (30%) Student applies fully relevant knowledge from the topics delivered in class.

Student applies mostly relevant knowledge from the topics delivered in class.

Student applies some relevant knowledge from the topics delivered in class. Misunderstanding may be evident.

Student applies little relevant knowledge from the topics delivered in class. Misunderstands are evident.

Critical Thinking (30%) Student critically assesses in excellent ways, drawing outstanding conclusions from relevant authors.

Student critically assesses in good ways, drawing conclusions from relevant authors and references.

Student provides some insights but stays on the surface of the topic. References may not be relevant.

Student makes little or none critical thinking insights, does not quote appropriate authors, and does not provide valid sources.

Communication (20%) Student communicates their ideas extremely clearly and concisely, respecting word count, grammar and spellcheck

Student communicates their ideas clearly and concisely, respecting word count, grammar and spellcheck

Student communicates their ideas with some clarity and concision. It may be slightly over or under the wordcount limit. Some misspelling errors may be evident.

Student communicates their ideas in a somewhat unclear and unconcise way. Does not reach or does exceed wordcount excessively and misspelling errors are evident.