DSS application
Decision tree
Supervisor: Dr. Mohammed Saleh
A small electronics
company. In 6 months, a proposal is due for an electronic timing system for
downhill skiing events in the 2018 Winter Olympic Games. For several years,
this company has been developing a new form of “finish
beam” that records the
time at which a ski racer crosses the finish line. A finish beam is a critical
component in any ski timing system. They must be accurate to the millisecond
and immune to poor weather. They must also be able to distinguish between a
skier and a puff of snow crossing the beam, and they must maintain a wireless
data link with
the starting gate in conditions
which make radio transmission difficult (e.g. high mountains). When completed,
theirs will be superior to anything currently on the market. But their progress
in research and development has been slower than expected, and they are unsure
about whether your staff can perfect the technology and produce the components
in time to submit a proposal. they must make a decision about whether to press
ahead with an accelerated schedule of research and development, taking into
account your uncertainty about future events. Consider these facts:
- The Olympic contract pays $100,000 to the winner.
- If your R&D effort succeeds in developing the new beam (which will happen with probability p1), there is a good chance (probability p2) that your company will win the contract.
- If you decide to accelerate the R&D schedule for the purposes of developing the new beam, you will need to invest $20,000 in extra funds. With probability 1 − p1, this effort will fail to develop the
new beam in time.
- new beam in time.
- If you fail to develop the new beam, there is a small chance (probability p3) that they will still be able to win the same contract with their older beam of timing system that has already been developed. This involves no extra cost for research and development.their older beam model of timing system that has already been developed. This involves no extra cost for research and development.
at an additional production cost, above and beyond R&D costs.
This additional cost would be $5000 for the new beam of timing
system, and $4000 for the old beam model.
- Finally, if they win the contract, the finished product—whether the
- new or the old beam model—will cost an additional $2500 to produce,
- above and beyond the cost of building a prototype.
- Making a proposal requires developing a prototype timing system
