Report on Operation management

In the present work, two different case studies are considered, and the final decision is based on the decision tree. The other considerations in the case studies include expected values, probabilities, nodes, the net expected values, and expected values. The final decision can be defended on the basis of the decision tree. 

Supplements of report

The present report considers different supplements under the process, the deliverables are mentioned below,

 Demonstrate and develop all the process and several decision trees.

Development of a decision tree for two cases.

Explanation of the whole process for the developing of the decision tree.

Drawing the decision tree with consideration of net expected values, expected values, nodes, outcomes, and probabilities.

Defend all the final decision based on the decision tree.

Figure 1: Decision tree with possible choices (Rokach & Maimon, 2005)

Case study 1

The first case under consideration is about the operation manager for the cereal producer and the manager was facing issues about choices. In the case study, the large-scale investment was done to purchase a new cooker. The cooker will produce a substantial payoff in terms of the increased revenue and net costs. The author Magee, 2019; Rokach & Maimon(2005), statses that about the descision making for the decision trees where the process requires an initial investment of 3,7 50, 000 Saudi Riyal. The extensive research market is considered in the research with minimum 40% chances to payoff. The payoff in the analysis is approximately 9, 375, 000 Saudi Riyal. The chances of successful outcomes are 60% and it becomes 3, 000, 000 Saudi Riyal (Magee, 2019; Rokach & Maimon, 2005).

On the basis of the present assessment, the operation manager for the cereal producer will have to select one of the choices and these choices are mentioned below, 

Extensive market research shows that there are 40% chances of payoff with 9, 375, 00 Saudi Riyal.

The second chance is associated with 60% change and it will be only 3, 000, 000 Saudi Riyal.

In the first condition, the improvements are carried out by increasing the demand yield at a lower cost and the higher reliability. The management finalized the first condition with high favour due to outcomes. The chances of payoff are 40% while on the other hand, the chances of lower-cost pay-off are 60%. In the first condition, even the chances are lower but the outcomes and payoff that are leaves of the decision tree are higher as compared to the second choice.

It is reviewed by the author Song & Lu (2015) where the author states that differnet prediction and applictaion of the decision tree methods. In this article  the author disscss about the Decision tree methodology is a commonly used data mining method for establishing classification systems based on multiple covariates or for developing prediction algorithms for a target variable. In the first choice with 405 chances, the outcomes are 9, 375, and 000 that is relatively three times greater than the second option. In the growth phase, the important factor is the accurate projection of the demand growth rate. The capacity of services increases with interesting demand. In the next phase, the services and product analysis are considered. According to the condition, the costs are low while the productivity is high. In this phase, the decision must be based on the existing services, working conditions, and resources needed (Song & Lu, 2015).

Case study 2

The second case study for the operation management and decision tree making process is different. The smaller-scale project is to refurbish an existing cooker. The cost of the process is about 1, 875, 000 and the process is less costly, and the outcomes are higher with a lower pay-off. The data is collected extensively that suggest a change of 30% gain of 3, 750, 000 Saudi Riyal. The chance of getting the gain is about 70% change and it is about only one for 1, 875, 000 Saudi Riyal.

 The process can be continued without any change in the present operation and the cost of the process is nothing. There is no condition of pay-off in the outcomes. It is important to use one of the analyze the current situation on the basis of published articles (Rokach & Maimon, 2005). In the case, there are two possibilities as mentioned below,

The chance of gain is 30% for 3, 750, 000 Saudi Riyal.

The second chance of gain is 70% with 1, 875, 000 Saudi Riyal.

According to the author Hautaniemi (2005), states about the Modeling of signal–response cascades using decision tree analysis. Whereas the mathematical analysis of how cell responses are governed by signaling activities is challenging due to their multivariate and non-linear nature. In this case, the existing advantages are tremendous. The cost tends to be very low with a higher chance of gain. The additional gain is higher in the first option with the percentage gain of 30% and the outcome of 3, 750, and 000. The systematic approach of managing the series and process stages is for the relatively short period. The process is related to standardization and reduction in variety. There is a limit on the range of customers that work for the services and product (Hautaniemi, 2005)

 To complete the policy there is a limit of the range for the customers to get the product and improve the payoff in Saudi Riyal. The present issue considers a variety of risk about product type, variety, methods and freezing the designing process. The company manager has to decide whether it is beneficial to develop a small plant or to a new plant with an expected market. The decision under the present condition hinges on the product and size market. The possible demand for services and outcomes is high if the initial users find a satisfactory product (Rokach & Maimon, 2005; Song & Lu, 2015).

According to the author Song & Lu (2015), states that about the methods of the decision tree. This method classifies a population into branch-like segments that construct an inverted tree with a root node, internal nodes, and leaf nodes. The company can develop a large plan on the basis of market demand, management, plants, and other processes. At this level, the company is uncertain to take a decision so that it can grow rapidly. In the first option, the company has to maintain different operations of the small plant and it will generate a higher profit on the low volume (Song & Lu, 2015).

Conclusion

The aim of the present work is to develop a concept of the decision tree. The decision tree has tremendous potential on the final decision, and it can clarify the management for the best option. The decision tree does not include any analytical process about objectives, risks, choices, information, and monetary gains. The results show a great deal about the decision trees and novelty that can be implemented in the present business. The common information involved in the tree is about the investment issues and management process. The decision tree describes the characteristics of approaches and how management can access it.

References of Operation management

Hautaniemi, S. (2005). Modeling of signal–response cascades using decision tree analysis. Bioinformatics, 21(9), 2027–2035. Retrieved from https://academic.oup.com/bioinformatics/article/21/9/2027/409069

Kabari, L. G. (2013). Decision Support System Using Decision Tree and Neural Networks. Computer Engineering and Intelligent Systems, 4(7). Retrieved from https://pdfs.semanticscholar.org/6373/331fb10a7787003e7140198fa841e3736f72.pdf

Magee, J. F. (2019). Decision Trees for Decision Making. Retrieved from hbr.org: https://hbr.org/1964/07/decision-trees-for-decision-making

Rokach, L., & Maimon, O. (2005). The Data Mining and Knowledge Discovery Handbook.

Song, Y.-Y., & Lu, Y. (2015). Decision tree methods: applications for classification and prediction. Shanghai Archives of Psychiatry, 27(02), 130-135.