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Da Smart and Ppa
Da Smart and Ppa
Da Smart and Ppa
(Kepner-Tregoe Approach)
Situation
Analysis (SA)
What is going on?
problem
decision future event
Decision Potential
Problem
Analysis (DA) Problem
Analysis (PA)
What should we Analysis (PPA)
Why did it happen? do? What lies ahead?
DECISION ANALYSIS (DA)
USING SMART
(Simple Multi Attribute Rating Technique)
Introduction
• Decision problem that involves a number of objectives tends
to overlook making tradeoff between these objectives. It
causes these problems:
Selection of option that perform well only for particular
objective(s)
Rejection of attractive option since their good
performance in some objectives can’t compensate bad
performance in another objective.
Introduction
For example:
– A laptop is rejected because of its slow processor speed,
despite its compactness, reliability, and low price.
– A supplier is chosen because of his low price, despite his
slow delivery times and poor after-sales service.
Introduction
• Those problems rise since decision maker has limited
information processing capacity.
• When face a large and complex problem:
– too much information to handle simultaneously.
So that a decision maker is forced to make simplification
• Attributes/Criteria
– Measure performance in relation to an objective
– If the objective “maximize the exposure of a television
advertisement”
• The attribute: “number of people surveyed who recall
seeing the advertisement”
Value & Utility
• For each course of action facing a decision maker
– There is a numerical score to measure attractiveness
• Value - if no element of risk/uncertainty
• Utility - if risk/uncertainty involved
Value
• A numerical score to measure attractiveness that involves no
element of risk/uncertainty
costs benefits
costs benefits
benefits
No cost criteria (skip Stage 7)
costs
benefits
Denver Street 70 50 30 55 30 90
Filton Village 0 0 70 0 80 0
II. Visibility 90 0
best
III. Image 80 0
best
IV. Size 70 0
V. Comfort 60 0
VI. Car-parking facilities 50 0
a. Ranking level of importance of 40 0
best
each attribute 30 0
best
assigning the most 20 0
best
preferred with weight 10 0
100. 0 0
worst worst worst worst worst worst
b. Comparing the rest attributes with the most preferred
How much important:
improvement from the worst improvement from the worst
alternative to the best compare to alternative to the best alternative
alternative of visibility, of closeness to customer
SMART-Stage 5
Determining weight of the attributes
best
100 0 Location Original Normalized
90 0 Weights Weight
best
80 0 Closeness to 100 0.32
best customers
70 0
Visibility 80 0.26
60 0
50 0 Image 70 0.23
40 0
best Size 30 0.10
30 0
best
20 0 Comfort 20 0.06
best
10 0
Car-parking 10 0.03
0 0 facilities
worst worst worst worst worst worst
closeness visibility image size comfort car-parking
to facilities
customer
Comfort 0 0.06 0
Total 80.8
SMART-Stage 6
Calculating aggregate of weighted value
Total Aggregated
Location
Cost ($) Benefit
100 0
A Addison Square 35,000 80.8 90 0
A
80 0 x
B Bilton Village 17,800 39.4 E
70 0 x
G
value of benefit
C Carlisle Walk 6,700 47.4 60 0 x
D
x C
50 0 x
D Denver Street 14,100 52.3 B
40 0 x
E Elton Street 34,800 64.8 30 0 F
x
20 0
F Filton Village 18,600 20.9
1500 10 0
G Gorton Square 12,000 60.2 0 0
40,000 30,000 20,000 10,000 0
cost
100 0 A G
90 0
A $ 35,000 80.8 $12,000 60.2
80 0 x
$5,300 12.8
70 0 $ 6,700
C point
G
value of benefit
60 0 x 47.4 $414/point
C
50 0 x $23,000 20.6
$12,000
40 0 G point
30 0 60.2 $1,117/point
20 0
10 0
Decision maker compares C & G:
0 0
40,000 30,000 20,000 10,000 • If his extra value point < $ 414
Cost ($) Carlisle Walk
• If his extra value point ≥ $ 414
Decision maker compares G & A: Gorton Square
• If his extra value point < $ 1,117 Gorton Square
• If his extra value point ≥ $ 1,117 Addison Square
SMART-Stage 7
Provisional decision: trading benefit vs cost
3. If the owner has difficulty in choosing the most preferred efficient frontier point
benefits
costs benefits
Image 0 0
Size 30 0.5
Comfort 20 0.333
Car-parking 10 0.167
facilities
Image 70 0.28
Size 0 0
Comfort 0 0
Car-parking 0 0
facilities
100 0 100 0
90 0 90 0
80 0 80 0
Value of benefit
Value of benefit
70 0 70 0
60 0 60 0
50 0 50 0
40 0 40 0
30 0 30 0
20 0 20 0
101500 1500
0 1500 1500 1500 1500 1500 1500 1500 1500 1500 10 0
1500
0 0 0
0 10 20 30 40 50 60 70 80 90 100
weight placed on turnover
SMART-Stage 8: Sensitivity Analysis
100 0 100 0
90 0 90 0
80 0 80 0
Value of benefit
Value of benefit
70 0 70 0
60 0 60 0
50 0 50 0
40 0 40 0
30 0 30 0
20 0 20 0
101500 1500
0 1500 1500 1500 1500 1500 1500 1500 1500 1500 10 0
1500
0 0 0
0 10 20 30 40 50 60 70 80 90 100
weight placed on turnover
• As long weight of total turnover < 52.1 Elton Street is the most attractive
• When weight of total turnover > 52.1 Addison Square is the most attractive
SMART-Stage 8: Sensitivity Analysis
benefits
costs benefits
problem
decision future event
Decision Potential
Problem
Analysis (DA) Problem
Analysis (PA)
What should we Analysis (PPA)
Why did it happen? do? What lies ahead?
The Future
• Potential Problems
– Focus on undesirable deviations
– What could go wrong?
– What can we do about it now?
PPA Techniques
1. Identify Potential Problems
2. Identify consequences for the Potential
Problems
3. Identify causes for the Potential Problems
4. Prepare preventive actions to address the
potential problems
5. Prepare contingency actions to reduce the
effects if preventive actions fail or not
possible
PPA for Addison Square
POTENTIAL CONSEQUENCE POSSIBLE PREVENTIVE CONTINGENT
PROBLEM CAUSE ACTION ACTION
Cannot pay Expelled from Rent is so Negotiate for a Rent smaller
rent property expensive longer term, space for front
lower rent office and
move back
office to
cheaper
location
Low cash flow Create Change
after moving to promotional business model
new office program
Uncomfortable High employee Old dark Refurbish the Move to
office turnover building office with another
bright color location
and new
furniture