(FALL SEMESTER 2025-26 BMGT 101 L )

Dr. Y Raja Sekhar

PROFESSOR
School of Mechanical Engineering MODULE 2- CLASS 7
24-07-2025
MODULE-2 PLANNING
• Types of plans • Generic competitive strategies

• Steps in planning • Decision making – Importance of

decision making
• Strategic planning
• Development of alternatives and
process
evaluation of alternatives
• SWOT matrix • Decision making under certainty,
• Portfolio matrix uncertainty and risk.

• Porter’s industry
analysis
Types of plans
Planning: It refers to defining performance goals for the organization
and determining what actions along with necessary resources needed
to achieve the goals.
The planning function of management is the first and most critical step
in the management process. Planning involves:
• Establishing Objectives: The first step is to define clear,
measurable goals that the organization aims to achieve in a specific
time frame.
• Developing Strategies: Once the objectives are set, managers
need to develop strategies to achieve them. This includes identifying
the resources required, assigning tasks, and setting timelines.
Planning involves:

• Analyzing Alternatives: Managers must evaluate different courses

of action and choose the best option based on resources, risk, and
potential outcomes.
• Formulating Action Plans: Once the best strategy is selected,
detailed action plans are created, outlining specific tasks, timelines,
and responsibilities.
• Monitoring and Adjusting: Managers need to continually monitor
the execution of the plan and make adjustments as necessary to
ensure objectives are met.
Classification of Planning
Plans are classified based on activities
1. Operational
2. Tactical
3. Strategic
a. By Managerial levels - Top level Plans, Middle-level Plans and
Lower level Plans
b. By Time - Long-Term Plan, Intermediate Plan & Short-term Plan
c. By Use – Single and Standing plans
• Operational Plan: Operational plans are the plans which are
formulated by the lower level management for short term period of up to
one year. It is detailed and specific for day to day operations. It usually
covers functional aspects such as production, finance, Human
Resources etc.
• Tactical Plan: the Tactical plan is the plan which is concerned with the
integration of various organizational units and ensures implementation
of strategic plans on day to day basis. It involves how the resources of
an organization should be used to achieve the strategic goals.
• Strategic Plan: In Strategic plan it is formulated by the top level
management for a long period of five years or more. It takes in a note of
all the external factors and risks involved and makes a long-term policy
of the organization. It involves the determination of strengths and
weaknesses, external risks, mission, and control system to implement
plans.
By managerial level:

Top level Plans: Plans which are formulated by general managers and directors
are called top-level plans. Under these plans, the objectives, budget, policies etc.
for the whole organization are laid down. These plans are mostly long-term
plans.

Middle-level Plans: Managerial hierarchy at the middle level includes the

departmental managers. A corporate has many departments like purchase
department, sales department, finance department, personnel department etc.
The plans formulated by the departmental managers are called middle-level
plans.

Lower level Plans: These plans are prepared by the foreman or the
supervisors. They take the existence of the actual workplace and the problems
connected with it. They are formulated for a short period and called short-term
plans.
By time:

Long-Term Plan: The Long-term plan is the long-term process that business
owners use to reach their business mission and vision. It determines the path for
business owners to reach their goals. It also reinforces and makes corrections to
the goals as the plan progresses.

Intermediate Plan: Intermediate planning covers six months to 2 years. It

outlines how the strategic plan will be pursued. In business, intermediate plans
are most often used for campaigns.

Short-term Plan: Short-term plan involves pans for a few weeks or at most a
year. It allocates resources for the day-to-day business development and
management of the strategic plan. Short-term plans outline objectives necessary
to meet intermediate plans and the strategic planning process.
By use:

Single Plan: These plans are connected with some special problems.
These plans end the moment of the problems to be solved. They are not
used, once after their use. They are further re-created whenever
required.

Standing Plan: These plans are formulated once, and they are
repeatedly used. These plans continuously guide the managers. That is
why it is said that a standing plan is a standing guide to solving the
problems. These plans include mission, policies, objective, rules and
strategy.
FALL SEMESTER 2025-26 BMGT 101 L

Dr. Y Raja Sekhar

PROFESSOR
School of Mechanical Engineering MODULE 2- CLASS 8
28-07-2025
MODULE-2 PLANNING
• Types of plans • Generic competitive strategies

• Steps in planning • Decision making – Importance of

decision making
• Strategic planning
• Development of alternatives and
process
evaluation of alternatives
• SWOT matrix • Decision making under certainty,
• Portfolio matrix uncertainty and risk.

• Porter’s industry
analysis
Steps in planning

Being Aware of Developing Comparing Formulating

Opportunity Premises Alternatives in light supporting plans
(assumptions) of goals
In the light of : Such as plans to:
Market, Competition, In what environment Which alternative will buy equipment,
Customer wants, will firm plans give the best chance materials, hire &train
strengths and operate/ to meet goals at workers, Develop
weaknesses of the Internal or external lowest cost and new products
firm highest profit

Setting Identifying Quantifying plans by

Alternatives Choosing an making new budgets
Objectives/Goals
Alternative
What are the most Develop such
What firm wants to
promising budgets as: Vol. &
be and what firm Choosing a course of
alternatives to Price of sales,
want to accomplish action firm will operating expenses
and when accomplish firms pursue for plans, expenditure
objectives
for capital equipment
 Steps in planning
1. Being aware of opportunities (market)
• Although it precedes actual planning it is not strictly a part of the planning
process.

2. Establishing Objectives
• The second step establish objectives for the entire enterprise and then for each
subordinate work unit.
• Done for the long term as well as short term periods
3. Developing Premises
• To establish, circulate, and obtain agreement to utilize critical planning premises
such as forecasts, applicable basic policies, and existing company plans.
• Premises are assumptions about the environment in which the plan is to be
carried out.
• Forecasting is important in premising
[Link] alternative courses:
o There is seldom a plan for which reasonable alternatives do not
exist
o The more common problem is not finding alternatives but reducing
the number of alternatives
o The managers must usually make a preliminary examination to
discover the most fruitful possibilities
[Link] alternative courses:
Evaluate the alternatives by weighing them in light of premises and
goals
There are so many alternative courses in most situations
There are so many variables and limitations to be considered that
evaluation can be exceedingly difficult.
6. Selecting a course
 This is the point at which the plan is adopted - the real point of decision making.
 Occasionally an analysis and evaluation of alternative courses will disclose the two
or more are advisable and the manager may decide to follow several courses rather
than the one best course.
7. Formulating Derivative plans
 When a decision is made planning is seldom complete and the step is indicated.
 Derivative plans are almost invariably required to support the basic plan

8. Quantifying plans by budgeting

 After decisions are made and plans are set the final step in giving them meaning is
to quantify them by converting them into budgets.
 Roll budget of an enterprise represents the sum total of income and expenses with
resultant profit or surplus and budgets of major balance sheet items such as cash
and capital expenditures
Strategic planning process
SWOT (TOWS) matrix
• The SWOT framework can help identify
areas of improvement and paint a larger
picture of where you are and how to get to
the next step.
• Helps in decision making
• Helps to plan for future
SWOT (TOWS) matrix
Strengths Weakness
• New product line popular among buyers  High staff turnover
• Talented staff
 Huge production costs
• Over 100 crore in marketing budget
• 3 times more than our competitor  Disruptive technology
• Has 90% customer loyalty rate
BUILD UP
SHORE UP
INTERNAL Environment
INTERNAL Environment
Threats Opportunities
 Online retailers selling unbranded substitutes of  New demographic that loves our
our products, product,
 Competitors' use of social media channels for  A merger with two companies that
orders, promise new markets
 New government regulations that might change
market conditions
INVEST
MONITOR
External Environment
External Environment

[Link]
(FALL SEMESTER 2025-26 BMGT 101 L )

Dr. Y Raja Sekhar

PROFESSOR
School of Mechanical Engineering MODULE 2- CLASS 9
29-07-2025
MODULE-2 PLANNING
• Types of plans • Generic competitive strategies

• Steps in planning • Decision making – Importance of

decision making
• Strategic planning
• Development of alternatives and
process
evaluation of alternatives
• SWOT matrix • Decision making under certainty,
• Portfolio matrix uncertainty and risk.

• Porter’s industry
analysis
EXAMPLE OF SWOT – CASE STUDY 1
India's ambitious PM-Surya Ghar Muft Bijli Yojana, with an aim of one
crore rooftop solar plants by March 2027.

Here's a quick SWOT analysis on this initiative:

✳️Strengths:
👉 Abundant Solar Resource: Most Indian states boast 4–7 kWh/m²/day
solar irradiance.
👉Strong Policy Support: Central & state subsidies, coupled with net
metering regulations.
👉Cost-Effectiveness: Declining solar module costs and reduced T&D
losses from localized generation.
EXAMPLE OF SWOT
India's ambitious PM-Surya Ghar Muft Bijli Yojana

✅Weaknesses:
👉Discom Resistance: Revenue loss concerns from distribution
companies.
👉Market Barriers: Limited consumer awareness, skepticism, high
upfront costs, and lack of accessible credit.
👉Quality & Consistency: Risk of substandard installations and
inconsistent procedures.
EXAMPLE OF SWOT
India's ambitious PM-Surya Ghar Muft Bijli Yojana

✅Opportunities:
👉Expanding Markets: Large rooftops available in growing real estate
and MSME clusters.
👉Demand Drivers: Increasing corporate & government demand for
green energy.
👉Innovative Models: Rise of RESCO (pay-as-you-save), group net
metering, and peer-to-peer trading via blockchain.
👉Economic Impact: Significant job creation in installation and
servicing.
EXAMPLE OF SWOT
India's ambitious PM-Surya Ghar Muft Bijli Yojana

✅Threats:
👉Policy & Financial Risks: Policy uncertainty, subsidy disbursement
delays, and poor financial health of Discoms.
👉Operational Challenges: Grid integration complexities and
generation inconsistency due to weather.
👉Behavioral Hurdles: Landlord-tenant disconnect.
Case Study 2: SWOT Analysis

Ref:[Link]
[Link]/knowledge/swot-
analysis/swot-analysis-case-studies/
 Case Study 2: Amazon SWOT Analysis
Strength
• Brand Identity: Amazon is synonymous with online sales services, and Amazon
focuses on improving customer satisfaction during the business process.
• Pioneer advantage: Amazon is undoubtedly the leader in the online retail industry.
• Cost structure: Amazon effectively uses its cost advantage, operates on thin profits,
and is still profitable in trading.
• Business Development: Amazon continuously improves its service level and
provides diversified services.
Weakness
• Low-profit margins: Amazon has a very thin profit margin to maintain its cost-
leading strategy. But low-profit margins make companies vulnerable to external
shocks and crises, as well as other market changes.
• Seasonality: There is a seasonal difference between Amazon’s revenue and
business scope, with sales and revenue peaking in the fourth quarter of each year.
 Case Study 2: Amazon SWOT Analysis
Opportunity
• Today’s diversification of e-commerce business
• Continues to increase awareness of its own branded products and services.
• Amazon develops more local websites to participate in the international market.
With the international expansion of Amazon, some local businesses have the
opportunity to enter the international market.
• Promoting the strategic cooperation between Amazon e-commerce and its related
affiliated industries will drive positive development of the industry
Threat
• Loss of profits due to low-profit margins
• Patent infringement and other aspects of Amazon’s litigation
• E-commerce industry barriers to entry barriers
• Cybersecurity issues
 Case Study 2: Amazon SWOT Analysis
Amazon – Recent Development
How Amazon has seized the opportunity to successfully transform itself from an e-
commerce company into a global leading technology company! When Amazon
realized the limitations of the retail industry, it expanded its business boundaries
promptly. In addition to cloud computing and smart voice, Amazon has also contacted
third-party platforms such as logistics and suppliers, and even invested in the film and
television industry, making its business model more diversify.

In 2008, Amazon realized that content can

attract and extend users’ time on the
platform, and began to provide original
content on Prime Instant Video, Amazon’s
mainstream media video platform, and as
part of the Prime membership service.
Case Study 3: Starbucks SWOT Analysis
 Case Study 3: Starbucks SWOT Analysis
Strengths
•Starbucks Corporation is a very profitable organization, earning more than $600 million in
2004. The company generated revenue of more than $5000 million in the same year.
•It is a global coffee brand built a reputation for fine products and services. It has almost 9000
cafe shop in almost 40 countries.
•Starbucks was one of the Fortune Top 100 Companies to Work For in 2005. The company is
a respected employer that values ​its workforce.
•The organization has strong ethical values ​and an ethical mission statement as follows,
‘Starbucks is committed to a role of environmental leadership in all facets of our business’.
Weaknesses
•Starbucks has a reputation for new product development and creativity. However, they can
vulnerable to the possibility that their innovation may falter over time.
•The organization has a strong presence in the United States of America with more than
three-quarters of its cafe shop located in the home market. Some people think they need to
invest in different countries (national portfolios) to spread business risks.
•The organization is dependent on a main competitive advantage, the retail of coffee. This
could make them slow to diversify into other sectors should the need arise.
 Case Study 3: Starbucks SWOT Analysis
Opportunities
Starbucks is very good at taking advantage of opportunities. E.g. In 2004 the company
created a CD-burning service in their Santa Monica (California USA) cafe with Hewlett
Packard, where customers created their music CD.
New products and services that can be retailed in their cafe shop, such as low price
products. The company has the opportunity to expand its global operations. New markets
for coffee such as India and the Pacific Rim nations are beginning to emerge. Co-
branding with other manufacturers of food and drink and brand franchising to
manufacturers of other goods and services both have potential.
Threats
Who knows if the market for coffee will grow and stay in favor with customers, or whether
another type of beverage or leisure activity will replace coffee in the future?
Starbucks is exposed to rises in the cost of coffee and dairy products. Since its
conception in Pike Place Market, Seattle in 1971, Starbucks’ success has to lead to the
market entry of many competitors and copycat brands that pose potential threats.
• Strengths
 What do we do well? Or, even better: What do we do best?
 What’s unique about our organization?
 What does our target audience like about our organization?
 Which categories or features beat out our competitors?
• Weaknesses
 Which initiatives are underperforming and why?
 What can be improved?
 What resources could improve our performance?
 How do we rank against our competitors?
• Opportunities
 What resources can we use to improve weaknesses?
 Are there market gaps in our services?
 What are our business goals for the year?
 What do your competitors offer?
• Threats
 What changes in the industry are cause for concern?
 What new market trends are on the horizon?
 Where are our competitors outperforming us?

Ref: [Link]
Who use SWOT matrix?

• Human Resource Personnel: Skills, ideal work size, talents,

barriers etc
• Financial Planners: New projects, Capital requirement,
investment, diversification etc
• Strategic Planners: Leverage efficiency and protect interests
• Distributors: Sales Reps., Sales partners, Supply chain, etc
• Operations Managers: S/W efficiency, Production facilities etc
• Academics: Students, Faculty, Programs etc.
• Military : Tactical strength, Soldiers, Weapons etc
Benefits of SWOT Analysis
• Flexible applications: Can use a SWOT matrix to perform strategic planning,
competitive analysis, market research, product development, and a broad range of other
activities that aid decision-making.
• Low Cost: No training or special tools reqd. Just in-depth knowledge is enough.
• Actionable Insights
• Employee Contributions
• Easy Visualizations
• Employee collaboration
• Resource Efficiency: Helps identify the resources and reorganize them for improved
efficiency and productivity.
(FALL SEMESTER 2025-26 BMGT 101 L )

Dr. Y Raja Sekhar

PROFESSOR
School of Mechanical Engineering MODULE 2- CLASS 10
31-07-2025
MODULE-2 PLANNING
• Types of plans • Generic competitive strategies

• Steps in planning • Decision making – Importance of

decision making
• Strategic planning
• Development of alternatives and
process
evaluation of alternatives
• SWOT matrix • Decision making under certainty,
• Portfolio matrix uncertainty and risk.

• Porter’s industry
analysis
Portfolio matrix
(BCG-Boston Consulting Group)

A tool for allocating

resources
• The matrix shows the
linkages between the
growth rate of the
business and the relative
competitive position of the
firm identified by the
market share.
The Matrix classifies a firm’s products and/or services into a two-
by-two matrix based on two key dimensions:
1. Relative Market Share(y-axis): Represents the amount of
market share a product holds in its specific market. It
measures a company’s competitiveness.
2. Market Growth Rate (x-axis): Indicates the growth
potential of a product in a particular market.

The matrix consists of four quadrants

[Link] Marks (Problem Children)
• High market growth but low market share.
• Managerially intensive products that require significant investment to
increase market share.
• Ideally, these should be turned into Stars.
2. Stars:
• High market growth and high market share.
• Strategic products with growth potential.
• Require continued investment to maintain their position.
3. Dogs:
• Low market growth and low market share.
• Sustain themselves but won’t reach star status.
• Typically provide cash flows.
4. Cash Cows:
• Low market growth but high market share.
• Established products with stable cash flow.
• Benefit from economies of scale and cost advantages.
• The assumption is that an increase in relative market share
leads to increased cash flow.
• Market growth rates are typically categorized as high (above
10%) or low (below 10%).

In summary, the BCG Matrix helps organizations strategically

manage their product portfolio by assessing each product’s
position and growth potential
Porter’s industry analysis
Strategy formulation requires an analysis of the attractiveness of an industry and the
company’s position within that industry domain. This analysis becomes the basis for
formulating generic strategies.

In the analysis of the industry, Porter identified five forces:

(1) The competition among companies
(2) Threat of new companies entering the market
(3) The possibility of using substitute products or services
(4) The bargaining power of suppliers
(5) The bargaining power of buyers or customers.

On the basis of the industry analysis, a company may adopt generic strategies
 Generic competitive strategies
Overall Cost Leadership Strategy
• This strategic approach aims at reduction in costs, based to a great extent on experience.
• The emphasis may be on keeping a close watch on costs in areas such as research and
development, operation, sales, and service.
• The objective is for a company to have a low-cost structure compared with its competitors.
• This strategy often requires a large relative market share and cost-efficient operation.

Differentiation Strategy
• A company following a differentiation strategy attempts to offer something unique in the industry in
terms of products or services.
• Porsche sports cars are indeed special
• So is the Caterpillar Company, which is known for its prompt service and availability of spare
parts.
Focused Strategy
• A company adopting a focused strategy concentrates on special groups of
customers, a particular product line, a specific geographic region, or other
aspects that become the focal point of the firm’s efforts.
• Rather than serving the entire market with its products or services, an
enterprise may emphasize a specific segment of the market.
• Ex: Rolls Royce, Lamborghini etc.
(FALL SEMESTER 2025-26 BMGT 101 L )

Dr. Y Raja Sekhar

PROFESSOR
School of Mechanical Engineering MODULE 2- CLASS 11
04-08-2025
MODULE-2 PLANNING
• Types of plans • Generic competitive strategies

• Steps in planning • Decision making – Importance of

decision making
• Strategic planning
• Development of alternatives and
process
evaluation of alternatives
• SWOT matrix • Decision making under certainty,
• Portfolio matrix uncertainty and risk.

• Porter’s industry
analysis
Decision making – Importance of decision making
• Decision-making is defined as the selection of a course of action from
among alternatives; it is at the core of planning
• A plan cannot be said to exist unless a decision—a commitment of
resources, direction, or reputation—has been made.
• Managers sometimes see decision-making as their central job because they
must constantly choose what is to be done, who is to do it, and when,
where, and occasionally even how it will be done.
• It is also part of everyone’s daily life.
Effective decision-making is important for an organization's
success.

It helps in
Streamline processes
• Decision-making helps identify problems, evaluate options, and
choose the best action to resolve issues efficiently.
Save time and money
•Effective decision-making can help save time, reduce costs, and
improve productivity.
Use resources properly
• Decision-making can help organizations use their resources
efficiently.
Set goals
• Decision-making can help organizations reframe/achieve their
goals and objectives within a given time and budget.
Create a positive work environment
• Effective decision-making can help create a positive work
environment, leading to improved performance and employee
satisfaction.
Handle challenges
• Decision-making can help organizations effectively handle
challenges and resolve issues that may surface during their
everyday activities
Decision making is important because it helps organizations to
establish a clear direction and make informed choices about
resource allocation.
The steps involved in decision making in an organization are:

1. Identify the problem or opportunity: Recognize the need for a

decision.
2. Define the problem or opportunity: Clarify the issue and its objectives.
3. Gather information: Collect relevant data and facts.
4. Analyze options: Evaluate potential solutions or alternatives.
5. Evaluate alternatives: Assess the pros and cons of each option.
6. Choose an alternative: Select the best option based on analysis.
7. Implement the decision: Put the chosen solution into action.
8. Monitor and evaluate: Track the outcome and assess the decision's
effectiveness.
9. Review and adjust: Learn from the outcome and adjust future decisions
accordingly.
Additionally, consider:
1. Involve stakeholders: Engage relevant parties in the decision-making
process.
2. Consider multiple perspectives: Encourage diverse viewpoints.
3. Use decision-making tools: Apply frameworks, models, or software to
support the process.
4. Establish a timeline: Set deadlines for each step.
5. Communicate the decision: Share the outcome with relevant parties.
6. Document the decision: Record the process, rationale, and outcome
for future reference.
By following these steps, organizations can ensure a structured and
informed decision-making process.
Development of alternatives and evaluation of alternatives
• Assuming that we know what our goals are and agree on clear
planning premises, the first step of decision-making is to develop
alternatives.
• A limiting factor is something that stands as resisting
factor/scenario in the way of accomplishing a desired objective.
(these can be quantitative or qualitative)
• Recognizing the limiting factors in a given situation makes it
possible to narrow the search for alternatives to those that will
overcome the limiting factors.
• The principle of the limiting factor states that, by recognizing and
overcoming those factors that stand critically in the way of a goal,
the best alternative course of action can be selected.
Evaluation of Alternatives
• Once appropriate alternatives have been found, the next step in planning is
to evaluate them and select the one that will best contribute to the goal.
• This is the point of ultimate decision-making, although decisions must also
be made in the other steps of planning—in selecting goals, in choosing
critical premises, and even in selecting alternatives.
Quantitative and Qualitative Factors
• Quantitative factors are those that can be measured in numerical terms,
such as time or various fixed and operating costs

• The success of the venture would be endangered if intangible or qualitative

factors were ignored.
Qualitative or intangible factors are factors that are difficult to measure
numerically, Eg.:
• The quality of labour relations
• The risk of technological change
• The international political climate
• To evaluate and compare the intangible factors in a planning problem and
make decisions, managers must first recognize these factors and then
determine whether a reasonable quantitative measurement can be given to
them.
• If not, they should find out as much as possible about the factors, perhaps
rate them in terms of their importance,
• Next step is to compare their probable influence on the outcome with that of
the quantitative factors, and then come to a decision.
• This decision may give predominant weight to a single intangible factor.
Marginal Analysis:
• Evaluating alternatives may involve utilizing the technique of marginal analysis to
compare the additional revenue and the additional cost arising from increasing
output.
• If the additional revenue of a larger quantity is greater than its additional cost,
more profit can be made by producing more quantities and vice versa
• Marginal analysis can also be used in comparing factors other than cost and
revenue.
• For example, to find the best output of a machine, input could be varied against
output until the additional input equals the additional output.
Cost-effectiveness Analysis:
• An improvement on, or variation of, traditional marginal analysis is cost-
effectiveness or cost–benefit analysis.
• Cost-effectiveness analysis seeks the best ratio of benefit and cost; this means,
for example, finding the least costly way of reaching an objective or getting the
greatest value for a given expenditure.
(FALL SEMESTER 2025-26 BMGT 101 L )

Dr. Y Raja Sekhar

PROFESSOR
School of Mechanical Engineering MODULE 2- CLASS 12
05-08-2025
MODULE-2 PLANNING
• Types of plans • Generic competitive strategies

• Steps in planning • Decision making – Importance of

decision making
• Strategic planning
• Development of alternatives and
process
evaluation of alternatives
• SWOT matrix • Decision making under certainty,
• Portfolio matrix uncertainty and risk.

• Porter’s industry
analysis
Decision making under certainty, uncertainty and risk.
• Decisions are made under  Certain conditions
 Uncertain conditions and
 Risky conditions
• In a situation involving certainty, people are reasonably sure
about what will happen when they make a decision.
• The information is available and is considered to be reliable, and the
cause and effect relationships are known
• In a situation of uncertainty, people have only a meager database,
they do not know whether or not the data are reliable, and they are
very unsure about whether or not the situation may change.
• Moreover, they cannot evaluate the interactions of the different
variables
For example, a corporate company that decides to expand its
operation to an unfamiliar country may know little about the country’s
culture, laws, economic environment, and politics.
The political situation may be so volatile that even experts cannot
predict a possible change in government.

• In a situation with risks, factual information may exist, but it may be

incomplete.
• To improve decision-making, one may estimate the objective
probability of an outcome by using, for example, mathematical
models.
• On the other hand, subjective probability, based on judgment and
experience, may be used.
• All intelligent decision-makers dealing with uncertainty like to know
the degree and nature of the risk they are taking in choosing a
course of action
• One of the deficiencies in using the traditional approaches of
operations research for problem solving is that many of the data used
in a model are merely estimates and others are based on
probabilities.
• The ordinary practice is to have staff specialists come up with “best
estimates.”
• Virtually every decision is based on the interaction of a number of
important variables, many of which have an element of uncertainty
but, perhaps, a fairly high degree of probability.
• Thus, the wisdom of launching a new product might depend on a
number of critical variables such as

– the cost of introducing the product,

– the cost of producing it,
– the capital investment that will be required,
– the price that can be set for the product,
– the size of the potential market, and
– the share of the total market that it will represent.
CASE STUDIES ON DECISION MAKING
PROCESS

Case Study in Digital Supply Chain Management

pply Chain Management

[Link]
pply Chain Management

Figure. FMCG Value Chain Example

 Case Study in Digital Supply Chain
Management
• Supply Chain Process & Value Chain

Figure. Supply chain

information and goods
flows example in FMCG
industry
 Case Study in Digital Supply Chain Management
• Pain point and aspiration

Figure. Example of user pain point and needs to better understand problem or situation to address
 Case Study in Digital Supply Chain Management
• Opportunity for Improvement

Figure. Improvement areas to align with goals

 Case Study in Digital Supply Chain Management

• Opportunity for Improvement

In this case, traceability, productivity, and profitability become desirable
improvement areas to leverage company’s competitive advantage by
streamlining value chain.
1/ Traceability: Increase capability to trace asset / product movement
across value chain
2/ Productivity: Increase effectiveness across value chain
3/ Profitability: Increase yields profit or financial gain (both from cost
control and or revenue)
 Case Study in Digital Supply Chain Management
• ACTION- Map opportunity for improvement across value chain with
possible alternative solutions. You may use some digital use cases or specific
solution alternatives which related with your improvement areas and gather as
many as relevant information as possible.
 Case Study in Digital Supply Chain Management
• Weigh the evidence to choose among the alternatives
 Case Study in Digital Supply Chain Management
• Weigh the evidence to choose among the alternatives
• Beyond having an effort to choose the best options, our decision is only
as good as information we have about our choice options. The more
reliable facts and information we can gather and consider about a
decision, the more we can reduce uncertainty and make better choice.
Besides defining pros and cons of each alternatives, one of the best
approaches is to define your evaluation criteria and start to weigh the
evidence among the alternatives. You may modify and adjust the criteria
based on your requirements and needs. In this case, the criteria are
divided into two categories; Impact to business and ease of
implementation.
• For this case study, solution 1.a appears to be the most favourable
alternatives due to its higher business impact and ease of
implementation.
 Case Study in Digital Supply Chain Management
• Another popular approach to prioritizes your decision alternatives and
get the best options is using PACE (Priority-Action-Consider-Eliminate)
metrics
 Case Study in Digital Supply Chain Management
• Performance metrics
END OF MODULE - 2