Description

Table of Contents

Executive summary ……………………………………………………………………………………………………………………… 3
Introduction ……………………………………………………………………………………………………………………………….. 3
Decision analysis technique ………………………………………………………………………………………………………….. 4
NPV calculation …………………………………………………………………………………………………………………………… 5
Assumptions ……………………………………………………………………………………………………………………………….. 9
The Simple Multi Attribute Rating Technique (SMART) ………………………………………………………………… 10
Recommendations ………………………………………………………………………………………………………………………. 11
Conclusion …………………………………………………………………………………………………………………………………. 12
References …………………………………………………………………………………………………………………………………. 13

Executive summary

The Conroy Manufacturing is a company which operates in different industries in Australia. And the objective of this report is to analysis project of lunching new gardening tools and equipment of the company. In this project, there need to be taken different critical decisions mainly about continuity of the project and suitable location for the production. Decision analysis techniques such as decision tree, Net present value, Expected value and probabilities has been used to this study to make more accurate decisions. Further SMART technique which mainly consider qualitative aspect of the scenario is used as alternative option to discuss this situation. And also strength and limitation of these technique and recommended course of actions have been discussed in this study. This report recommend to continue the project according to current situation and suitable location is depended according to different scenarios. Detail results of the study and recommendations have been discussed comprehensively in the body of the report.

Introduction

The Conroy Manufacturing Company is a company in Australia which operates in different sectors such as industrial materials, building materials, paints and consumer goods. When consider the last five year sales level of those product groups, it is indicated that sales of industry materials and paints have been reduced and the sales of building materials and consumer goods have need slightly increased. However amount of sales is still small in Convoy manufacturing company due to other established competitors. Therefore company has decided to introduce new gardening tools and equipment too. Market research is also conducted by the company considering customers’ decision making behaviors.
The Conroy manufacturing company has to make critical decisions regarding the new product launch. First decision that need to make by the company is whether this products launch continue or not. If the management decide to continue the project, then company need to develop the prototype for products. According to this scenario, if company can successfully develop prototype in December 2018, then company need to decide a location for production. There are two available locations for production and company need to consider many factors before decide the location. However there is 25% chance which couldn’t develop prototype as planed in December 2018. If so, company need to decide whether modify the prototype using extra cost or another one year or abandon the project. Again if prototype will be succeed, company need to decide the location for production of LM18. Develop the prototype in 2018 is highly critical to overall decision making process since market condition will be changed according to time that product launch. Therefore these condition also need to be considered before make the decisions.
Decision trees are the most suitable decision analysis technique for this kind of multiple stage problems. Further techniques such as Net Present Value (NPV) and expected value also has been used to this study.