Posted: January 4th, 2023

Reliability and Decision Theory

MGT-530 Module 05: Reliability and Decision Theory
Reliability refers to the consistency and dependability of a system or process. In the context of decision theory, reliability is an important consideration when evaluating the outcomes of different courses of action.

Decision theory is the study of how individuals and organizations make decisions under uncertainty and risk. It provides a framework for analyzing and comparing the potential outcomes and risks associated with different options.

In decision theory, reliability is often assessed using probability theory, which allows for the quantification of uncertainty and risk. For example, if a decision maker is considering two different courses of action, they may use probability theory to evaluate the likelihood of different outcomes occurring. This can help the decision maker choose the option with the highest expected value, which is the sum of the probabilities of all possible outcomes multiplied by the value of each outcome.

Reliability is an important factor in decision making because it can help decision makers identify options that are more likely to produce desired outcomes. By considering the reliability of different courses of action, decision makers can make more informed and effective decisions, and reduce the risk of negative outcomes.

A decision tree is a schematic representation of the alternatives available to a decision maker and their possible consequences (Stevenson, 2021).

Dream Games is an organization dedicated to the creation of innovative video games and consoles. The CEO of the organization needs to determine if, for this year, they will produce and sell the same console they have been selling for the past 5 years, or if they will produce and sell a new console which is more energy efficient, faster, and the graphics are higher quality. The expected project ( help with nursing paper writing from experts with MSN & DNP degrees)ed budget for the production department will be SAR 70,000,000. There is always the possibility of asking the organization to increase the budget, but it will have to be very well crafted, so it has the possibility of being approved. The CEO has been presented with the following numbers in relation to the two consoles:

Product

Investment

Production Price

Customer Price

Projected Sales

Old Console

66,660.000.00

SAR 133.32

SAR 399.96

875,000

New Console

99,990,000.00

SAR 199.98

SAR 599.94

1,100,000

After evaluating the data above and the gaming industry, do the following:

Develop a decision tree for Dream Games in relation to the current and new console production (include the decision tree in an appendix showing chance nodes, probabilities, outcomes, expected values, and net expected value).
Explain the process you used to develop your decision tree.
Using your decision tree, which product should Dream Game select for this year? Why?
Explain your reasoning for your recommendations to Dream Games in relation to the product they should produce and sell in the coming year.
Directions:

Your assignment is required to be four to five pages in length, which does not include the title page and reference pages, which are never a part of the content minimum requirements.
Support your submission with course material concepts, principles, and theories from the textbook and at least three scholarly, peer-reviewed journal articles. Use the Saudi Digital Library to find your resources.
Formatted according to APA 7th edition and Saudi Electronic University writing standards.
It is strongly encouraged that you submit all assignments into Turnitin prior to submitting them to your instructor for grading. If you are unsure how to submit an assignment into the Originality Check tool, review the Turnitin – Student Guide for step-by-step instructions.
Review the grading rubric to see how you will be graded for this assignment.

Module Overview

In this module, you will learn about the mathematical properties of reliability and the nature of decision theory as it relates to the operation of an organization. While there is some math in this module, it is no more difficult than adding, subtracting, multiplying, and dividing. The results of those calculations provide powerful insight to the reliability of processes to deliver the best solution.

Learning Outcomes

Evaluate the impact of product reliability on the decision-making process of operations management.
Examine the reliability computations value for operations management.
Differentiate the environments under which operations decisions are made.
Analyze the techniques that apply to decision making under uncertainty.
Readings

Required:

Review Chapter 4 & 5 PowerPoint slides – Operations Management

Supplements to Chapters 4 & 5 Click for more options Chapters 4 & 5 Supplement PowerPoint Slides – Alternative Formats in Operations Management

Cabanes, B., Hubac, S., Masson, P.L., Weil, b. (2021). Improving reliability engineering in product development based on design theory: The case of FMEA in the semiconductor industry. Research in Engineering Design, 32(3), 309-329.

Recommended:

Liao, S., & Liu, Z., (2022). Enterprise financial influencing factors and early warning based on decision model tree. Scientific Programming,2022, 1-8.

Kascelan, L., Pejic Bach, M., Rondovic, B., & Durickovic, T. (2020). The interaction between social media, knowledge management and service quality: A decision tree analysis. PLoS ONE, 15(8), 1-30. Module Overview

In this module, you will learn about the mathematical properties of reliability and the nature of decision theory as it relates to the operation of an organization. While there is some math in this module, it is no more difficult than adding, subtracting, multiplying, and dividing. The results of those calculations provide powerful insight to the reliability of processes to deliver the best solution.

Learning Outcomes

Evaluate the impact of product reliability on the decision-making process of operations management.
Examine the reliability computations value for operations management.
Differentiate the environments under which operations decisions are made.
Analyze the techniques that apply to decision making under uncertainty.
Readings

Required:

Review Chapter 4 & 5 PowerPoint slides – Operations Management

Supplements to Chapters 4 & 5 Click for more options Chapters 4 & 5 Supplement PowerPoint Slides – Alternative Formats in Operations Management

Cabanes, B., Hubac, S., Masson, P.L., Weil, b. (2021). Improving reliability engineering in product development based on design theory: The case of FMEA in the semiconductor industry. Research in Engineering Design, 32(3), 309-329.

Recommended:

Liao, S., & Liu, Z., (2022). Enterprise financial influencing factors and early warning based on decision model tree. Scientific Programming,2022, 1-8.

Kascelan, L., Pejic Bach, M., Rondovic, B., & Durickovic, T. (2020). The interaction between social media, knowledge management and service quality: A decision tree analysis. PLoS ONE, 15(8), 1-30.

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