Analytical Thinking and Decision Making in IResearch Case Study

This paper discusses the importance of decision analysis and analytical thinking in the context of IResearch's case study. It outlines the challenges faced by IResearch, applies decision analysis and develops an appropriate decision tree, and recommends the most suitable approach for IResearch. The influence of probability estimates and uncertainty within the decision making process is also discussed.

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ANALYTICAL THINKING AND DECISION MAKING
Name
Course
Tutor
University
City
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Analytical Thinking and Decision Making 2
Analytical thinking and decision making
Introduction
Decision making and analytical thinking is fundamental to the progress of any company.
But, regardless of the decision making context, making verdicts depend on the forming of
judgements and developing choices. However, decision making becomes difficult at times due to
the rising of different factors which can affect the outcomes. Decision making is therefore a
process which involves data analyses and the application of available techniques and strategies to
resolve the problem under concern and develop an action plan (Betsch and Glöckner 2010, p.
270). In the case study provided, IResearch is faced with difficulties on whether it should submit
its proposal for ACME project because of some concerns. In this paper, I will provide more data
on decision making and analytical thinking as I look at the case of IResearch.
Discuss the value of decision analysis within the context of an organization
Decision analysis is the interactive, quantitative and systematic approach used to evaluate
and address the vital choices brought forward by companies both in the public and private sector.
ACME system pointed out two different software design entities which could develop their
software which could support the monitoring and accessing of its logistics and production
efficiently. IResearch was one of the companies which had the capability to develop the software
application needed by ACME systems. But the management at IResearch raised some concerns

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about ACME’s project and on whether to submit their proposal. Engineers and the management
at Iresearch arranged for a meeting to discuss about the project (Hinojosa et al., 2017, p. 180).
IResearch was to compete with one other firm for the tender and this gave it a fifty-fifty chance
to get the tender. In such a case, decision analysis is important to know how the organization
could develop a better proposal than that of the rival.
Decision analysis is Important for any entity but it requires the right information ability to
make right choices and synthesize that data. According to scholars, applying decision scrutiny in
the planned management process is valuable for any organization (Grant 2016, 3). In IResearch,
decision analysis between engineers and the management would help in reconciling viewpoints
about the project under concern. Through the decision analysis, IResearch could also be able to
decide on which software package and platform was suitable for ACME project. Decision
analysis is therefore valuable within the organizational context because it helps in problem
finding, solution and formulation of strategies.
Outline the challenges facing iResearch and discuss any assumptions you have made
Iresearch is facing some problems in applying for the tender given by ACME systems.
One of the major problem faced by IResearch is competition with the rival firm (Plessner,
Betsch, and Betsch 2011, p. 52). The existence of a rival firm means that they all have an equal
chance of getting the tender assuming that both firms provide similar services and have equal
market shares. It means that IResearch have to make better decisions while submitting its
proposal. In this case I assume that ACME systems will give the tender to the company which
offers to provide the best services. IResearch specializes on software application development
for engineering and production management companies. ACME requires the software

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application to be developed for a mobile platform or a web-based platform. IResearch will have
to consider both platforms and this calls for a meeting between the engineers and the
management to discuss more on the project.
Another challenge faced by IResearch is that the firm can only apply one platform for the
project and this makes it difficult for the company to develop a software package which can
work. The company therefore have to agree on the platform to use to determine the success of
the project (Schoenfeld 2010, 7). The company engineers came up with four software packages
which could help in the success of the project. The first software developed demanded a lot of
capital which makes it difficult to apply. The second platform had lower associated costs but its
probability of operating correctly was 45%. The third one had a probability of 75% while the
fourth had a probability of sixty five percent. IResearch can send the proposal but it will have the
greatest problem is to decide which approach to use so that it can get the best returns. The
decision have to be made before submitting the proposal meaning that a functioning software
package have to be submitted. IResearch will use some money to develop a proposal for ACME
but if IResearch gets the contract it will receive more money for software package development
(Salas, Rosen and Granados 2010, p. 942). The company will therefore have to assume that it
will get the contract by presenting a functioning software package to ACME. After gaining the
contract the company will make huge returns and this is very important to the company.
Apply decision analysis and develop an appropriate decision tree
A choice tree involves a diagrammatic demonstration of an issue and on this tree all
possible action courses are shown. In this tree all the action plans are shown. In this tree, all the
decisions are shown and the possible actions are also demonstrated. Decision tree has several

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stages and the management have to pay attention to every step (Provost and Fawcett 2013, p.
59). The first stage is referred as the construction phase where the management will have to draw
the tree and put all the financial outcomes and probabilities are placed on the diagram. In this
phase the management will consider the cost of implementing a given software and its benefits.
The management also determines the returns if it applies a given software to complete the task
given by ACME. If the program has more has a high probability of working then it can be used
in the proposal so that it can help Iresearch to get the tender. The most important costs such as
the cost of developing a software and returns are the only costs which are considered.
The other phase of decision tree is recommendation and evaluation stage. In this phase
the management rolls back the decision by calculation the expected value of all outcome points
then applies them in decision making while still working around the choice tree. In this phase the
management develops the action course which is to be followed (Greco, Figueira and Ehrgott
2016, p. 8). The manager can recommend IResearch to use first software because it has a high
probability of returns in the project. Using the best software in this case means that the company
can get more returns and increase the possibility of being given the tender. But the right
information must be used to avoid the application of a wrong software. The decision tree below
shows the variety of decisions that IResearch have to make. IResearch will have to make a
decision on whether to submit the proposal so that it can continue to choose which software to
use for the project.

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Decision tree
Preparation
of the
proposal
Success
Failure
Contract
awarded
Contract
not
awarded
Software A
Software B
Software C
Software D
Success
Success
Failure
Failure
Success
Failure
Success
Failure

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Calculating the expected values and following the rollback method, outline the most
suitable approach for iResearch. Discuss your recommendations for the managers of
iResearch
Rollback is a technique which is similar to SQL rollback data. The method is also known
as the “look back” technique and managers looks over the past subcontracts. While calculating
the expected values, you minus one month to the portion used in the production. The rollback
method helps in determining the expected values in the contract (Blanding 2012, 251). IResearch
can apply different approaches to make decisions on the best step to take. But rational approach
is the best because it is a step-by-step, and a systematic process which helps in making decisions.
But the decision makers must have all the data needed and be objective of what they are doing.
Calculation
The probability of getting the contract is 0.5 because there are two companies
The cost of preparing the proposal is £10,000 and £500,000 is paid upon receiving the contract.
The company uses Use software £145,000 in developing software A, £80,000 for B, £102,000 for
C and £92,000 software D.
Software A
145000 100 145000
Software B
80000
Succes
s
55
0.5 Failure
45
Contract
awarded
Software C Succes
s
75

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102000500000 Failure
25
Preparation of
the proposal
Software D
92000
Succes
s
55
10000 10000 Failure
45
Do not prepare
the proposal
0 0.5
Contract not
awarded
480000
The management requires to determine a suitable method so that it can be awarded the
tender. In this case, I would recommend the management to use software A when submitting
their proposal because it has a higher probability of performance than the other packages.
IResearch will therefore have an opportunity to use the best software that can help in increasing
the returns. The software must be able to satisfy the requirements as per the specifications by
ACME. It is because a software such as software B has low operation costs but its probability of
functioning is low. The company therefore cannot choose the program in terms of costs, it can
only choose in terms of the output. I would therefore recommend IResearch manager to take time
and look for all the information necessary for proper decision making. As discussed in this paper,
decision making requires managers to have the right information to avoid making unnecessary
choices.

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Strengths and limitations
There are some limitations and strengths associated with my analysis on decision making
(Grant 2016, p. 5). The strengths include all things that I have achieved to show in my context
while the limitations may include the things which are difficult to understand or have no
relevance (Plessner, Betsch, and Betsch 2011, p. 2). In my analysis I have been able to show the
importance of decision making in an organization and why the approach used matters. According
to my analysis, making decision on the type of software to be used is important because it will
help in determining the amount of capital to be used in making the proposal (Schoenfeld 2010,
p.5). Using the correct information in decision making also matters because it determines the
final decision made. I have used information from IResearch case study meaning that the
information is correct and the decisions made about the software development are all relevant.
The information is also reliable because it has a systematic procedure which can be replicated by
anyone in need of making decisions. In the context I have also applied qualitative studies which
are essential in the management and simplification of the data used without destroying the
meaning.
On the limitations side, the analysis does not give information about the rival company
for easy comparison of the systems used by the two companies (Levac, Colquhoun, and O'Brien
2010, p. 69). If my analysis had information on the two companies it would be possible to
determine the level of completion which is present. In such a way, it would be possible to
determine if the company has a probability of fifty percent. Additionally, the research does not
focus more on quantitative research which can help in giving more information which can help
in better decision making. In my analysis, it is evident that the cognitive thinking is used for

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decision making and this method limits the analysis of the outcome. The management proofs,
axioms, paradoxes and cognitive demerits involved in decision making in group decision making
can lead to rise of cost overruns, deferred choice making and conflicts (Uusitalo, Lehikoinen,
Helle, and Myrberg 2015, p. 24). The analysis therefore contains multi-faceted limitations and
strengths.
Discuss the influence of the iResearch engineers changing their initial probability
estimates. Discuss the influence of probability estimates and uncertainty within the decision
making process
ACME promised to award the contract to the company which had the best software
capability and technical plan. The engineers decided to develop different platforms which could
fit the project. All the software packages developed by these engineers had different probabilities
and associated costs (Kahneman and Tversky 2013, p. 270). The change in possibilities have a
great influence on decisions made because they determined the cost and probability of
performing. According to the values given, some had higher performance capabilities than others
while others had high associated costs than others. Changing the probability estimates would
help in simplifying the decision making process because it became easier to predict which
software will perform in accordance with the set specifications (Renn 2017, p. 2).
Most decisions are made under uncertainty because no one knows what the future holds.
The management also have to use probability instead of real figures which means that something
positive or negative can happen. The management chooses actions under imperfect observations
and this may lead to either negative or positive outcomes (Snyder and Diesing 2015, p. 7). The

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process of decision making under the use of uncertainty leads to the involvement of deep
research and studies to avoid giving the wrong probability figures. Uncertainty and probability
estimates therefore have a great influence on decision making.
Conclusion
IResearch being awarded the tender is a probability because it has an equal chance with
its rival. But making the right decisions on how to develop a functioning software can give it a
better chance to stand out in the offer. In this paper I have given important data on the decision
making process and following the data can help IResearch to get the tender. Decision making
requires discussions with the involved people and extensive research by the management to
determine what should be done to achieve the best.

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