Decision Theory

Case Study

Decision Making using Quantitative Techniques

using

Expected Monetary Value (EMV)

Introduction

Business Wide Solutions is one of the leading IT companies in India, delivering business solutions through the dedicated services and adopting proven practices in different domains managed by team of seasoned, highly qualified and future visionary professionals, post graduates, engineers, consulting experts and MBAs having more than 2 decades of experience in various industry sectors like Manufacturing, Re-Engineering, Finance, Aviation, Transport, Quality and Engineering both in India and overseas.

The company is providing services in the areas of software development, ERP solutions, consulting on information security, project management, ITIL and business continuity projects. One of the profit making divisions is 'Database Support Services' headed by Senior Manager. This division takes care of getting support contacts on Oracle Database related activities and offering the services to different clients located across India. The clients are charged based on the nature of and complexity of the problem.

Overview/Analysis

The mode of operation is like this: Once the service call is received, suitable consultant would deputed. Then, it's his responsibility to complete the service and close the call. He has to come down to Chennai airport by road either by public transport or by a car and then take a flight to the client location.

The following table shows the list of clients of the company offering the data base services.

Table -1 : List of Clients

Client Name Location

Focus System Coimbatore

Vinciti Coimbatore

Top System Bangalore

Win Core Bangalore

Enterprising Enterprises Bangalore

Pipes India Madurai

Eye-Net Solutions Madurai

Table -2 : Average no of calls received and calls missed

Location Avg. no calls/PM Calles Missed

Coimbatore 7 4

Bangalore 12 5

Madurai 5 2

Table-3: Average Revenue Per Call (Location Wise)

Location Revenue (Rs)

Coimbatore 25,000

Bangalore 45,000

Madurai 17,000

Of late the company is facing the problem of reduction in revenue generated in this department. The primary reason for this is: the support engineers unable to catch the flight from Chennai airport on time whenever they travel by bus to the airport. However, if they travel by car, they could reach the airport in time. The company management is evaluating the options sending the consultants by bus or by exclusive vehicle to reach the Chennai airport in time. The head of the division has been under pressure by the management to find some way out.

The following table shows the chances of missing the flight for the 2 mode of transports:

Mode Failure Rate

By Bus 10 %

By Car 1.5 %

The