Question

Q1) ... “what-if analysis” is one of the four basic types of analytical modeling activities that are involved in using a decision support system. List all of the four types. Then, in your own words, explain how is “what-if analysis” applied with a suitable example.

Q2) ...

A firm has developed an organizational planning to automate the process of marketing logistics using the SCM software. The various steps in the planning and personnel responsible are described below.

The top management executives like the Logistics COO first analyze the situation, make a self evaluation, Competitor analysis. Establish a long range vision organization. Provides the statement of Supplier scorecarding and network redesign. The Supply planner and demand planner develops the statement of organizational planning for a short range duration of upto 18 months. The activities accomplished are trend detection, predictive analysis, and tracking activities to plan. The shop floor/procurement personnel who controls the regulation of day to day schedules, activities and costs. Establishes exception detection, notification and resolution along with collaboration of supply / demand with the trading partners.

Categorize the activities according to the type of planning and fill in the table appropriately. Provide justification for your answer.

Type of planning	Set of activities	Who is responsible?	Reasons

َQ3 ...  In the installation and implementation phase, we normally face difficulties to operate the new system or the improved application. To solve this issue, the firm can follow one of the conversion strategies. Discuss and compare in details between these conversion strategies in the table given below

Conversion Strategy	Description	Advantages	Disadvantages

Answer 1

There are four basic types of analytical modeling activities that are involved in using a decision support system:

1.What-if analysis:

observing how changing some variables may affect the other variables in the system. For example, if we increase the salary of all the employees by 10% what would be the effect on productivity and whether the Return on investment is good.

2. sensitivity analysis

It is observing how repeated changes in a variable are affecting the other variables. For example if we increase the number of working hours continuously what would be the impact on productivity. whether productivity is increased or decreased?

3. Goal Seeking Analysis

It is changing a variable continuously until another variable reaches its goal state. For example, continuously increasing the television advertisements till we reach the sales target.

4. Optimization analysis

It is the process of finding optimal values of certain variables in a given condition

What is a What-If Analysis?

The What-If Analysis is a decision making method that helps to make the right decision and think about what effect it will have on other aspects before taking the decision.

What-If Analysis example

A What-If Analysis is about analyzing the different scenarios when certain actions are taken. Then they look at which results contribute most to the objective. For instance, if a company is facing a manpower shortage high attrition rate, they want to find a new way to retain the employees. They will first discuss all the available ways and then look into the advantages and disadvantages of all the methods. The one which contributes more towards the objective is selected at the end. Some sample scenarios may be:

Increasing salary. The advantage is more and more employees will be interested and the challenge would be to maintain the profitability of the business.

Target based incentives. The advantage is that it will boost employee performance. The disadvantage is it may lead to unhealthy competition among the employees.

Improve the amenities in the company. The advantage is that the employees will be attracted to the amenities and may stay for a longer duration. The disadvantage is that a separate budget is to be allocated and again it increases the cost to the company.

Based on the possible situations described above, the company can make a decision. Costs will of course be included in the decision. However, the primary goal is not to limit themselves to a single solution, but to include all solutions in the decision.

Basically the what-if analysis includes the following steps

5 basic steps

The execution of the What-If Analysis can differ. In general, it is wise to follow the steps below to achieve a good result:

1. Make a team of decision-makers

The manager has to identify a few people in the company who can think out of the box and can suggest the changes.

2. Set of probable actions in solving a problem is to be prepared by the manager

In the team, all the people will discuss the said actions and they may propose new actions and for each action, the advantages and disadvantages are noted down

3. Risk assessment

The team will have a brainstorming session on what-if the actions are takes. What are the associated risks and also they keep a room for if any mistakes happen

4. Prepare an action plan

After all the discussion the team has to come up with a concrete action plan

5. Execution.

The last step is to execute what is decided and see the results in the real-time and make the changes as and when required

Type of planning	Set of activities	Who is responsible?	Reasons
Analyzing and self-evaluation	List of suppliers, The requirement identification Competitor analysis Establish a long-range vision organization statement of Supplier score carding network redesign	Logistic COO	Before starting any project self-evaluation depicts our strengths and weakness
organizational planning	trend detection predictive analysis tracking activities	Supply planner and demand planner	Needs to know the supply and demand before starting the procurement
Plan day-to-day schedules and activities	day to day schedules activities and costs exception detection notification and resolution	floor/procurement personnel