Dynamic Strategic Planning will provide insight into decision making techniques which can be used when there is a considerable amount of uncertainty surrounding the options. It will draw on several well established methods used in the field of decision analysis and will apply these methods to a typical business case. The business case will involve the launch of a new venture for which decisions must be made about the business size and product prices. The purpose of the case will be to demonstrate some real world applications for decision analysis and cost estimation techniques.
In particular, the course will cover three major topics; (1) cost estimation techniques, (2) decision analysis and (3) utility analysis. Cost estimation will focus on the use of a technique called technical cost modeling. These are process based cost analyses that track the individual elements of cost that arise as a result of the physical requirements of a manufacturing process. Decision analysis will primarily be addressed through the use of decision trees and will include related topics such as probability assessment (bayes theorem & likelihood ratios) and the value of information. Additional topics such as utility and value functions and multi-attribute utility analysis will also be addressed.
Classes will generally be divided into three segments; lectures, problem sessions and working sessions. The lectures are designed to introduce topics in cost assessment and decision analysis as well as to provide the students with the theoretical background needed to evaluate their business case. Problem sessions will involve of these techniques in order to reinforce the student's understanding of the most relevant concepts and to ensure they are able to apply the theories to practical situations. The working sessions will be primarily aimed at developing the business case, and will include time spent developing cost estimation tools and determining the most important parameters for the decision analysis problem.
There are two distinct assignments for all students to
complete BEFORE the beginning of the first class. One
assignment concerns decision analysis and the other concerns cost
estimation and the business case.