Consequences and Preferences Tables - Essay Example

Decision Tree Original Preference Table Sustain Buy New Machines Outsource Production Up Infrastructure 500 400 0 Keep Existing Capa 0 1000 600 Manage Capital 1000 0 300 Train Workers 600 600 0 Hire New Workers 0 200 0 Swing Weights Update Infrastructure 2 Keep Existing Capacity 0.25 Manage Capital 0.4 Train Workers 0.05 Hire New Workers 0.1 Overall Preference table Sustain Buy New Machines Outsource Production Update Infrastructure 1000 800 0 Keep Existing Capacity 0 250 150 Manage Capital 400 0 120 Train Workers 30 30 0 Hire New Workers 0 20 0 Totals 1430 1100 270 The decision represented above can be interpreted into three main decision branches, sustain production, buying new machines, or outsourcing production.

Each of these alternatives has a different payoff, which are represented in the preference table shown above. The first alternative is to sustain the growth of the company at the current level, and as depicted by the decision tree, the company can decide to update infrastructure or keep the existing capacity. The second alternative would be to grow the company, which can be done by either buying new machines or outsourcing production. Both of these alternatives have different sub-objectives, which are either training the current number of workers, or hiring new ones and retiring some of the old ones.

Other alternatives include updating the current infrastructure or keeping the current capacity. From the swing weights calculated, it is evident that managing capital is the most favorable factor, followed by keeping the existing capacity, updating infrastructure, hiring new workers, and training the old workers respectively. The overall preference table indicates that the best strategy is to sustain the company’s operations, followed by buying new machines, and the last alternative is to outsource production.