FOT-320 Project’s Decision Science

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Table of Contents

Introduction
Choices faced by the organization
The decision
Data analysis
Consequences resulted from the decision
Conclusion
Recommendations
Works Cited

Introduction

There is a clear need to restructure the field of decision-making while focusing on the analytical strategies for business. The process of decision-making comprises of methodologies and techniques developed by successful entrepreneurs, for instance, decision tree analysis, which centers on the ability of stakeholders to identify and tap potential opportunities for growth (Keeney, 803). New emerging theories have a diverse approach in understanding the intricacies of decision-making.

Notably, human behavior is the core characteristic of decision making, which involves human thoughts. Essentially, decision-making integrates both the belief about events and reaction to the events. This is because decision-making is a response to situations under consideration, unexpected future concerns, and the results assessed based on personal values and current goals. The process involves breaking down the choice dilemma thus providing formal mechanism for reintegrating the result (Keeney, 803).

Brilux market for telecommunications equipment began falling because of the overbuilding fiber optic network. This caused the firm to rethink on the decision-making technique in order to regain the service providers who had stopped working with them. Brilux recognized the effect of competition, and required careful management of cash reserve and effective management. Brilux engineers developed a concept of FOT-320, which consisted of a removable card and main cabinet designed to distribute power and connectivity between cards.

The limited number of engineers forced the firm to produce cards in two phases; the first step involved developing cards with the cabinet. The second step involved designing the project leading to the product. The development of the cards began by developing prototypes that would verify the design.

A small internal production ran the design including changes to support customer trials. This was crucial in the generation of documentation essential for full production. The last stage demanded a transfer of the product assembly to a contracted manufacturer and platform for testing compliance.

Choices faced by the organization

There was considerable indecision in the development costs of the FOT-320 because there was a lack of full specification. After the design and assembly phases, the customers have to see the first models for market research and improvement on the quality. This is to support customer trials by providing accurate market potential, as commercialization would follow later. Marketing of the FOT-320 would be as an accessory of ARTAN data service policy because this will edge vendor competition.

The valuation of the project depended on the ability to achieve a least return on investment. Notably, the managers needed to follow the decision-making processes that embed sustainable development model. The concepts had to be both strategic and operational thus demanding the adoption of adaptive decision-making.

Consideration of cultural diversity was essential in the organization since it is not a transitory condition. Cultural diversity facilitates planning on the assumption of mutual understanding. Essentially, cultural differences require competence when handling in order to reconcile all stakeholders.

However, it is imperative to understand a group’s culture and its behavior in understanding deeper dimensions. Therefore, decision depends on the decision style, attitudes and perception of the decision makers. This clearly shows the relationship between cultural influence and human judgment.

The decision

The worth of the FOT-320 project was associated with the ability to attain the lowest amount of return on investment. For the development of the venture to go on, a minimum requirement had to entail a return competitive together with other projects that delivered ten percent after carrying out a tax return.

At a tax rate of fifty percent, the contribution margins were discounted at a hurdle rate of approximately twenty percent to approximate their current value. Importantly, the managers needed to follow the decision-making processes that embed sustainable development model.

The implicit gross margin was 5 % on each sales unit, which is a characteristic figure for any industry. The contribution discounted the hurdle rate of 20% assuming a corporation tax of 50%. The project was to achieve a minimum return of investment in order to go through board approval. Notably, the development of FOT-320 went hand in hand with the strategy carried out by the company, which worked towards maintaining a competitive edge that would be sustainable.

The cost of deploying the company’s equipment and responding quickly to market needs was at a lower level. The management team, in conjunction with Boucher, had to decide on whether to carry on with FOT-320 or not. The decision depended on two things: Brilux’s corporate energy, and a detailed study of the business aspect of such venture of a new product.

Data analysis

This venture supported the strategy to maintain a sustainable competitive edge by lowering operational cost and responding to new market needs. The decision the management faced was either to continue producing FOT-320 relying on the firm strategy or stop such a move.

The decision followed the detailed analysis of the business environment for the new product and customers’ reaction. The managers needed to be rational defined by the comparability to choice and value. A rational decision should seek to optimize the values of the customer rather than focusing on the alternatives.

The outline of the projected costs for the expansion stages amid estimates of the possible range of the costs is as follows. Table 1 will give a summary of the development-estimated cost for the FOT-320 at each stage.

Stage	Estimated cost	The range cost
First phase
Prototype	775,000	30
Small run	615,500	30
Phase two
Prototype	535,000	30
Small run	325,000	30
Commercialization	1,215,000	20

Notably, the information provided in the table above shows the probability of a positive prototype. The current market information in the study estimates a positive eighty and ninety percentage. The research also shows positive results from the customer trials of over ninety percent.

Year	Estimated sales forecast	The range
2004	400	50%
2005	800	70%
2006	1000	70%
2007	800	70%

The table shown above provides an insight to the sales forecast per unit for the production of the ARTAN product. These forecasts reflect the study of the market for a period of three years. The ranges reflect the uncertainties in the market relating to the volume of sales of ARTAN products. This means that the sales for 2004 can be between 200 and 600 units, since the estimated sales are 400 units.

The table shown below will summarize the hypothesis made relating to total market chance for the fiber optic transport and the market share. The tabulation assumed a contribution margin of $29,700, which represented a difference of sales price and incremental cost.

The fraction	The estimated sales	The range
F _transport	0.25	0.15
F _share	0.40	0.25

Consequences resulted from the decision

The case has numerous markings that depict a successful market opportunity. However, there are many uncertainties that come before making any decision that will have a lot of impact. Most importantly is the uncertainty that has a lot of potential to affect the resources of the above company.

One of the crucial factors that lead to successful dealings in business and industries such as the volatile and high-end technological industry is innovation. A business should welcome any developments or ideas that accommodate increased income. These developments can be helpful in conjunction with other products that the manufacturing company already sells.

Optical applications offer the fastest form of data transfer since they can carry information in the form of light. Notably, light travels extremely fast. Over the years, facts have always been pointing to the fact that fiber optical transport will grow into a modern standard in data transfer networks. This form of transport outsmarts traditional products in characteristics such as maintenance, speed and bandwidth.

The fall of 2002 saw a dive in the market for telecommunications. Service providers remained with more than enough network capacity, as well as levels of unsustainable debt. Service providers were expected to invest in modern network equipment a company like Brilux fared relatively more than others because the growth of data traffic was more than 30 percent per annum. For example, service providers mostly used Ethernet to offer services that were fast enough, and to generate new revenues, as well.

However, despite this, the company recognized the hard times that telecom equipment manufacturers were going through. The development of FOT-320 would serve as a major boost to the company. If the board embraced the idea, the project would engulf a large chunk of Brilux capital and take a lot of time. Therefore, the company had to take its time to evaluate this issue and make sure that its resources were used wisely.

Conclusion

Numerous methods and techniques are crucial to the science of decision. A decision is essential because it represents a response to a situation. Normative and descriptive theories raise distinct assumptions that try to explain the decision making process. Psychological decision theory is descriptive in nature and always focuses on how an individual chooses to decide. Rational decision theory, on the other hand, is rational and tries to elucidate on how decision makers should go about doing their businesses.

According to psychological decision-making models, distinct mechanisms aid people to process information or interpret their surrounding environments. These metal processes follow the principle that belief and values of an individual might play a part in influencing the way he or she processes information.

These core beliefs and values encompass concepts of the self, other individuals, as well as the script (Keeney, 807). Overall, the processes of decision-making have a strong cultural component that has a say in the decision style, perception, as well as attitudes of those making the decision.

Recommendations

However, it is crucial to note that the way people define values, ethics, or morality could cover the diverse perspective of many stakeholders involved in the process of decision-making. Notably, cultural diversity is a continuous phenomenon. Therefore, it is crucial to learn cultural competence. Thereafter, it will be easy to reconcile the potential of different stakeholders and their cultural differences. For this reason, organizations should think of including culture into their decision-making process.

Works Cited

Keeney, Ralph. “Decision Analysis: An Overview.” Operations Reserach, 30 (1982): 803-838.

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