A Decision of Uncertainty

A Decision of Uncertainty

Debra Dugard

University of Phoenix

QNT 561: Applied Business Research and Statistics

Dimitri Delis

August 9, 2010

A Decision of Uncertainty

Many decisions are made in business, and most decisions are made by analyzing facts and data derived from research. An efficient manager will utilize strategic probability tools while analyzing research data to validate the hypothesis constructed during the research. This paper will explain a business decision concerning product defection, the research method used to help validate the business decision, and the process for limiting the uncertainty in the business decision.

A manufacturing facility has seen a high volume of defective raw material, which is costly. The research and development team has been drafted to research this phenomenon, validate the claims, and search for another raw material supplier and compare and contrast suppliers. The purpose of the research has been clearly defined by management and understood by the research team.

The research process has been detailed to ensure validity and to strengthen the confidence of the team. The research team has drafted several questions to explore during their research. These questions include: What is the probability for a defective product? What are the supplier’s controls to catch defective products before they are shipped to the manufacturer? How many defective products has the manufacturer received? How many defective products has the supplier sold? How many defective products have been shipped from the manufacturer due to the defective raw material? What are the monetary effects of these defections to include waste, returns, and research? Could the manufacturer buy the same raw material from another supplier? If the raw material is bought from another supplier, is the risk of defection lower? Is the overall cost lower? Is the quality of the raw material the same? The research sampling design strategy is...