A manager is selecting among several international partners for a complex program. Each partner's costs, capabilities, and risks generate different possible paths. Which approach best provides a structured method to assess those paths before making a final decision?
Rely on qualitative personal insight gathered from prior engagements to choose the partner that appears the most workable
Select a unified cost limit across all partners to maintain a consistent reserve and simplify selection
Revisit archived documentation from previous partnerships and apply that data to predict results without adjustment
Build a structure of sequential paths, computing unique outcomes for each choice, then compare their relative merits
A branching model that lays out sequential options and evaluates each outcome is the essence of decision tree analysis (DTA). This method accounts for differing paths, allowing for a calculated measure of which route may be most beneficial. Consulting only archived data, relying on a fixed-cost approach, or leaning on qualitative insight can overlook unique uncertainties and fail to systematically compare diverse scenarios.
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