Harimann International Case Solution & Answer

Harimann International Case Solution 

Possibility 4-Acceptance of Order (with delay, 30%)

There is another possibility that the order will be delayed due to any circumstances, and in this situation, it is expected that Pioneer will pay only 30% of the original amount payable under the order. Thus, the revenue has now decreased to 148,020 Indian rupees. The incentives offered by the government are only applicable on the revenues that exceed 150,000 Indian rupees, thus in this situation the incentive is also in loss due to the delay. The resultant loss will be 311,380 Indian rupees.

Possibility 5- Acceptance of Order (with delay, 20%)

The last possible situation is when there is a delay in the completion and shipment of order, which would then result in the payment of only 20% of the original amount by the Pioneer. Hence, this would result in highest possible loss with 98,680 of revenue and resultant loss of 360,720 Indian rupees. In this situation, same condition is applied as in previous situation, which reflects that the government’s incentives will be lost.

E 1756
E 1757
E 1758
E 1759
E 17611
E 1761
Total At 50% At 30% At 20%
Revenue  82750 66,850 53,550 146000 71,500 72750 493,400 246700 148020 98680
Materials cost  32.500 31,500 19950 54250 18,700 31,500 188,400
Processing cost  38.250 21,350 21.000 73,750 42,900 26,250 223,500
Other direct costs  7,000 7.000 7,000 12,000 5,500 9,000 47500
Total cost 77750 59,850 47,950 140,000 67,100 66,750 459,400 459,400 459,400 459,400
Contribution•  5,000 7,000 5,600 6,000 4,400 6,000 34,000 -212,700 -311,380 -360,720
Government Incentives} 281238 140619 0 0
Total value 315,238 -72,081 -311,380 -360,720

Can Decision Trees be Used Effectively?

Decision tress can be used effectively in any analysis, which involves multiple variables. Each variable has its own effect on the overall decision. Through decision tree analysis, one can make predictions about the future outcome of any decision that has been taken. It also explains the situation that is under consideration, as well as it gives a broader view of the entire situation which helps to make an effective decision after analyzing of different multiple options. This approach helps in identifying the multiple outcome and alternatives that are available and its impact. The human mind is not capable of making a decision while analyzing all the possible outcomes and multiple factors all at a time. This drawback is successfully overcome through the use of decision tree presentation and chart analysis.The decision tree can incorporate in itself the numerical as well as categorical data. It uses algorithm in order to split the data based on alternatives into branches. Each branch is then analyzed separately and then its impact is spread over the entire tree. (Decision Tree, n.d)

By using the decision tree, the uncertain factors can be incorporated into the decision model mathematically and efficiently. The values that are calculated through decision making can provide better insight into the matter which then results in better decision making. It provides a systematic way to perform decision analysis and helps to maintain consistency and less dependence on few variables. With more complex data and number of variables, it provides systematic and structured model to effectively analyze the entire situation and thus, this results in effective decision making. Moreover, it is used to assess the risks which are associated with the uncertain events and by assessing the overall risk the option which shows that greater risks are eliminated until one best option is derived.

Analysis and Evaluation

For the analysis of all five stated situations that Dhawan is expecting, the decision tree was formed which gives the relative values and expected values from each situation. The situations are explained below:……………….

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