The Decision Framework 800 words.

3. The Decision Framework

3.1 Decision criteria

Multiple Linear Regression Model

In the multiple liner regression model based on the demand over previous months’ time, the criterion remains to determine the demand in terms of number of passengers for each month of the next year.

What – if Analysis Model decision

Net savings (Positive) due to outsourcing	Outsource
Net loss (negative) due to outsourcing	Make-in-house

AHP Model

The decision criteria can be many factors relating to the desert, such as price and quality. In our example, we select 4 criteria (price, quality, delivery and capacity) to show how AHP model works and the sub-criteria for delivery are compliance with due time and compliance with quantity.

3.2 Decision alternatives

In our example, alternatives are SWAT, Supplier 1, Supplier 2, Supplier 3, Supplier 4, Supplier 5. SWAT is the alternative that we make the dessert ourselves.

3.3. Decision model

As shown in the Appendix F, the decision model is an integrated process involving four analytic models, namely multiple linear regression model, what-if analysis model, pivot table model and lastly, AHP model. Starting with the prediction of demand for the next year, the multiple linear regression model can be used to predict the quantity of dessert units that would be required for the inflight meals. Thereafter, using the predicted quantity or demand, the decision model involves determination of whether to make or buy the dessert units from different supplier through what- if analysis model. This model analyses the net savings (positive or negative) cross various prices as well as quantities for the same problem. A key point to be noted here is that if the model determines a negative net savings, the best option would be to continue making the dessert in the flights of Swat Airlines. Thereafter, the decision framework utilizes a PivotTable model to filter the range of suppliers on the basis of different criteria such as quality, delivery, capacity and price. Lastly, in order to find out the best alternative from the selected range of suppliers, the decision model integrates an AHP model to find out the optimum supplier based on the priority or ranking obtained from the model.

Decision Framework