A company is considering three vendors for purchasing a CRM system: Delphi Inc.,
ID: 422794 • Letter: A
Question
A company is considering three vendors for purchasing a CRM system: Delphi Inc., CRM International, and Murray Analytics. The costs of the system are expected to depend on the length of time required to implement the system, which depends on such factors as the amount of customization required, integration with legacy systems, resistance to change, and so on. Each vendor has different expertise in handling these things, which affect the costs. The costs (in millions of $) are shown below for short, medium, and long implementation durations.
Fill in the table below for maximum and minimum profit payoffs under each alternative. Round your answers to the nearest cent.
Calculate the amounts foregone by not adopting the optimal course of action for each possible implementation duration. Determine the maximum opportunity cost for each alternative. Fill in the table below. If your answer is zero, enter "0". Round your answers to the nearest cent.
Conduct a decision analysis to evaluate the choice of a vendor.
The aggressive strategy (minimin) is to choose the -Select-Delphi Inc.CRM International.Murray Analytics.Item 19
The conservative strategy (minimax) is to choose the -Select-Delphi Inc.CRM International.Murray Analytics.Item 20
The opportunity loss strategy is to choose the -Select-Delphi Inc.CRM International.Murray Analytics.Item 21
Decision Alternative Short Medium Long Delphi Inc. $3.50 $4.80 $8.80 CRM International $4.15 $5.75 $7.55 Murray Analytics $4.00 $6.30 $8.00Explanation / Answer
The maximum payoff of alternative is is the highest value of the alternative under different events
The minimum payoff of alternative is is the lowest value of the alternative under different events
Table A.
Decision
Alternative
Short
Medium
Long
Maximum Payoff
Minimum payoff
Delphi Inc.
$3.50
$4.80
$8.80
$8.80
$3.50
CRM International
$4.15
$5.75
$7.55
$7.55
$4.15
Murray Analytics
$4.00
$6.30
$8.00
$8.00
$4.00
Minimum Payoff
$7.55
$3.50
Opportunity Cost matrix:
Table B.
Decision
Alternative
Short
Medium
Long
Delphi Inc.
$3.50
$4.80
$8.80
CRM International
$4.15
$5.75
$7.55
Murray Analytics
$4.00
$6.30
$8.00
Minimum payoff (best payoff)
$3.50
$4.80
$7.55
Table C.
Alternative
Short
Medium
Long
Maximum Opportunity Cost
Delphi Inc.
$0.00
$0.00
$1.25
$1.25
CRM International
4.15-3.50
= $0.65
$0.95
$0.00
$0.95
Murray Analytics
$0.50
$1.50
$0.45
$1.50
Minimum Opportunity cost
$0.95
The aggressive strategy (minimin): From table A, select minimum value among minimum payoff column, i.e. $3.50 for the alternative Delphi Inc.
Select - Delphi Inc
The conservative strategy (minimax): From table A, select minimum value among maximum payoff column, i.e. $7.55 for the alternative CRM International
Select - CRM International
The opportunity loss strategy: From table C, select minimum value among maximum opportunity cost column, i.e. $0.95 for the alternative CRM International
Select - CRM International
Decision
Alternative
Short
Medium
Long
Maximum Payoff
Minimum payoff
Delphi Inc.
$3.50
$4.80
$8.80
$8.80
$3.50
CRM International
$4.15
$5.75
$7.55
$7.55
$4.15
Murray Analytics
$4.00
$6.30
$8.00
$8.00
$4.00
Minimum Payoff
$7.55
$3.50
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.