Using the PrOACT Model to Make a Decision on Your Own

Sigourney and Jason Robards 

Problem 

The decision problem Sigourney and Jason Robards are facing is how to expand their production capacity and at the same time keep the costs involved down. The decision problem has been triggered by a number of factors such as the couple working alone from the basement of their large home, the steady rise in the demand for FNS products and the need to increase the production capacity in anticipation of a sharp rise in demand during the holiday season. The couple faces a number of constraints including limited availability of funds, a small workforce and uncertainty about the demand during the holiday season. 

Objectives 

Increase production capacity 

Increase sales volume and business revenue 

Expand the customer base 

Maintain adequate inventory levels 

Avoid being unreliable and disappoint customers 

Minimize costs and avoid losses. 

Alternatives 

This refers to the options that are available as far as arriving at each identified objective is concerned (Hammond, Keeney and Raiffa, 2015). 

To increase production capacity, Sigourney and Jason Robards can: 

Employ bonded and vetted temporary workers 

Ask some friends and family to volunteer in exchange for some favors 

Invest in new production equipment 

Outsource some production to relatives and friends willing to be part of the business 

Crowd source funds 

To increase sales volume and business revenue Sigourney and Jason Robards can: 

Take a bank loan and expand the business 

Look for people willing to invest in the business 

Employ two more workers on a permanent basis 

Consider social media marketing 

Open a store from where products can directly be sold to consumers 

To expand the customer base, Sigourney and Jason Robards have the following alternatives: 

Conduct a social media marketing campaign 

Take part in more expos 

Approach leading retailers and retail chains in a bid to get a supply contract 

Increase product offerings 

Reach out to potential customers in places other than California 

To maintain adequate inventory levels: 

Employ more employees to aid in the production process 

Invest in better production equipment 

Maintain number of customers at a sustainable level 

Maintain normal production levels while anticipating an insignificant increase in demand during the holiday season 

Outsource production to friends and relatives willing to be part of the business 

To avoid being unreliable and to disappoint customers the couple can: 

Increase their production capacity in anticipation increased demand 

Encourage potential customers to pre-order products prior to the commencement of the production process 

Offer proper packaging 

Make deliveries in a timely manner’ 

Promptly respond to customer concerns 

To minimize costs and avoid losses, the business owners can: 

Maintain the current levels of production 

Hire employees on a temporary basis 

Avoid purchasing new equipment 

Use their personal savings to expand the business 

sign long-term contracts with established businesses such as grocery stores 

Consequences 

This step involves comparing the alternatives to have a better understanding of their impact. A consequence table comes out as a simple yet powerful way through which the alternatives can be compared (Gregory, ‎Failing and Harstone, 2012). The following is the consequence table for FNS 

FNS Consequences Table
Objectives	Alternative A	Alternative B	Alternative C	Alternative D	Alternative E
Increase production capacity	fair	fair	good	good	good
Increase sales volume and business revenue	fair	bad	fair	good	good
Expand the customer base	good	good	great	fair	good
Maintain adequate inventory levels	good	good	great	fair	good
Avoid being unreliable and disappoint customers	fair	great	good	good	good
Minimize costs and avoid losses	bad	fair	bad	bad	good

. 

Trade-off’ 

This step involves examining the balance between the unfavorable and favorable outcomes. The need to evaluate trade-off among objectives is due to the fact that some times, objectives are in direct conflict with each other (Hammond, Keeney and Raiffa, 2015). A ranking table provides an important way of evaluating the trade-offs. It takes the same structure as the consequence level, with the only difference being that the descriptions are replaced with ranks for each objective. The following is the ranking table for FNS. 

FNS Consequences Table
Objectives	Alternative A	Alternative B	Alternative C	Alternative D	Alternative E
Increase production capacity	3(tie)	3(tie)	2(tie)	2(tie)	2(tie)
Increase sales volume and business revenue	3(tie)	4	3(tie)	2(tie)	2(tie)
Expand the customer base	2(tie)	2(tie)	1	3	2(tie)
Maintain adequate inventory levels	2(tie)	2(tie)	4	3	2(tie)
Avoid being unreliable and disappoint customers	3	1	2(tie)	2(tie)	2(tie)
Minimize costs and avoid losses	4(tie)	3	4(tie)	4(tie)	2

To get a clear winner out of all the alternatives, the dominated alternatives are first removed. For alternatives that have tied, even swaps are done (Guo and Pedrycz, 2013). Based on this, the best alternatives for Sigourney and Jason Robards as far as achieving the identified objectives is concerned are: 

Invest in new production equipment 

Consider social media marketing 

Employ two more workers on a permanent basis 

Outsource production to friends and relatives willing to be part of the business 

Encourage potential customers to pre-order products prior to the commencement of the production process 

Sign long-term contracts with established businesses such as grocery stores 

References 

Gregory, R., Failing, L., Harstone, M., Long, G., McDaniels, T., & Ohlson, D. (2012). Structured decision making: a practical guide to environmental management choices : John Wiley & Sons. 

Guo, P., & Pedrycz, W. (Eds.). (2014). Human-Centric Decision-Making Models for Social Sciences : Springer. 

Hammond, J. S., Keeney, R. L., & Raiffa, H. (2015). Smart choices: A practical guide to making better decisions . Harvard Business Review Press.