QBUS Industries Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Question 3 (15 marks)

QBUS Industries has decided to transport 20 of its new uranium powered Robots to Perth for an exhibition. The robots are very heavy and while not easily damaged, need to be treated carefully. There is a risk of them being stolen and reverse engineered by our evil competitor. The table below summarizes the relative merits and costs of each of the four transport options using SMART based weightings for the attributes that are important to us. The benefits are mutually independent. For the weights of the attributes themselves, we have decided Convenience should have a weight of 10,

Safety of 60, and Punctuality should be 30.

(a) Which form transport has the highest valued benefit? Show your working. (5 marks)

Option	Convenience	Safety	Punctuality	Costs ($)	Benefits
Space	0	100	75	70,000	82.5
Road	100	0	60	40,000	28
Sea	80	60	0	90,000	44
Air	60	70	100	150,000	78

(b) Plot the benefits against costs and identify the efficient frontier (5 marks)

(c) QBUS Industries would consider Road Transport that provided 100 points of safety worth $70,000 more than it is now. Which form of transport should we select? Show your working. (5 marks)

Option	Convenience	Safety	Punctuality	Costs ($)	Benefits
Space	0	100	75	70,000	82.5
Road	100	100	60	110,000	88
Sea	80	60	0	90,000	44
Air	60	70	100	150,000	78

Question 4

Part A

(a) Draw the probability tree for calculating the probability of a catastrophe for each robot.

(b) Solve the tree (showing your working on the probability tree) to determine the chance of a catastrophe.

The chances of catastrophe according to the probability tree are 5.5233E-09 %

Part B

Determine P (manual shutdown attempted | robot exploded)

The Probability of Explosion when technician presses wrong button is 3.4E-09 %.

Based on this information, should we advise our technicians to never press the diagnostic button when doing the eye-stalk operation? Why?

The decision cannot be made on the basis of this information alone. We need to compare this probability with the Probability of Explosion when technician does not press the button. That probability is found to be 1.6966E-09 % which is lower than the probability of Explosion when technician presses the wrong button. Thus, we should advise our technicians to never press the diagnostic button when doing the eye-stalk operation.

Part C

QBUS Industries is a proud and clever organization and so we would not actually randomly choose which capacitor to replace. Based on minimizing the chance of the catastrophe, which chip should we replace and what is the new overall chance of a catastrophe occurring? Show your working.

Initially, the assumption was that both the capacitors have 50 - 50 chance of getting replaced. However, according to the probability tree, it is seen that the Probability of Explosion when A53 is replaced is 5.0966E-09 %, while the Probability of Explosion when Q97 is replaced is 4.267E10 %. So, we will not select A53 because it has a higher probability of explosion.

Part D

Decision on financial considerations, not simply on reducing the probabilities

Each Robot costs $200,000 for us to build. If a robot explodes in the lab, there would typically be no additional damage. If the robot exploded in the field, there would be additional damage, estimated to be a further $50,000 on average. Replacing the chip behind the hover-pad is marginally more expensive, as the robot needs to be held rotated. It costs $6350 for the hover-pad operation compared with $6200 for the eye-stalk operation.

One engineer suggested that we simply expose all the robots to high levels of the dangerous sonic frequency in the safe condition of the lab. If they exploded, it would still save us money as 2% of $200,000 is less than the costs of repairs.

Draw and solve the decision tree for this problem, paying careful attention to formatting. Include the options of doing nothing and the engineer’s suggestion. Identify decisions that you should make at each stage and the expected costs per robot across the whole robot fleet.....................................

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