A sample decision tree example.

Background FSG is financial services division of an IT company CSC, where Sudhanshu and Murugan work as Manager and Sr Manager Business Development respectively. Durai Velan, Sales Vice President resides in US and takes care of the front end sales while Sudhanshu directly work on the responses and proposals to the customer from offshore. A nice relaxing after lunch discussion with friends, it felt good as Sudhanshu submitted Progressive Insurance Inc RFP yesterday evening and initial client CTO response during the RFP presentation gave good feeler to the Durai Velan. Durai specially called and expressed his happiness. A nice break after weeks of madness while preparing the response for Progressive RFP. After the tea Sudhanshu returned to his desk and was logging off from the system when phone rang. His manager Murugan was on the other side, a nice and wise guy but always came with bad news. Sudhanshu was required to attend the conference call with Durai, Murugan and several other stakeholders after going through the mail about a potential opportunity. A new RFP from Allstate, around ten documents talking about IT landscape of Allstate. He needs to go through all of them before the conference call in order to talk sense in the meeting. This is most probably going to be a Go No Go call, so understanding required technologies, checking bench strength existing capabilities, credentials were required Allstate RFP was very vague to say the least. Any RFP at the start tells whether it is staff augmentation opportunity or managed services. Staff augmentation opportunity only requires skilled resources and every thing else is managed by client while in managed services model a vendor has to provide wing to wing solution, including project management. BFSI sector where the client belongs to have a very bad win ratio for CSC it is mere 10 %. Other pure players such as CTS, TCS and Accenture have started offering very aggressive pricing, making things all the more difficult for CSC. Allstate opportunity from Allstate wanted CSC to provide delivery model also such as Staff Augmentation or Managed Services. CSCs win ratio also depends on the vendors participating in the bidding process. If CTS is participating, highest preference of Allstate will be CTS because of the last success CTS had in a FTFP (Fixed time, fixed price) project with Allstate. Going through the document Sudhanshu prepared following notes 1. Sudhanshu will have to work full time ( generally working 10 hours a day) for 3 weeks ( 5 days a week) as submission date is 3 weeks away 2. There would be technical inputs required from JAVA architect for solutioning 3. He will also need content editing teams full day improvising the near final draft 4. Looking at the data it was found that CSCs win ratio dramatically improves to 25% if going for Staff augmentation, but only if resources are available. 5. There is a requirement of 25 JAVA resources if only resources are to be provided in half of the cases they cannot provide required resources on time. 6. Fixed price project has win ratio is 7% and if the deal is bagged project will start in 4 months.

7. There is no JAVA bench and all the resources need to be hired if required immediately

Go-No Go Call:Call started and Durai said, guys brace yourself because CTS also received the RFP, but lets do it. Durai wanted to show some sales figure in his kitty so wanted to go for the deal. But presales head from offshore had a different opinion he knew that it will be some 400 hours of effort and winning chance is dismal. Durai wanted to weigh all the options and asked Sudhanshu to do some Maths for all the options. There was a call scheduled for tomorrow to discuss all the options. Bidding effort 400 hours (billing rate of $21/hour) Total fixed cost if CSC bids CSCs chances of winning when CTS is also bidding come down by 2% in either of the delivery models Total deal size is $10 million and Operating margin is 30% for CSC. Cost of hiring 25 JAVA guys would be around $10000 ( including 4 months salary before project starts), even if the project does not come they will all be absorbed in other projects in flat 30 days.

A sample linear programming problem Sudhanshus family is contemplating to invest some money in a shop and house in Delhi. This will ensure a steady monthly income and hence a good choice. The family wants a decent shop in good locality. Maximum size possible to afford is 1000 sqft in a good mall and it will give a rent of 10 rs/sqft per month when rented. Shops are costly and will come around 2500/sqft On house front, the house can be either 2 bedrooms or three bedrooms, but the cost of house generally depends on the size, i.e total carpet area in square feet rate goes as 1900 rs/sqft But the total desired size should not exceed 2000 as it will become unmanageable for the small family of Sudhanshu. House rent would be around 5/sqft Total budget which Sudhanshu has for shop and house combined together is 30 lacs ( he can get a loan for 30 lacs given his salary and repayment capacity) Please find the size mix of shop and house for Sudhanshu.