W4_UDS_ Non-Compensatory Method for Tank Truck Builder Selection

  1. Problem Evaluation

There are 5000 tank trucks operated around Indonesia, this tank truck are bought in each region or area. We have a new strategy to buy it centrally because it would be cheaper if we buy more and it would easier in procurement processing and after sales service guarantee. So to do this strategy we have to choose one tank truck builder.   

  1. Development of feasible alternatives

There are three tank truck builders in our vendor list as a candidate to run this plan:

  • PT Meco Inoxprima (Meco)
  • PT Aweco Indosteel Perkasa (Aweco)
  • PT Patria Focal (Patria)
  1. Development the outcome for each alternative

To choose the best tank truck builder I am using Non-Compensatory Method. This method can be implemented for select the best alternative with certain attribute that are independent and the one attribute cannot predict any of the others. Four Non-compensatory methods will be analyzed:

  • Dominance
  • Satisficing
  • Disjunctive resolution
  • Lexicography

Each model is prepared to decide on the best alternative. 

  1. Selection of criteria

There are four attribute to compare in each method to get best alternative:

  • Product Price
  • Product Endurance
  • Pant Location
  • After sales service

We will choose alternative in the highest rank of all method to get the best one. 

  1. Analysis and comparison of the alternative

Each alternative are compared with four attribute are show below:

5.1 Dominance Method

We compare all alternatives each other based on four attributes

Table 1. Dominance Result

5.2 Satisficing Method

Based on minimum to maximum range acceptable value there is no unacceptable alternative because they come from vendor list. All vendor list have been selected before.

Table 2. Satisficing Result

5.3 Disjunctive Reasoning Method

We compare all attribute each other based on important value to determine what is the most important attribute. Price and Plant location have same important score, but based on pair wise comparison price more important so it put in the higher rank.

Table 3. Disjunctive Reasoning Result

5.4 Lexicography Method

Based on attribute rank ordering all alternative compare each other.

Table 4. Lexicography Result

  1. Alternative selection

All the methods show Meco is dominating over other alternative, so we will run the plan with Meco as tank truck builder.

  1. Performance monitoring & Post Evaluation Result

Each method is showing possible alternative with different ways and maybe different result. If there is no dominant alternative among all method, we can choose the optimum one or do the next level comparison method like Compensatory Method.

References

  1. Planning Planet. (2017). Multi-Attribute Decision Making. Retrieved from http://www.planningplanet.com/guild/gpccar/managing-change-the-owners-perspective Figures 8-14
  2. Sullivan, G. W., Wicks, M. E., & Koelling, C. P.(2014). Engineering economy 16th Edition. Chapter 14 – Decision Making Considering Multiattributes., pp.559-608.
  3. Norris, G. A., & Marshall, H. E. (1995). Multiattribute decision analysis method for evaluating buildings and building systems. National Institute of Standards and Technology.
 

W3_UDS_Terminal Operating Cost Evaluation

  1. Problem Evaluation

Kediri Fuel Terminal was closed on 2009 because it is inefficient. Now this area is distributed from Surabaya, Malang and Madiun Fuel Terminal. Best on future demand estimation, fuel volume of this area will be raising and we need more storage of new product. Those are the reasons why we want to reopen Kediri Fuel Terminal again.

So we need to evaluate Operating cost of Kediri Fuel Terminal quotation from our subsidiary is IDR 130/Liter. Is the quotation appropriate? If it is not, how much is operating cost of Kediri Fuel Terminal?

  1. Development of feasible alternatives

There are three options approach in evaluate Operating cost of Kediri Fuel Terminal :

  • Accept the quotation, as price as IDR 130/liter (Alternative A).
  • Using cost approach estimation. Historically in 2009, Kediri Fuel Terminal cost/liter was about IDR 108 (Alternative B).
  • Using comparison with other Fuel Terminal cost that operated by ourselves. The cost/liter is IDR 157 (Alternative C).
  1. Development the outcome for each alternative

In this evaluation I am using Benefit – Cost ratio method in Evaluating all alternative. This method is very useful to select alternative in economical approach with a simple way, because it compare positive (cash in) and negative (cash out) cash flow of each alternatives.

  1. Selection of criteria

The Rule of thumb in Benefit – Cost ratio method is Alternative will be feasible if B-C ratio greater than one. So in this evaluation we will eliminate alternative with B-C Ratio less than one, because it not economically feasible (their cash out higher than their cash in).

  1. Analysis and comparison of the alternative

This calculation using data as below:

  • discount rate 10.5% (as a Pertamina Hurdle Rate of Investment)
  • Investment Cost (I) = IDR 19,854,221,656
  • Benefit (B) per/year = IDR 100,937,362,800
  • Operation & Maintenance (O&M) /year :
    1. Alternative A = IDR 54,674,404,850
    2. Alternative B = IDR 45,421,813,260
    3. Alternative C = IDR 66,029,858,165
  • There is no market value because we use it until the end of the life cycle (20 years)

Conventional B-C ratio with PW:

Modified B-C ratio with PW:

B-C ratio each alternatives:

Table 1. B-C Ratio Result

All the alternatives are shows B-C Ratio’s calculation greater than one. So all alternative is economically acceptable.

  1. Alternative selection

Base on B-C Ratio Alternative B is preferred to be used because it gives the highest value than other but it use historical data of year 2009. As we know 8 years is a long time and everything has changed, so it would be better if we use Alternative A. This alternative is a second highest value and also more efficient than operating cost that operated by ourselves.

  1. Performance monitoring & Post Evaluation Result

Different alternatives only affect the amount of the B-C ratio, no effect on project tolerability. Extra analysis needs to be done to present input in order to acquire a better conclusion.

References

  1. Sullivan, G. W., Wicks, M. E., & Koelling, C. P.(2014). Engineering economy 16th Edition. Chapter 10 – Evaluating Project with the Benefit – Cost Ratio Method., pp.467-491. Prentice Hall.
  1. Planning Planet. (2017). Benefit Cost Analysis. Retrieved from http://www.planningplanet.com/guild/gpccar/managing-change-the-owners-perspective
  2. Mind Tools. (2017). Cost-Benefit Analysis. Retrieved from https://www.mindtools.com/pages/article/newTED_08.htm
 

W2.1_UDS_Choosing a New Fuel Terminal Location in Dumai Using Additive Weighting Technique in Multi-Attribute Decision Making

  1. Problem Evaluation

Location of the new Fuel Terminal is one critical factor that determines operational success. Especially in build new fuel terminal, we must consider at least two aspects such as land aspect and sea aspect. The fact is very hard to find the location that has both aspects perfectly like example building project of a New Fuel Terminal in Dumai. But if we get the best one it has already bought or developed, so we have to choose the optimum location.

  1. Development of feasible alternatives

In the beginning there are three alternative locations in Dumai for build new Fuel Terminal, among others:

  1. Patra Dok Dumai
  2. Beside Refinery
  3. Beside Existing Terminal

Figure 1. Alternative of a New Fuel Terminal Location in Dumai

Our purpose is build a sea feed Terminal so the third alternative which don’t have coastline can be eliminated. So The Team will choose two locations to build new Fuel Terminal to meet minimum operational criteria.

  1. Development the outcome for each alternative

Choosing the optimum location is decision making strategy. There are some theories in Multi-Attribute Decision Making that can help us to find the optimum (Table 1). In this case we use “Additive Weighting Technique” because base on our team discussion each criteria have different relative importance. With this technique we can find the best (Optimum) location based on calculation between weighted / rank and scoring of the criteria.

Table 1. Multi-Attribute Decision Making Technique

The find the best location by using Additive Weighting Technique, First we have to do is select the criteria of land and sea aspect. Second, we make a weighting of the criteria. Weighting criteria may come from proportional rank of the criteria or expert judgment. Third, we give a number (Likert scale 1-3) in every criteria and time it with the weighting of every criteria. So we can choose the location with the highest score.

Table 2. Additive Weighting Technique Step

  1. Selection of criteria

Summary result of the weighting criteria each alternative as follow :

Table 3. Weighting Land Aspect Criteria

Table 4. Weighting Sea Aspect Criteria

Base on sum result of Table 3 and Table 4, Patra Dok Dumai location gets the highest score.

  1. Analysis and comparison of the alternative

Additive weighting calculation show Patra Dok Dumai location gets higher score in sea aspect criteria but lower score in land aspect criteria. It indicate this location is not the best but the optimum alternative that we have.

  1. Alternative selection

Choose the optimum not the best alternative is not a bad decision. It could be happen as long as they pass minimum requirement of operational success and we already prepare all of the mitigation of the risk.

  1. Performance monitoring & Post Evaluation Result

Even we already have the chosen alternative base on operational aspect also we have to evaluate the alternative base on economic aspect. Maybe in economic view our alternative not feasible to run so must go back to beginning and do this iteration until we get feasible alternative both on operational and economic aspect.

  1. References
    1. Planning Planet. (2017). Multi-Attribute Decision Making. Retrieved from http://www.planningplanet.com/guild/gpccar/managing-change-the-owners-perspective Figures 8-14
    2. Sullivan, G. W., Wicks, M. E., &Koelling, C. P.(2014). Engineering economy 16th Edition. Chapter 14 – Decision Making Considering Multiattributes., pp.559-608.
    3. Norris, G. A., & Marshall, H. E. (1995). Multiattribute decision analysis method for evaluating buildings and building systems. National Institute of Standards and Technology.
 

W2_UDS_Choosing Fuel Terminal Location Using Additive Weighting Technique in Multi-Attribute Decision Making

  1. Problem Evaluation

Location of the new Fuel Terminal is one critical factor that determines operational success. Especially in build new fuel terminal, we must consider at least two aspects such as land aspect and sea aspect. The fact is very hard to find the location that has both aspects perfectly. But if we get the best one it has already bought or developed, so we have to choose the optimum location.

  1. Development of feasible alternatives

Choosing the Optimum location is decision making strategy. There are some theories that can help us to find the optimum one, but in this case we use “Additive Weighting Technique” from Compensatory Approach in Multi-Attribute Decision Making. With this technique we can find the best (Optimum) location based on calculation between weighted / rank and scoring of the criteria.

  1. Development the outcome for each alternative

The find the best location by using Additive Weighting Technique, First we have to do is select the criteria of land and sea aspect. Second, we make a weighting of the criteria. Weighting criteria may come from proportional rank of the criteria or expert judgment. Third, we give a number (Likert scale 1-3) in every criteria and time it with the weighting of every criteria. So we can choose the location with the highest score.

  1. Selection of criteria

Summary result of the weighting criteria each alternative as follow :

Table 1. Weighting Land Aspect Criteria

Table 2. Weighting Sea Aspect Criteria

Base on sum result of Table 1 and Table 2, Patra Dok Dumai location gets the highest score.

  1. Analysis and comparison of the alternative

Additive weighting calculation show Patra Dok Dumai location gets higher score in sea aspect criteria but lower score in land aspect criteria. It indicate this location is not the best but the optimum alternative that we have.

  1. Alternative selection

Choose the optimum not the best alternative is not a bad decision. It could be happen as long as they pass minimum requirement of operational success and we already prepare all of the mitigation of the risk.

  1. Performance monitoring & Post Evaluation Result

Even we already have the chosen alternative base on operational aspect also we have to evaluate the alternative base on economic aspect. Maybe in economic view our alternative not feasible to run so must go back to beginning and do this iteration until we get feasible alternative both on operational and economic aspect.

  1. References
    1. Planning Planet. (2017). Multi-Attribute Decision Making. Retrieved from http://www.planningplanet.com/guild/gpccar/managing-change-the-owners-perspective Figures 8-14
    2. Sullivan, G. W., Wicks, M. E., & Koelling, C. P.(2014). Engineering economy 16th Edition. Chapter 14 – Decision Making Considering Multiattributes., pp.559-608.
    3. Norris, G. A., & Marshall, H. E. (1995). Multiattribute decision analysis method for evaluating buildings and building systems. National Institute of Standards and Technology.

 

 

W1_Dhanu_Tuckman Analysis Assessment

  1. Problem Evaluation

There are seven people ,with different head, gender, background, and idea,  was collected in 5 days class training (F2F Phase) from 24 until 28 July 2017. They are called Emerald AACE 2017 Team. They have two goals after this six month preparation course, one is get at least one certification and second is implement what they get in their work life. To rich that goal they have a lot of task that package like a project in next 26 weeks. From their differentiation come many view, idea, step, way in finishing the project. The biggest one is their first blog posting report assignment about Leadership style.

  1. Development of Feasible Alternatives

To fine appropriate leadership style there are some theory has been published, but the best one is Tuckman’s model. This model have five stages of team development and behavior that are Forming, Storming, Norming, Performing, and Adjourning. This model also explains how Team develops maturity and ability, relationships establish, and the leader changes leadership style. Beginning with a directing style, moving through coaching, then participating, finishing delegating and almost detached.

Figure 1. Team Development and Behavior Stage

  1. Development the outcome for each alternative

With Tuckman’s model we can determine where the stage the team is. First we have to distribute questioners with 32 questions to all the team members. After that we use Delphi technique with P75 to analysis the data.

  1. Selection of criteria

Summary result of the survey data using Delphi technique with P75 as follow:

Table 1. Emerald AACE 2017 Team Survey Result

Table 2. Emerald AACE 2017 Team P75 Result with Delphi Technique

Base on Table 2, first rank is performing so Emerald AACE 2017 Team is on Performing Stage.

  1. Analysis and comparison of the alternative

The result of P75 Delphi Technique calculation show there are very little different (less then 1 value) between first second and third rank, its indicate the team members still try to get the role and the form of the Team. In another word they are still in Storming stage.

  1. Alternative selection

Storming is one stage a head of the team cycle and not a bad result. Differentiation among team members doesn’t make them broken or stop them to rich the goals. Leadership style in storming stage is coaching and team building.

  1. Performance monitoring & Post Evaluation Result

Step back and help team members take responsibility for progress towards the goal is strongly recommended for Leader action. Periodically meeting and doing some activity together will make team still in right way rich the goal.

  1. References
  1. (2017). Tuckman Forming Storming Norming Performing Model. Retrieved from http://www.businessballs.com/tuckmanformingstormingnormingperforming.htm
  2. (2017). Forming, Storming, Norming, and Performing – Understanding the Stages of Team Formation. Retrieved from http://www.mindtools.com/pages/article/newLDR_86.htm
  3. Free Management Books. (2017). Retrieved from http://www.free-management-ebooks.com/faqld/development-02.htm
  4. Management Pocket Books. (2017). Retrieved from https://managementpocketbooks.wordpress.com/tag/bruce-tuckman/