Purchasing a CRM System
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 cost. The costs (in millions of $) are shown below for short, medium, and long implementation durations. Use the Excel template Decision Analysis to identify what vendor to select and clearly explain your recommendation.
Decision Alternative
Short
Medium
Long
Delphi, Inc.
$4.00
$5.50
$8.00
CRM International
$6.00
$4.25
$6.50
Murray Analytics
$4.50
$5.00
$7.20
Decision Analysis
Enter the data only in the yellow cells.
This template is designed to allow up to 5 decision alternatives and future events.
Enter names of decision alternatives and future events in the appropriate cells in column A or K and row 7. Prob
Payoff Table
Decision Alternative
Expand existing plant
Build new plant
Future Events
Low Product Demand High Product Demand
$200,000.00
$300,000.00
$100,000.00
$450,000.00
Probability
Opportunity Loss Matrix
Decision Alternative
Expand existing plant
Build new plant
Future Events
Low Product Demand High Product Demand
$0.00
$150,000.00
$100,000.00
$0.00
Maximax Decision
Maximin Decision
Opportunity Loss Decision
Expected Value Decision
EVPI
Build new plant
Expand existing plant
Build new plant
#N/A
#N/A
in column A or K and row 7. Probabilities are optional.
Maximum Minimum
Expected Value
$300,000.00 $200,000.00
$450,000.00 $100,000.00
Maximum Expected Value
Maximum
$150,000.00
$100,000.00
$0.00
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