Week 3: Data-Driven Decision Making for Health Care Administration
Decision Making Under Uncertainty and Sampling Distributions
Most managerial decisions have some elements of uncertainty. For instance, what will actual demand for our services be? Healthcare administration leaders must make appropriate decisions to fulfill the needs of the “would-be of tomorrow” in order to ensure smooth process flows, effective healthcare delivery, and ensure patient quality and safety. While uncertainty enters into the realm of our everyday, it is often difficult to ascribe a clear definition of how it may affect decision making. As it applies to the practice of healthcare administration, uncertainty can introduce unforeseen and unexpected consequences that may negatively affect healthcare delivery. As a current or future healthcare administration leader, understanding and appreciating uncertainty for decision making will contribute to those decisions important for your health services organization.
1. This week, you examine the concept of fuzzy decision making for healthcare administration practice. You also explore implementation of fuzzy decision making when uncertainty exists and practically apply decision making using sampling distribution analyses.
Learning Objectives
Students will:
· Analyze fuzzy decision making for healthcare administration practice
· Evaluate implementation of fuzzy decision making when uncertainty exists
· Apply decision making using sampling distribution analyses
Learning Resources
Note: To access this week’s required library resources, please click on the link to the Course Readings List, found in the Course Materials section of your Syllabus.
Required Readings
Albright, S. C., & Winston, W. L. (2017). Business analytics: Data analysis and decision making (6th ed.). Stamford, CT: Cengage Learning.
Chapter 6, “Decision Making Under Uncertainty”
Chapter 7, “Sampling and Sampling Distributions”
Ekin, T., Kocadagli, O., Bastian, N. D., Fulton, L. V., & Griffin, P. M. (2015). Fuzzy decision making in health systems: A resource allocation model. JEuro Journal on Decision Processes, 1–23. Note: Retrieved from the Walden Library databases.
Required Media
Palisade [PalisadeCorp]. (2014b, January 29). Introduction to PrecisionTree—Palisade webcast [Video file]. Retrieved from https://www.youtube.com/watch?v=p2NQ5aEJSUQ&feature=youtu.be.
Discussion Part
Fuzzy Decision Making
When uncertainty exists, how does one evaluate the universe of possible outcomes?
Unfortunately, there is no one steadfast rule on how to anticipate what a correct decision might be. However, there are a set of tools and practices that healthcare administration leaders can use to help make the best decision possible given data for a particular set of circumstances. One such example is that of fuzzy decision making, wherein a healthcare administration leader attempts to wrap human expertise around a set of guidelines to enhance workflow and performance. While not all circumstances may lend themselves to fuzzy decision making, understanding what these tools are is a useful practice when managing a health services organization.
1. For this Discussion, review the resources for this week. Reflect on the concept of fuzzy decision making for healthcare administration practice. Consider how you, as a current or future healthcare administration leader, may engage in fuzzy decision making for your health services organization.
By Day 3
2. Post a description of how you would define fuzzy decision making for healthcare administration practice. Then, explain how you might implement fuzzy decision making to evaluate decisions when uncertainty exists. Provide an example where fuzzy decision making might be important for your work or life, and explain why. Be specific and provide examples.
By Day 5
Continue the Discussion and respond to your colleagues in one or more of the following ways:
· Ask a probing question, substantiated with additional background information, evidence, or research.
· Share an insight from having read your colleagues’ postings, synthesizing the information to provide new perspectives.
· Offer and support an alternative perspective, using readings from the classroom or from your own research in the Walden Library.
· Validate an idea with your own experience and additional research.
· Make a suggestion based on additional evidence drawn from readings or after synthesizing multiple postings.
· Expand on your colleagues’ postings by providing additional insights or contrasting perspectives based on readings and evidence.
Submission and Grading Information
Grading Criteria
To access your rubric:
Week 3 Discussion Rubric
Post by Day 3 and Respond by Day 5
To participate in this Discussion: Week 3 Discussion
Assignment (APA format 7th ed) 5 pages
Decision Making Under Uncertainty—Biotechnical Engineering
As you have examined this week, healthcare administration leaders are expected to exercise decision making under conditions of uncertainty. Perhaps more so than any other business, healthcare administration leaders face multiple challenges since ineffective business practices might not result in poor performance with their bottom lines and, if not, it might negatively impact patient safety. Understanding how to appropriately exercise decision making under conditions of uncertainty is a useful skill for effective healthcare administration practice.
1. For this Assignment, review the resources for this week, and reflect on how healthcare administration leaders must exercise decision making under conditions of uncertainty. Consider how you might engage in decision making under uncertainty, as you complete the Assignment and the Case study 6.4 275-276 of your course text.
The Case Study
Developing A HELICOPTER Component for the Army
The Ventron Engineering Company has just been awarded a $2 million development contract by U.S Army Aviation Systems Command to develop a blade spar for its Heavy Lift Helicopter program. The blade spar is a metal tube that runs the length of and provides strength to the helicopter blade. Due to the unusual length and size of the Heavy lift Helicopter blade. Ventron is unable to produce a single-piece blade spar of the required dimensions using existing extrusion equipment and material. The engineering department has prepared two alternatives for developing the blade spar.
(1) Section or (2) an improved extrusion process Ventron must decide which process to use. (Backing out of the contract at any point is not an option). This risk report has been prepared by the engineering department. The information from this report is explained next. The sectioning option involves joining several shorter lengths of extruded metal into a blade spar of sufficient length. This work will require extensive testing and rework over 12-months period at a total cost of $1.8 million. Although this process will definitely produce an adequate blade spar, it merely represents an extension of existing technology.
To improve the extrusion process, on the other hand, it will be necessary to perform two steps:
(A) Improve the material used, at a cost of $300,000, and
(B) Modify the extrusion press, at a cost of $960,000. The first step will require six months of work. If both steps are successful, the blade spar will be available at that time, that is a year from now. The engineers estimate that the probabilities of succeeding in steps 1 and 2 are 0.9 and 0.75. respectively. However, if either step is unsuccessful (which will be known only in six months for step 1 and in a year for step 2), Ventron will have no alternative but to switch to the sectioning process-and incur the sectioning cost on top of any costs already incurred.
Development of the blade spar must be completed within 18 months to avoid holding up the rest of the contract. If necessary, the sectioning work can be done on an accelerated basis in a six-month period, but the cost of sectioning will then increase from $1.8 million to $2.4 million. The director of engineering, Dr. Smith, wants to try developing the improved extrusion process. He reasons that this is not only cheaper (if successful) for the current project, but its expected side benefits for future project could be sizeable. Although these side benefits are difficult to gauge, Dr. Smith’s best guess is an additional $2 million. (These side benefits are obtained only if both steps of the modified extrusion process are completed successfully).
(a) Develop a decision tree to maximize Ventron’s EMV. This includes the revenue from this project, the side benefits (if applicable) from an improved extrusion process, and relevant costs. You don’t need to worry about the time value of money, that is, no discounting or net present values are required. Summarize your findings in words in the spreadsheet.
(b) What value of the side benefits would make Ventron indifferent between the two alternatives?
(c) How much would Ventron be willing to pay, right now, for perfect information about both steps of the improved extrusion process? (This information would tell Ventron, right now, the ultimate success or failure outcomes of both steps.)
The Assignment: (5 pages) APA format 7th & Excel
Complete Case Study 6.4 (Developing a Helicopter Component for the Army) on pages 275-276 of your course text.
Note: You will need to use Excel and the textbook add-in, “Precision Tree.”. I couldn’t copy it textbook, Google it, Is there.
Below is the link to get the PrecisionTree add-in from the Decision tools suite from Pallisade to complete the Week 3 Assignment. Click the link on the right of the page for the tools, then click the book. Once you get to the next page, you have to fill out information located on the right of the form to receive the download link. Please note that this download site will only work if you purchased a new text for this course. Additionally, you may need to use a personal email address in order to receive the download successfully.
http://www.cengage.com/cgi-wadsworth/course_products_wp.pl?fid=M20b&product_isbn_issn=9781133629603&template=nelson
Alternatively, you may also download the PrecisionTree software as a Free Trial by accessing the following:
· http://www.palisade.com/precisiontree/
You will need to fill out the information presented and will need to use a personal email address to use the Free Trial provided.
By Day 7
Submit your answers and embedded Excel analysis as a Microsoft Word management report.
Submission and Grading Information
To submit your completed Assignment for review and grading, do the following:
· Please save your Assignment using the naming convention “WK3Assgn+last name+first initial. (extension)” as the name.
· Click the Week 3 Assignment Rubric to review the Grading Criteria for the Assignment.
· Click the Week 3 Assignment link. You will also be able to “View Rubric” for grading criteria from this area.
· Next, from the Attach File area, click on the Browse My Computer button. Find the document you saved as “WK3Assgn+last name+first initial. (extension)” and click Open.
· If applicable: From the Plagiarism Tools area, click the checkbox for I agree to submit my paper(s) to the Global Reference Database.
· Click on the Submit button to complete your submission.
Grading Criteria
To access your rubric:
Week 3 Assignment Rubric
Check Your Assignment Draft for Authenticity
To check your Assignment draft for authenticity:
Submit your Week 3 Assignment draft and review the originality report.
Submit Your Assignment by Day 7
To submit your Assignment: Week 3 Assignmen
