Course Information

Statement of purpose. The objective of this course is to develop the skill and the perspective of artfully using quantitative techniques to gain insight into the resolution of practical business problems. Emphasis is not on the mastery of sophisticated mathematical techniques, but rather on designing analyses to fit circumstances and on interpreting results in the context of making action choices. The most widely applicable methodologies of decision and risk analysis, probability and statistics, competitive analysis, and management science are studied and integrated with personal judgment and intuition in realistic business situations.

Objectives

To develop a process for knowing when and how to do managerially relevant analysis under conditions of uncertainty, many decision variables, and unstructured contexts, using both personal judgment and available data.

To develop a framework for understanding uncertainty, a language for describing uncertainty, and methodologies for making decisions in light of uncertainty--all through field case studies about practicing managers.

To provide basic skills in the most widely applicable methodologies of decision and risk analysis, probability and statistics, competitive analysis, and management science.

Grading. Class participation and exams will be weighted as follows:

Participation in section discussions 40%

Midterm Exam (Nov. 8) 25%

Final Exam (March 3) 35%

Class participation is graded for those classes held within your section. Although attendance is required at non-section class meetings, participation in those out-of-section classes will not be graded. The final exam will cover the topics of the entire course. The final exam receives more weight, in part, to reward performance which improves over time. A caveat to the weighting scheme is that an "F" in class participation will limit the student to a course grade of no higher than a "C", so it is imperative that you participate in class, irrespective of your self-perceived level of expertise.

With respect to the first-year program attendance policy, QA will treat the midterm exam as dividing the course into two "semesters".

Outside References. A list of references for supplemental reading is on the reverse side, each of which is available in the Darden Library. Since the course approaches topics from a

pragmatic, decision-oriented perspective, students should, in general, be wary of devoting much time to these texts. Better sources of help include your discussion group, your instructor, and the second-year tutoring program.QA REFERENCE LIST

Bell, D.E., and Schleifer, A. Jr., Decision making under uncertainty, Cambridge, MA, Course Technology, Inc. 1995.

Brightman, H.J., Statistics in plain english. Cincinnati, OH: South-Western Publishing Co., 1986.

Clemen, R.T., Making hard decisions: an introduction to decision analysis. Boston: PWS-Kent Publishing Company, 1991.

Curwin, J. and Slater, R., Numeracy Skills for Business, London: Chapman & Hall, 1994.

Eppen, G.D., F.J. Gould, and C.P. Schmidt, Introductory management science, second edition. Englewood Cliffs, NJ: Prentice-Hall, Inc., 1987.

Freedman, D., R. Pisani, and R. Purves, Statistics. New York: W.W. Norton & Company, Inc., 1978.

Hamburg, M., Statistical analysis for decision making, fourth edition. New York: Harcourt Brace Jovanovich, Publishers, 1987.

Holloway, C.A., Decision making under uncertainty. Englewood Cliffs, NJ: Prentice-Hall, Inc., 1979.

Keeney, R.L., Value-focused thinking: a path to creative decisionmaking. Harvard University Press, 1996.

Kirkwood, C.W., Strategic decision making: multiobjective decision analysis with spreadsheets. Belmont, CA: Duxbury Press, 1997.

Lapin, L.L., Statistics for modern business decisions, second edition. New York: Harcourt Brace Jovanovich, Publishers, 1978.

Plane, D.E., Management science: a spreadsheet approach. Danvers, MA: Boyd & Fraser Publishing, 1994.

Ragsdale, C.T., Spreadsheet modeling and decision analysis: a practical introduction to management science. Cambridge, MA, Course Technology, Inc,. 1995.

QA ASSIGNMENTS - Week 1

Thursday, August 31

Case: Athens Glass Works (UVA-QA-0439, Rev. 7/94)

What price would you recommend?

Friday, September 1

Read: A Note on Decision Diagrams (9-171-035)

Case: Freemark Abbey Winery (9-181-027)

QA ASSIGNMENTS - Week 2

Wednesday, September 6

Case: Freemark Abbey Winery (previously distributed)

Respond to the issues raised during class discussion on Thursday, September 8

Thursday, September 7

Case: George's T-Shirts (UVA-QA-0346)

QA ASSIGNMENTS - Week 3

Wednesday, September 13

Case: Integrated Siting Systems, Inc. (UVA-QA-0441)

Thursday, September 14

Read: Cash Flow and the Time Value of Money (9-177-012)

Prepare: Discounted Cash Flow Exercises (UVA-Q-290, Rev. 9/94)QA ASSIGNMENTS - Week 4

Tuesday, September 19

Read: Cash Flow and the Time Value of Money (9-177-012)

Prepare: Discounted Cash Flow Exercises (UVA-Q-290, Rev. 9/94)

Thursday, September 21

Case: Roadway Construction Company (UVA-QA-0424, Rev. 10/91)

Friday, September 22

Case: Dhahran Roads (A) (UVA-QA-0296, Rev. 8/93)

Note: Evaluate the Dhahran Roads project on its own merits--separate from the SR 4 million loan used to finance it.

QA ASSIGNMENTS - Week 5

Thursday, September 28

Case: Novon Cement Company 9-172-080 Rev. 7/76

Friday, September 29

Case: Galaxy Micro Systems (UVA-QA-0394, rev. 2/93)

What would you recommend to Jansen as a response to the pricing alternatives proposed by the service franchiser?

QA ASSIGNMENTS - Week 6

Thursday, October 5

Case: Galaxy Micro Systems (UVA-QA-0394, rev. 2/93) (previously distributed)

Galaxy Micro Systems Addendum (UVA-QA-0478)

Friday, October 6

Case: Calambra Olive Oil (A) (UVA-QA-0440)

Calambra Olive Oil (B) (UVA-QA-0442)

The spreadsheet described in the (B) case is in the QA directory in the file CALAMBRA.XLS

QA ASSIGNMENTS - Week 7

Thursday, October 12

NOTE TO JUNE: THIS IS AN EXPOSITORY CLASS

SIMULATION MODELING WORKSHOP

No advanced preparation required. If you can, bring your laptop to class.

Friday, October 13

Case: Sprigg Lane (A) (UVA-QA-372, rev 12/88, 10/91)

1. What is your recommendation with respect to the Bailey Prospect?

2. How does the fact that the Bailey Prospect was one in a package of ten wells affect your recommendation?

Note: The spreadsheet model described in Exhibit 1 is in the QA directory in the file, SPRIGG.XLS

Reference: Analytical Probability Distributions (UVA-QA-0437). Please consider this note a reference source rather than required reading.

QA ASSIGNMENTS - Week 18

Tuesday, January 9

Case: C.K. Coolidge, Inc. (A) (9-894-017, Rev 11/94)

Prepare: 1. What should Purcell do? If you recommend a settlement, what terms would you suggest?

Thursday, January 10

Prepare: Amore Frozen Foods (A) (UVA-QA-3l7)

1. If the fill target were lowered to 8.22 ounces and the filling device operates as expected, how many 20-minute batches will fail (due to chance alone) to meet the FDA-approved standard because the five sample pies average less than 8 ounces per pie?

2. Prepare a recommendation for Jenkins regarding lowering the target to 8.22 ounces.

NOTE: The data from case Exhibit 4 are in a worksheet named AMORE in the QA subdirectory on the network.

Friday, January 13

Read: Sampling and Statistical Inference (9-191-092, Rev, 9/93) (Omit the section on Statistical Significance, page 5 and part of 6)

Prepare: National Resources Defense Fund (A) (UVA-QA-0473)

Based only on your individualized sample, prepare a forecast of average gift if NRDF rolls out the Clean Gas appeal to the remaining members.

QA ASSIGNMENT - Week 19

Thursday, January 18

Prepare: Piedmont Airlines: Discount Seat Allocation (A) (UVA-QA-0339 Rev 12/93)

Piedmont Airlines: Discount Seat Allocation (B) (UVA-QA-0340 Rev 1/94)

1. Using the information in the (A) case only, compare the two extreme alternatives of a) making all seats on Flight 224 discount seats or b) allowing none of the seats on Flight 224 to be discount seats.

2. Do the simulation results reported in the (B) case leave you convinced that R = 99 is better than R = 59? What is the probability that R = 99 is better than R = 59?

Note: The spreadsheet described in Exhibit 1 of the (B) case is in the PIEDMONT file in the QA library on the network. It is available for the intellectually curious; it is not necessary for you to use the worksheet to prepare the case.

Friday, January 19

NOTE TO JUNE: THIS IS AN EXPOSITORY CLASS

SAMPLING WORKSHOP

Prepare: Problems in Sampling .

Monday, January 22

Prepare: Specialty Distilled Chemicals Corporation (UVA-QA-0051)

Limit your attention to products 372-3A, 403-C, and 467-26

"STANDARD ERROR" IS THE STANDDARD DEVIATION OF THE INDIVIDUAL OBSERVATIONS DIVIDED BY THE SQUARE ROOT OF THE SAMPLE SIZE.

QA ASSIGNMENT - Week 20

Monday, January 22

EXPOSITORY SESSION

SAMPLING WORKSHOP

Prepare: Problems in Sampling .

Wednesday, January 24

Prepare: Specialty Distilled Chemicals Corporation (UVA-QA-0051)

Limit your attention to products 372-3A, 403-C, and 467-26

"STANDARD ERROR" IS THE STANDARD DEVIATION OF THE INDIVIDUAL OBSERVATIONS DIVIDED BY THE SQUARE ROOT OF THE SAMPLE SIZE.

Thursday, January 25

Reference: Time Series Forecasting (UVA-QA-0438)

(Section II will be helpful, along with the discussion of mean squared error in Section III and seasonality in Section IV.)

Prepare: Wachovia Bank and Trust Company, N.A. (B) (UVA-OM-0664)

Wachovia Bank and Trust Company, N.A. Supplement (UVA-QA-0342)

Questions: 1. Which of the forecasting methods presented in the Supplement would you recommend to forecast weekly volumes? Adjust the smoothing constant "alpha" if needed, to improve Method 3.

2. What is your best estimate of the demand for next week, week 67? What is the uncertainty in your forecast? For the purposes of this question, focus on mean squared error (MSE) as your measure of accuracy.

3. How many part-time hours should Mr. Davis schedule for next week?

Note: The worksheet in Exhibit 1 of the Supplement is contained in the file WACHOVIA.XLS in the QA library on the network.

QA ASSIGNMENT - Week 21

Wednesday, January 31

Thursday, February 1

Prepare: "Hightower Department Stores: Imported Stuffed Animals," (UVA-QA-0268, Rev. 7/93)

Read: "Introduction to Modeling Using Least Squares: (UVA-QA-270, Rev. 6/87). Read up to the section entitled "Measures of Fit"

Friday, February 2

Prepare: "Waite First Securities" (UVA-0453)

Read: "Introduction to Modeling Using Least Squares: (UVA-QA-270, Rev. 6/87).

Assignment: Prepare a briefing for Mr. Gagnon.

Note: Case data are on the network in the QA subdirectory in a file called "WAITE.XLS"

QA ASSIGNMENT - Week 22

Wednesday, February 7

Prepare: Problems in Regression (UVA-QA-0416)

Read: Assumptions Behind the Linear Regression Model (UVA-QA-271)

Using Dummy Variables to Represent Categorical Variables (UVA-QA-330)

Note: Problem set data are available in the QA subdirectory on the network in file REGPROB.XLW.

Thursday, February 8

Prepare: Edgcomb Metals (UVA-OM-0549, Rev. 4/94)

Assignment 1. How do the performances of Williams and Spencer compare?

2. What would you recommend to Alex Tereszcuk?

Note: Case data are available in the QA subdirectory on the network in file EDGCOMB.

QA ASSIGNMENT - Week 23

Wednesday, February 14

Prepare: The Oakland A's (A) (UVA-QA-282, Rev. 7/87)

Supplement to the Oakland A's (A) (UVA-QA-313)

Note: Case data are available in the QA subdirectory on the network in file OAKA.

Thursday, February 15

Prepare: J.L. Hayes & Sons (9-175-061, Rev. 9/75)

Read: Useful Data Transformations (UVA-QA-329)

Note: Case data are available in the QA subdirectory on the network in file JLHAYES.

QA ASSIGNMENT - Week 24

Wednesday, February 21

Prepare: The Oakland A's (B) (UVA-QA-0283, Rev. 9/94)

Assignment 1. Prepare a forecast for the Oakland A's 1981 home attendance.

2. Evaluate the cost to the A's of the two proposed incentive clauses.

Note: Case data are available in the QA subdirectory on the network in file OAKB.

Thursday, February 22

Friday, February 23

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