W6_TRI_ Paper Topic Compensatory Model

1.      Problem recognition, definition and evaluation

The initial stage of 2,500 words paper is to select the paper topic. The previous analysis was discussing about selecting alternatives using Force Field Analysis and Non Compensatory Model. In order to make a comprehensive analysis, the other decision making tool is applied to evaluate some alternates of paper topics.

2.      Development of the feasible alternatives

There are two interesting topics that have been submitted to Mentor, they are:

Condition 1: There is a need to compare and analyze between country monetary conditions and cost of oil and gas facilities project.

Topic 1: Use CAPM (Capital Asset Pricing Model) to analyze the relationship

Condition 2: Lesson learnt from completed project that was over budget due to external factors (period 2008-2010).

Topic 2:  Create better contingency and include external factors into cost estimation

3.      Development of the outcomes

The Compensatory Model is used to analyze each alternative topic. The outcome will compare the result resulted from Force Field Analysis,  Non Compensatory Model and this Compensatory Model.

4.      Selection of criteria

The criteria or attributes that will be used in choosing the topic using compensatory model are: Complexity, Effort, Benefit, Confidentiality, and Time Consuming. Those are the same attributes used in non-compensatory model in order to get fairness in analysis.

5.      Analysis and Comparison of criteria

The first step in compensatory model is to generate non-dimensional scaling from attributes value to get dimensionless value as shown in table 1.

Table 1. Non Dimensional Scaling for Attributes

 Next, asses the attribute values for each alternative option by using existing data.

 

Table 2. Attribute Value for Alternatives

And then, replace the original (dimension) value in table 2 using dimensionless value from table 1.  

 Table 3. Dimensionless Value for Alternatives

6.      Selection of the preferred alternative

Finally, result of compensatory model from table 3 is as follows:

Alternatives	Total Value
1. CAPM	5.57
2. Contingency	1

It is clearly shown that the first topic is more valuable than second one.

7.      Performance monitoring and post-evaluation of results

The analysis has been conducted using three decision models and pointed out like this summary:

	Decision Tool	Result
1.	Force Field Analysis	CAPM
2.	Non Compensatory Model	CAPM = Contingency
3.	Compensatory Model	CAPM

As result of that, the first topic is suitable and best choice to be worked out as paper topic. From such analysis is presented that applying more than 1 method of decision tool is very important to benchmark the result and give more comprehensive analysis, and will help heading to right decision.

References:

·         Brassard, M. and D. Ritter. (2010). the Memory Jogger (2nd Edition). Canada. GOAL/QPC

·         Goodwin, Paul and George Wright (2004). Decision Analysis for Management Judgement third Edition. England. John Willey & Sons Ltd

·         Sullivan, W.G., Wicks, E. M., & Koelling, C. P. (2011). Engineering Economy, (p.557-p.560)