Continuous Improvement Toolkit Decision Tree Continuous Improvement - - PowerPoint PPT Presentation

Continuous Improvement Toolkit . www.citoolkit.com

Continuous Improvement Toolkit

Decision Tree

Continuous Improvement Toolkit . www.citoolkit.com

Check Sheets

Data Collection

Affinity Diagram

Designing & Analyzing Processes

Process Mapping Flowcharting Flow Process Chart 5S Value Stream Mapping Control Charts Value Analysis Tree Diagram**

Understanding Performance

Capability Indices Cost of Quality Fishbone Diagram Design of Experiments

Identifying & Implementing Solutions***

How-How Diagram

Creating Ideas**

Brainstorming Attribute Analysis Mind Mapping*

Deciding & Selecting

Decision Tree Force Field Analysis Importance-Urgency Mapping Voting

Planning & Project Management*

Activity Diagram PERT/CPM Gantt Chart Mistake Proofing Kaizen SMED RACI Matrix

Managing Risk

FMEA PDPC RAID Logs Observations Interviews

Understanding Cause & Effect

MSA Pareto Analysis Surveys IDEF0 5 Whys Nominal Group Technique Pugh Matrix Kano Analysis KPIs Lean Measures Cost -Benefit Analysis Wastes Analysis Fault Tree Analysis Relations Mapping* Sampling Benchmarking Visioning Cause & Effect Matrix Descriptive Statistics Confidence Intervals Correlation Scatter Plot Matrix Diagram SIPOC Prioritization Matrix Project Charter Stakeholders Analysis Critical-to Tree Paired Comparison Roadmaps Focus groups QFD Graphical Analysis Probability Distributions Lateral Thinking Hypothesis Testing OEE Pull Systems JIT Work Balancing Visual Management Ergonomics Reliability Analysis Standard work SCAMPER*** Flow Time Value Map Measles Charts Analogy ANOVA Bottleneck Analysis Traffic Light Assessment TPN Analysis Pros and Cons PEST Critical Incident Technique Photography Risk Assessment* TRIZ*** Automation Simulation Break-even Analysis Service Blueprints PDCA Process Redesign Regression Run Charts RTY TPM Control Planning Chi-Square Test Multi-Vari Charts SWOT Gap Analysis Hoshin Kanri

Continuous Improvement Toolkit . www.citoolkit.com

 The aim is to identify those actions which will give the best

results.

 It enables a thorough mapping of all decisions and their possible

• utcomes .

 Originated in financial and marketing,

although it can be used for many

• ther situations.

 Valuable for evaluation different capacity

expansion alternatives when demand is uncertain and sequential decisions are involved.

• Decision Tree

Continuous Improvement Toolkit . www.citoolkit.com

Used to:

 Help you make choices between different paths and outcomes.  Select from a number of possible actions.  Make important or complex decisions.  Identify the effects of actions or risks.  Help you make all kinds of

business decisions, such as:

• New product development.
• New marketing strategies.
• Workforce changes.
• Decision Tree

Continuous Improvement Toolkit . www.citoolkit.com

Approach:

 Start with the decision that you need to make.  Then draw out lines for each possible action/decision.  At the end of each line consider:

• A condition (uncertain).
• A result / a decision (certain).

 Keep doing this until you are

confident you have identified as many of the possible outcomes leading from the original decisions.

• Decision Tree

Continuous Improvement Toolkit . www.citoolkit.com

Example: Decide whether a person should be offered a loan

• Decision Tree

Black listed?

> 50,000 =< 50,000 No Yes

Income Range of Applicant Loan No Loan Years in present job

Less than 2

No Loan Loan

2 years or more

Offer a loan?

Continuous Improvement Toolkit . www.citoolkit.com

• Decision Tree

No Loan Loan No Loan Loan Decisions Uncertain outcomes Or external event

Provide a Loan?

Continuous Improvement Toolkit . www.citoolkit.com

Example: When to buy?

• Decision Tree

Event / Event (Cost)

Cost 1: Item cost =< $1 Cost 2: Item cost > $1

1: Level stock =< 100

Buy 200 Buy 100

2: Level stock >100

Buy 100 Search alternatives Level stock =< 100

Buy 200 Buy 100 Buy 100 Search alternatives

Buy?

Level stock >100 Item cost =< $1 Item cost > $1 Item cost =< $1 Item cost > $1

Continuous Improvement Toolkit . www.citoolkit.com

Example: Return on advertisement campaign

• Decision Tree

Action / Event

E1 (0.7): Rising market E2 (0.3): Falling market

A1: Prime-time spread

24K 8K

A2: Targeted sectors

18K 17K

A3: Low-level

14K 22K A1 A2 A3 E1 (0.7) E2 (0.3)

24K 8K 18K 17K 14K 22K

How to advertise?

E1 (0.7) E2 (0.3) E1 (0.7) E2 (0.3)

Continuous Improvement Toolkit . www.citoolkit.com

Example - What Product to Produce?

• Decision Tree

Market survey? Which Product?

25K 10K 33K 22K 20K 5K 28K 17K

Favorable market (0.7) Unfavorable market (0.3) Favorable market (0.7) Unfavorable market (0.3) Favorable market (0.9) Unfavorable market (0.1) Favorable market (0.9) Unfavorable market (0.1)

2nd Decision Point 1st Decision Point

20,500 29,700 18,500 26,900