Build a decision tree to decide if your project team should develop an application that will allow users to readily access their accounting spreadsheets, or if this effort should be outsourced to a contractor.
Build a decision tree to decide if your project team should develop an application that will allow users to readily access their accounting spreadsheets, or if this effort should be outsourced to a contractor. The requirements were not completed accurately during the requirements gathering for this project; therefore, there is a risk that the final product will not pass customer acceptance testing. Although doing the project in-house will be expensive, the chances of user acceptance are high, thus preventing costly rework.
Use the information in the table below to decide whether you should build the application in-house or outsource it. Pick the decision with the lower investment required.
Create a decision tree to show outcomes for each decision node using the SilverDecisions websiteLinks to an external site.. Note: While the SilverDecisions tool is intuitive, you can find a manual hereLinks to an external site..
Calculate the expected value of each outcome and show your calculations (Probability x Impact).
Export your decision tree as a .png file and save it on your computer.
Explain the best option based on the outcome and why.
Cost to build application in-house $95,000
Cost to outsource the task of developing the application $80,000
Probability of passing user acceptance testing if built in-house 90%
Probability of passing user acceptance testing if work is outsourced 30%
Cost of rework after user acceptance testing if built in-house $50,000
Cost of rework after user acceptance testing if work is outsourced $25,000
Be sure to properly organize your writing and include a cover page, an introduction, headings/subheadings for the body of your work, analysis, and recommendations, a conclusion, an appendix, and a list of references. Consult this assignment templateLinks to an external site. for a more complete list of requirements.
Solved by verified expertExpertise: Does the project team have the necessary expertise to develop the application?
Resources: Does the project team have the necessary resources (e.g., time, money, personnel) to develop the application?
Cost: What is the estimated cost of developing the application in-house versus outsourcing it to a contractor?
Timeline: What is the timeline for completing the project, and how does this compare to the project team’s availability and the contractor’s availability?
Based on these factors, we can create the following decision tree:
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Should we develop the application in-house or outsource it to a contractor?
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Develop in-house Outsource
/ | \ / \
/ | \ / \
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Expertise Resources Cost Timeline Cost
/ \ / \ / \ / \ / \
/ \ / \ / \ / \ / \
Outsource Develop in-house Outsource Develop in-house Outsource Develop in-house
Starting at the top of the tree, the first factor to consider is whether the project team has the necessary expertise to develop the application. If the answer is no, the decision tree recommends outsourcing the project. If the team does have the necessary expertise, the next factor to consider is whether they have the necessary resources to complete the project. If the answer is no, the decision tree recommends outsourcing the project.
If the team has both the necessary expertise and resources, the next factor to consider is the cost. If outsourcing is more expensive than developing in-house, the decision tree recommends developing in-house. If outsourcing is less expensive, the tree recommends outsourcing.
If cost is not a deciding factor, the next factor to consider is timeline. If the project needs to be completed quickly and the contractor is available to start immediately, the decision tree recommends outsourcing. If the team has the time to complete the project themselves, the tree recommends developing in-house.
If the timeline is not a deciding factor, the final factor to consider is cost again. If outsourcing is less expensive, the tree recommends outsourcing. If developing in-house is less expensive, the tree recommends developing in-house.
