20121012102332Sample Assignment Answer

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FACULTY OF SCIENCE AND TECHNOLOGY

SEMESTER MAY 2012

SBFS1103

THINKING SKILLS AND PROBLEM SOLVING

MATRICULATION NO :

IDENTITY CARD NO. :

TELEPHONE NO. :

E-MAIL :

LEARNING CENTRE :


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TABLE OF CONTENTS

1. INTRODUCTION ..................................................................................................... 2

Figure 1 Stepwise Conception. .................................................................................. 4

2. IDENTIFICATION OF APPROPRIATE DECISION MAKING TOOL. ............................... 5

2.1 Benchmarking. .................................................................................................... 5

Figure 2 Benchmarking Results. ................................................................................ 6

2.2 Decision Tree .................................................................................................... 7

Figure 3 Decision Tree Illustrations . ........................................................................ 7

2.3 SWOT Analysis. ................................................................................................. 9

Figure 4 SWOT Analysis Illustration 1 . ................................................................... 9

Figure 5 SWOT Analysis Illustration 2 . ................................................................. 10

2.4 Definition and explanations of SWOT analysis ............................................... 11

3. HOW TO DERIVE TO THE CHOICE OF SUB-CONTRACTOR. ..................................... 11

Figure 6 Gantt Chart Lai Hock Builders .................................................................. 11

3.1 Gantt Chart ....................................................................................................... 13

3.2 Time Factor - Explanation ............................................................................... 14

4. PROFIT MARGIN CALCULATION AND COST DOWN ACTIVITIES. ........................... 15

Figure 7 Profit and Loss Statement of Lai Hock Builders .................................... 15

4.1 Cost Down Activities ....................................................................................... 16

a) Reduce Indirect Costs ............................................................................. 16

b) Out Source Jobs ...................................................................................... 16

b) Safe Working Procedures.................................................................... 16

5. CONCLUSION ......................................................................................................... 17

6. REFERENCES .......................................................................................................... 18


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1.0 INTRODUCTION

Humans are often burdened with life questions which require answers to be decidedby a decision. The decision must be made on about love, work, home, children's

education, career and common things such as what to eat and what clothes I wear.

Sometimes, this decision is easily made in just a blink of the eye only. Sometimes

we will be sleepless thinking about what things should be done to overcome the

problems ahead moreover if it involves money or love.

How can we define Decision making? Decision making can be defined as mental

process that involves a person is acting to select a choice from several options

available based on the purpose and specific criteria. Of course we want to avoid the

adverse decision. Therefore, we are not able to think in a hurry. We need to use the

resource-based information and to consider various options to find the best options.

So you need a rational, patient, think long and deep so that the decisions you make is

accurate, permanent, and final, without any doubt and loss.

Forgarty Robin James Bellanca (1990) Teach Them Thinking categorize thinking

skills as critical thinking, decision making and defines it as "making a choice based

on reasoned judgment". They give a synonymous word "decision making" with

"judging, choosing, and selecting".

The decision refers to the choice made by the various alternatives available. Choices

is a function of the objectives of decision makers today, then in the assessment of

alternatives to choose from, the makers are also interested to know the result of the

action, as a result of choices made. Choice also involves elements of uncertainty.

Decision-making process is the most important process to perfection in the field of

management for all organizations.


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Decision-making process not only in management but there is also faced by each

individual, the decision about yourself, your family, at home and at work.

Sometimes our lives can be felt consists of thousands of decisions, both large and

small. The issue that we are going to identify discusses and justify among two

shortlisted contractors with from different companies where the construction job that

to be offered to.

We have to identify a proper problem or issue using identifying tools as so that to

enable us to verify it and conceptualized problem. There are various types of

mapping tools used in system dynamics of conceptualization processes such as

hybrid diagram, stock and flow diagram, sector diagram finally policy structured

diagram as classified by Luna-Reyes Luis F (2003). Figure 1 elaborates sector

diagram that relates the matters and target of work related to the whole project of

construction.


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FIGURE 1: STEPWISE CONCEPTION PROCESS


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2.0 IDENTIFICATION OF THE APPROPRIATE DECISION MAKING TOOL

Problem solving and decision making tools are basically is same although the time

and technology has changed. Maybe the technicality has been modified to suite the

application to be computerized or available in soft wares. Normally problems solving

tools are used in complicated situation where some common and complex tools such

as benchmarking, Decision Tree, Cause and effect diagrams, flow charts, and SWOT

analysis and prioritization matrix used. (Kanthilal, Dr. Haresh Kumar, Espira, Dr.

Anton, OUM Thinking Skill and Problem Solving, 2008) The tools that we are going

to use for problem solving for Lai Hock Builders are:

i) Benchmarking.ii) Decision Treeiii)SWOT Analysis.

2.1 Benchmarking

The motive of benchmarking is to verify internal and external organizations

continuous improve performance and based to the knowledge received. (Bennett,

Catherine D 2004) Benchmarking is the process of comparing one's businessprocesses and performance matrix to industry outstanding practices from other

companies where measurement done conventionally based to the quality, time and

cost.

In the process of benchmarking, management identifies the best in their management

as compared to, another company with the same kind of processes, and by comparing

the results and processes of those evaluated to the present results and processes. In

this way, they learn how well the targets perform and, more importantly, the business

processes that explain in Wikipedia, articles on Benchmarking explain why these

firms are successful.
http://en.wikipedia.org/wiki/Performance_metrichttp://en.wikipedia.org/wiki/Performance_metric


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No. Targets Raymond Ooi Ghulam Rasool

1 Determine weaknesses Have interviews to get second

opinions.

Interview the staffs to getinformation.

2 Benchmark team result

Form team to performpersonnel auditing.

Investigate the customers whohave used the builder.

3 Brainstorm potential (voting)

Organize voting strategy toaccomplish results.

Have cause and effect analysiswithin group members.

4a Information gathered

Having the informationgathered to derive final

conclusion.

Plot all the information to createa graph or trend for better

image.

4b Information from 3rd

party consultant This will be the final test mark

to evaluate the candidate

particulars.

5 Benchmark result

Final results will be clarified to move

on to the next move.

Select

FIGURE 2: BENCHMARK RESULTS


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FIGURE 3: DECISION TREE


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2.2 Decision Tree

Decision trees can be defined as a tool that could help to analyze to identify a strategy

that could target on goal achieving. It is also call a model algorithm paralleled by a

probability model to take on decisions although there is an incomplete knowledge

available. According to Wikipedia article on Decision Tree, elaborates that it is a

descriptive model to justify the probabilities. Further to that it has been explained, in

some activities where assets and risks are sequential but linked to each other also can

derive conclusions by plotting to a decision tree as suggested in the journal

probabilistic.

The above quoted tree drawing explains on how Lai Hock Builders will gain profit by

offering to the lower tender and higher tender to his sub- contractors for partial of his

main jobs. Eventually if we could see, the visual profit on papers is when Lai Hock

Builders offer his tender to sub-contractor Raymond Ooi where the final balance from

the initial contract value is about RM260 to continue with his rest of his work. It is

also similar to sub-contractor Ghulam Rasool been offered and will get a balance cash

of RM 290,000 in hand where Lai Hock Builders has to complete the rest of his jobs.

With the cash in hand of RM 260,000 if Raymond Ooi is proceeding with the jobswith some final jobs on hold, Lai Hock Builders must find other solutions of cost

down to enable them to go for higher profit. Whereas if Ghulam Rasool selected for

his sub-contract jobs , then Lai Hock Builders will retain cash of RM290,000 in hand

to proceed with other final jobs. Although there is a big cash difference between

Raymond Ooi and Ghulam Rasools contract offering but the matter here is only time.

Time constraint plays a very important role as the difference of forty five days will

between Raymond Ooi and Ghulam Rasool can give a big impact to Lai Hock

Builders in business line especially matters line such as reputation concern, new

business venture and also investment of labours. We can clearly elaborate these facts

in the following articles to stress onto itemized job task, material usage and other

construction related aspects.


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2.3 SWOT Analysis

FIGURE 5: SWOT ANALYSIS SUB- CONTRACTOR - GHULAM RASOOL

FIGURE 4: SWOT ANALYSIS SUB- CONTRACTOR - RAYMOND OOI

IN

T

E

R

N

A

L

F

A

CT

O

R

S

POSITIVE NEGATIVE

STRENGTHS WEAKNESSES

Technical Skills Leading Contractor Distribution Channels Customer Loyalty and

relationship Finished Quality Management Skill

Absence of important skills New Contractor Poor access to distribution Low customer retraction Unreliable finishing quality

Lacks Management SkillE

X

T

E

R

N

A

L

F

A

C

T

O

R

S

POSITIVE NEGATIVE

OPPORTUNITIES TREATS

Changing in customer desire Technology Advance Changes in governmental

policies Cheaper material Change in plan or structure New Distribution Channel

Changing in customer desire Technological Advance Change in governmental policies Price increase in material Change in plan or structure New Distribution channels


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FIGURE 5: SWOT ANALYSIS SUB- CONTRACTORGHULAM RASOOL

I

N

T

ER

N

A

L

F

A

C

T

O

RS

POSITIVE NEGATIVE

STRENGTHS WEAKNESSES

Technical Skills Leading Contractor Distribution Channels Customer Loyalty and

relationship Finished Quality

Management Skill

Absence of important skillsNew ContractorPoor access to distribution

Low customer retraction Unreliable finishing quality

Lacks Management Skill

E

X

T

E

R

N

A

L

F

A

C

T

O

R

S

POSITIVE NEGATIVE

OPPORTUNITIES TREATS

Changing in customer desire Technology Advance Changes in governmental

policies Cheaper material Change in plan or structure New Distribution Channel

Changing in customer desire Technological Advance Change in governmental policies Price increase in material Change in plan or structure New Distribution channels


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2.4 SWOT analysis can be defined as a method to enhance strategic planning as to

assess the Strengths, Weaknesses or Limitations, Opportunities and Threats

complicated in a mission or in a professional project as illustrated in Figure 4 and 5.It involves specifying the objective of the business risk in finding the internal and

external influences that are satisfactory and unsatisfactory to accomplish that purpose

according to the Wikipedia, SWOT analysis.

SWOT analysis to proceed after setting the target and objective as to the concern of

the organization where the actual meanings as follows:

a) Strengths are defined as the features of the business that contribute anadvantage upon the others.

b) Weaknesses (or Limitations) are descriptions that place the group at aweakness comparative to others.

c) Opportunities are the exterior chances to advance operation as to make largerprofits comply with the environment.

d) Threats are the exterior features in the environment that could cause problemfor the business or project.

3. 0 HOW TO DERIVE THE CHOICE OF SUB-CONTRACTOR

FIGURE 6: Contract Schedule Table - Gantt chart

No Task Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

1 Contract writing

Anil Kumar

(Owner)

2 Contract signing

Anil Kumar

(Owner)

3 Secure Financing


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No Task

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

4 Obtain Permits

Anil Kumar

(Owner)

Agreed

Construction

duration

5 Site Work

(Construction)

Lai Hock Builders

Raymond Ooi

Ghulam Rasool

6 Plumbing

Lai Hock Builders

Raymond Ooi

Action: Ghulam

Rasool

7 Electrical

Lai Hock Builders

Raymond Ooi

Ghulam Rasool

8 Roof

Lai Hock Builders

Raymond Ooi

Ghulam Rasool

9 Inspection for CF

DBKL

10 Move In

Anil Kumar

a b c

Penalty Durations

d


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3.1 Gantt chart

A Gantt chart is a horizontal bar chart known as a production control tool founded by

and American engineer and social scientist namely Henry L. Gantt. This Gantt chart

is very often used in project management with graphical explanations of task and

schedule, planning, coordination as to monitor the motive of a project.

A Gantt chart also explains a project schedule when it starts and ends with target

date, events, project summary, and also breakdown of work structure with the

percentage of job done and many other things that relates to the main task of the work

planned and update as it goes on.

As to the explanation of the Gantt chart above in Figure 6, it has been elaborated in a

breakdown of task of the types of jobs to be carried out by the contractors. As we

have derived here and plotted the main contract builder as well as the sub-contractor

builder to specify and illustrate their job task as if they were carrying out this project.

It has been explained earlier that the objective of Lai Hock builder is to reduce cost

without ruin his reputation as classed builder and to sub a certain part of construction

to a relevant contractor as to ease his burden of completion the project. The chart

explains that a is the actual target agreed between Anil Kumar and Lai Hock Builders,

b is the 10% delay if offered to Raymond Ooi, e is the target of completion delayed

about 50% is offered to Ghulam Rasool. If we can note here time is the most

important factor although both sub-contractors are relevant and capable of completing

the job. The difference of price can contribute a RM30, 000 cheaper if job offered to


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Ghulam Rasool but when comes to time constrain it delays about two and half months

that will be 75 days in figure.

3.2 Time Factor

The time value of money is the value of money assuming in a given amount of benefit

received over a specified amount of time. The time value of money is the

fundamental perception in finance philosophy. The time value of money means for

every minute of delay its cost the bank interest, penalty for delay, overhead expenses

and labour costs. Completion of project earlier 45 days if offered to the experience

contractor will enable to build up good reputation, recommendation from the

customer Anil Kumar to his fellow friends and family members in KL regarding the

efficiency of Lai Hock Builders and also Lai Hock Builders can move forward

utilizing the 45 days in advance to new building contract. As mentioned in Figure 6

Gantt chart, a is the initial agreed time line of completion of project, b is the time

line of completion if offered to sub-contractor Raymond Ooi and c and d are

completion and moving in time line if offered to Ghulam Rasool.


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4.0 PROFIT MARGIN CALCULATION AND COST DOWN ACTIVITIES

FIGURE 7: Profit and Loss Summary of LAI HOCK BUIDERS

No Items Formula

LAI

HOCK

Builders

Raymond

Ooi

Sub- Con Actual Budget Difference

1 Agreed Contract Value A 260,000 240,000 500,000 500,000 0

2 Direct Cost

3 Fixed Labour cost 44,600 60,200 104,800 100,000 -4,800

4 Construction materials 25,000 60,000 85,000 90,000 5,000

5 Piling 7,000 7,000 5,000 -2,000

6 Mansonary works and tiles 30,000 30,000 35,000 5,000

7 Carpentry works 18,000 18,000 20,000 2,000

8 Plumbings and fittings 12,000 12,000 15,000 3,000

9Electrical installations andfittings 28,000 28,000 30,000 2,000

10 Security system 4,500 4,500 5,000 500

11 Metal structure 7,500 7,500 7,000 -500

Sub-Total (Direct Expenses) B 162,100 134,700 296,800 307,000 10,200

12 Indirect Cost

13 Labour Overtime 15,000 20,000 35,000 30,000 -5,00014 Insurance 25,000 25,000 30,000 5,000

15 Claims 4,000 5,000 9,000 10,000 1,000

16 Transport 5,000 12,000 17,000 20,000 3,000

17 Professional Expense 3,500 3,500 3,500 0

18Repair, MaintenanceExpense 1,000 2,000 3,000 500 -2,500

19 Rental of Others 15,000 15,000 12,000 -3,000

20 Electricity Water 1,000 1,000 2,000 1,000

21 House-Rent Expense 3,000 3,000 3,000 0

22 Penalty for delay 15,000 15,000 20,000 5,000

Sub-Total (IndirectExpenses) C 54,500 72,000 126,500 131,000 4,500

Total Expenses Direct +

Indirect B+C 216,600 206,700 423,300 438,000 14,700

23 Gross Profit/Loss

D=(A-

(B+C) 43,400 33,300 76,700 62,000 -14,700

24 Administrative Expenses E 2,000 2,000 5,000 3,000

25 Net Profit/Loss D-E 41,400 33,300 74,700 57,000 -17,700


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4.1 Cost Down Activities

As to bring down operations cost so that can enable Lai Hock Builders go gain profit

from the project such as:a) Reduce Indirect Costs

i) Lai Hock Builder can put in more effort to bring down the indirect costs such

as Indirect Overtime by putting in restriction to the workers not to carry out

unnecessary overtime works beyond the actual working hours.

ii) Can introduce two shift systems as the first group will be working from

7:00am till 3:00pm and the 2nd

group will be working from 11:00am to

7:00pm as they can overlap their works without proceeding with overtime.

b) Out-source jobs

i) Outsource skilled jobs such as masonry and tiles work as to reduce burden ofdaily pay basis as it will be expensive as to their special skill. Jobs like this can

be outsourced with terms of completion and can stop dragging of work of in

house workers who drags work as to accumulate the workmanship.

ii) Even jobs like plumbing and electrical jobs also can be outsourced to reduce theimpact of high expenditures from domestic workers.

iii) Subsidiary jobs as above and lot more can be done separately instead of given asturnkey project.

c) Safe Working Procedures

Both the building main contractor and sub-contractor need to practice a good safety

and health work procedures as they could avoid unwanted accidents that will force

claims, medical leaves and loss time injury that might effects the task of completion

of the project.


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5.0 CONCLUSIONS

Decisions are made from the choices of selection that could be optional to justify

either positively or negatively or to consider the others. To enable an effective

decision, we have to study at various aspects and formula before we come back with a

firm result neither than to regret later after decision.

In the cases of this assignment it is quite complicating because the decision will affect

both parties as the situation is not normal. If there were no delay in the completion

task then the selection job will be very much easier as we could select the cheapest

and complete the job.

We have derived all the feasible method of decision making where the final

conclusion such as stepwise conceptions, benchmark, decision tree, SWOT analysis

and Gantt chart is used as the tool. It was a bit too much to use many kinds of tools

for evaluation but as for a satisfaction we elaborate the problems in all aspects to

make precisely a positive decision.

The building referred in this assignment belongs to Mr. Anil Kumar who is basically acharter accountant who is more toward accounts and monitory consultation.

Psychologically account dealing personals will be very much stringent with all the

input and output in terms of monitory concern furthermore will get emotion if things

are not to their expectations especially in cases of delayed jobs particularly.

Intelligently we have to play save although the time factor was too complicated and

has to commit with further penalty charges , the turmoil of the whole project. As to

this topic of discussion we are not in the position not to give a trial for Ghulam Rasool

contractor where this is not time to take a very high risk, simply to get a big return. It

might give either positive or negative result but is no way for us to make any

immediate remedy if mistakes found.


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We can give a trial for first timer Ghulam Rasool if there are projects in future where

there is no rush for the lead time for completion of the project.

Decision making is a process of planned movement to administrative, cost-effective,

and social life. Decision making is also a crucial module of time organization

assistances that can manage excellently hence in making decisions as explained in the

BusinessWeek magazine on decision making process.

(Three thousand and Thirteen Words)

REFERENCES

http://bx.businessweek.com/decision-making-process-dmp accessed on 09/06/2012

http://www.businessdictionary.com/definition/decision-making.html, accessed on09/07/2012

Catherine D. Bennett, CPCU, ARM Cost Control Concepts, Inc. (2004).

Forgarty Robin James Bellanca (1990) Teach Them Thinking

http://people.stern.nyu.edu/adamodar/pdfiles/papers/probabilistic.pdf accessed on

09/06/2012.

http://searchsoftwarequality.techtarget.com/definition/Gantt-chart accessed on10/06/2012.

Luis F. Luna-Reyes (2003) citing website,http://www.systemdynamics.org/conferencepdf Model Conceptualization: a Critical review accessed on 09/06/2012.

http://en.wikipedia.org/wiki/Benchmarking accessed on 06/06/2012

http://en.wikipedia.org/wiki/Decision_tree accessed on 07/06/12

http://en.wikipedia.org/wiki/SWOT_analysis accessed on 11/06/12.

Kanthilal, Dr. Haresh Kumar, Espira, Dr. Anton, OUM Thinking Skill and ProblemSolving, 2008
http://bx.businessweek.com/decision-making-process-dmphttp://www.businessdictionary.com/definition/decision-making.htmlhttp://people.stern.nyu.edu/adamodar/pdfiles/papers/probabilistic.pdfhttp://searchsoftwarequality.techtarget.com/definition/Gantt-charthttp://en.wikipedia.org/wiki/Benchmarkinghttp://en.wikipedia.org/wiki/Decision_treehttp://en.wikipedia.org/wiki/SWOT_analysis%20accessed%20on%2011/06/12http://en.wikipedia.org/wiki/SWOT_analysis%20accessed%20on%2011/06/12http://en.wikipedia.org/wiki/Decision_treehttp://en.wikipedia.org/wiki/Benchmarkinghttp://searchsoftwarequality.techtarget.com/definition/Gantt-charthttp://people.stern.nyu.edu/adamodar/pdfiles/papers/probabilistic.pdfhttp://www.businessdictionary.com/definition/decision-making.htmlhttp://bx.businessweek.com/decision-making-process-dmp

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