Analysis of Strategic Decisions

Stochastic network techniques—VERT, in particular—are “naturals” for analysis of strategic decisions. We have seen that VERT-3 can analyze alternative courses of action in advance by incorporating various relationships and probabilistic data and can generate stochastic output information in terms of performance, costs, time, and risks. While each of the problems examined thus far—development of the Z-car, the plant investment decision, the new-product development problem, decision trees, and the alternative energy sources analysis—could be viewed from a strategic perspective, certain decisions are perhaps more “strategic” in nature. Such decisions would pertain to mergers and acquisitions, diversification, business unit analysis, industry analyses, product life-cycle considerations, scenario analysis, and other situations.