From the discussions in the previous modules along with your work assignments and readings, you have hopefully become very familiar with word cloud sense of computing itself. You have a knowledge of some of their products, activities that they're performing, they're operating environment, and a challenges that they faces as they move forward into a future. In this module we would like to take another step forward in our understanding of value chain management. And focus on our attention how does a value chain decisions really impact overall business operation and business performance, through one more example. As we have learned value chain management takes a comprehensive look at those activities that support in organization as a create, deliver, and capture, value. As it delivers on it's value proposition. It's value proposition is delivered through its products and, or services offerings. Therefore, choosing the right mix of products and, or services is critical. The activities within the value chain play a key role in managing cost and value when developing and offering products and services. A comprehensive look must include many inputs from accounting, marketing, process improvement, and operations management. So let's consider outcomes of WCSC value chain activities as our portfolio of products and services. In this module, we would like to build a decision model to support decisions regarding product retention. Those products to keep in the portfolio, product deletion and elimination, those products to remove, and, or new development. And those are products that maybe should be re-positioned or engage in new product development activities. The case study provides lots of valuable information, but just as in any real situation, that would be a number of other assumptions that you must make, and what are those key assumptions? And what may be factors that should be used or implemented in placed into your decision model? These factors may either be quantitative or qualitative as pointed out in the case. For example, return our invested capital otherwise, see as one variable. And other variables may be qualitative, such as trade decisions. And some of the key decisions factors that we hope to consider in this decision model would include the number of units sold, cost of sale, trade spending, fixed costs, and many other factors. And these factors encapsulate the key activity areas discussed in the generic value chain model. So, let's consider an illustrative example of how we might conduct this analysis using this snapshot data sheet from the appendices in the case study. It shows the cost profile data for four products during a three year timeline. 2011, 2012, and 2013. We would like to make a decision of the retention, deletion, or improvement for a group of four products. If we are considering a quantitative measure, such as ROIC, as a single decision factor, meaning an ROIC greater than the cost of capital, it will all retain projects one and product four. However, if we take a closer look at product two, we see the uni sales are growing, it has increased each year from 2011 to 2013. We see that for product one sales are decreasing. So the question become is this are trend that will grow in the future, or is this just a small change in the market dynamics now. So just only looking at a quantitative measure only your consideration who have the situation where we might limit our view and not optimize our value chain decisions. So how can we consider some of these assumptions along with including both quantitative as well as qualitative metrics? So to practice this learning in this module, we will build a decision model. So use the data in the content of the case study to support your decisions. Provide detail and rationale for your assumptions that you are making. And additionally, please see the course site for more details about the assignment. Thank you and see you soon. [SOUND]
