Managing uncertainty in strategic planning : cases from telecommunication /

Abstract

We have described decision models for the three modules internal to a virtual IP-network provider: Sales, network planning and trading. To coordinate decisions we have taken advantage of the dual solutions from a stochastic program and derived simplified functions or probability distribution that express valuation and costs of resources. Using these functions or values we are able to, locally, anticipate costs imposed on, or value created at, other modules of the organization. Each module is then able to run local versions, or simplifications, of the global optimization problem. We have done this in the setting of a virtual IP-network provider, but the framework is generally applicable to organizations with distributed decision processes. Our implementation of the framework showed some of the potential of the suggested method. However, further work should expand the implementation to a full simulation of all modules interacting over multiple time periods to evaluate the method’s full potential.