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VA-TX Credit Card Case

VA-TX Credit Card Case. John F. Kros Assistant Professor of Decision Sciences East Carolina University Christopher M. Keller Visiting Professor Operations and Decision Technology Indiana University. VA-TX Credit Card Case. San Antonio Presentation Background All MBA’s, 1st Case

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VA-TX Credit Card Case

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  1. VA-TX Credit Card Case John F. Kros Assistant Professor of Decision Sciences East Carolina University Christopher M. Keller Visiting Professor Operations and Decision Technology Indiana University

  2. VA-TX Credit Card Case San Antonio Presentation • Background • All MBA’s, 1st Case • Jumpstarts basic quantitative methods • Agenda • Introduction • Example • Conclusion

  3. VA-TX Credit Card Case The Scientific Method • Apparent Issue Increasing credit-card profitability • Inherent Issue Scientific MethodAssumptions  Ambiguity  Opportunity/Risk  Analysis- Best case/Worse Case, Tradeoff Curves, What-If, OR/MS

  4. VA-TX Credit Card Case Case Overview • Student Work • Groups • Written Executive Summary • In Class Presentation • Case Decision Structure • Status Quo • Ad Campaign • Increase Credit Card Limits

  5. VA-TX Credit Card Case Example Nicole’s group estimated that 25% of card holders do not carry a balance from month to month, or the balances they carry are negligible. However, of those customers that hold balances, 95% hold between $100 and $300 a year. VA-TX charges a 15% APR on all credit card balances while their cost of capital is 5% APR. Data shows that default rates are currently about 0.01% for the customer card base and credit limits are set at a maximum of $5000 per customer.

  6. VA-TX Credit Card Case Other Observations • Global Parameter Modeling • Trade-Off versus Recommendation • Validity and Sufficiency of Case Information

  7. VA-TX Credit Card Case Classroom Success Simultaneous sections by different instructors in each semester for the past three years. Students report importance of exemplar work with interactive instructor feedback.

  8. VA-TX Credit Card Case … interviewees are not expected to produce the right answer (although they get bonus credit if they do). Instead, the interviewer wants to observe the interviewees’ thought processes – what assumptions do they make, what questions do they ask, how do they frame the problem, what outside data and facts do they bring to bear on the problem, and how do they go about producing a well-reasoned recommendation. … from a review by Francis D. Tuggle in July-August 2000 Interfaces, p.99 of the book Management Consulting: A Complete Guide to the Industry.

  9. VA-TX Credit Card Case Summary • Apparent Issue • Credit Card Pricing • Inherent Issue • Scientific Method • Implementation and Class Testing

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