BUSN603

50 words agree or disagree to each question

Q1Linear programming is a tool used to mathematically determine outcomes. By understanding what the end result one is looking to decipher, the focus can then be placed on the limits or constraints will be to feed the equation. When a production manager proclaims due to uncertainties the LP function is useless in manufacturing world, the case more becomes of a true understand of what LP can provide. By setting out on objective to learn from the production manager can anticipate and calculate for the “uncertainties” of the fabrication line. Knowing the inputs that lead to a completed product and introducing constraints that further change the course of the end-result is precisely what linear programming is used for. 

         Establishing an objective of cost-to-print, for instance, allows the LP user to introduce many uncertain variables into the formula. Along with fixed firm prices such as man hours, insurance, and bulk purchased materials, there are also unexpected variables to introduce.  For instance, your man hours may be impacted by sick employees. A task that takes 3 employees 6 hours, is now impacted with the loss of one employee. LP is designed to interpret these types of changes and is able to account for the unexpected changes. A data point would still be calculated and fed into the overall cost-to-print result you are looking for. These nuanced approaches to LP is where margins are analyzed and adjusted to suit the industry attempting to take advantage of the information.

Q2     It seems as if all of the posts made so far are in disagreement with the production manager. I’d like to attempt to argue the opposite in defense of the production manager.

According to Render, Stair, Hanna & Hale (2017), one of the requirements for LP is to “assume that conditions of certainty exist: that is, numbers in the objective and constraints are known with certainty and do not change during the period being studied” (p. 256). Although I’m not completely familiar with the manufacturing process and don’t want to get into any specifics of a company, I do have a specific company in mind for this example. If the company operates on a short run of custom products produced by cutting various metals with lasers, the production manager will likely not run a production long enough to meet the criteria required for the studies to be applicable.

If five products are to be produced to fill a customer order, the implementation of LP to improve this process isn’t viable. Each time a production run is performed, the cost of both materials and labor will change, but those variables can be used to determine the selling price required to maximize profits. In this example, the products produced are not produced elsewhere, so the business model relies on inefficient production runs, and charges accordingly.

This production manager may be in a similar situation, where the profitability of the business is based on inefficient production with a high profit margin. Due to the small production runs, the production never meets the threshold to perform studies, and due to the profitability, a product is never declined.

In opposition to my substantiation to the claims, there are areas where LP may better estimate the cost of labor and materials for estimating bids; however, in this scenario, the cost for labor and materials are fairly insignificant in comparison to the markup. And while this may impact the objectiveportion of the formula, the condition portion of the formula will remain unknown.

Thanks,

Rich

References:

Powell, S. G. & Baker, K. R. (2009). Management science: The art of modeling with spreadsheets (3rd Ed). Hoboken: NJ, Wiley 

Render, B., Stair, R. M., Hanna, M. E. & Hale, T. S.  (2017). Quantitative Analysis for Management (13th Ed). New York: NY, Pearson