Four Tasks of Organization Dragon Wool Limited - Case Study Example

DRAGON WOOL LIMITED CASE STUDY by [Name] Course Professor’s Name Institution Location of Institution Date INTRODUCTION For a CEO to understand the future of their organisation they have to grasp and comprehend the various mechanisms one would require to evaluate their organisations in order to make decisions for their organisations. There are several evaluation tools for any organisation. In this case study, we have four tasks to understand perfectly how one can fully understand their organisation. They are further simplified as follows; TASK ONE Decision Tree Percentage of probability If permission is granted before 2018 Profit if firm is extended New Profit if firm moves to Hungary 85% chance £650,000 £750,000 15% chance -350,000 -250,000 EMV 300,000 500,000 1) RECOMMENDATIONS; If the companies aim is to maximize Expected Monetary Value [E.M.V] What is Expected Monetary Value? Expected monetary value is the sum of weighted outcomes that are tied to a decision of weights that relay on probabilities of alternative events that are likely to pay off. Mathematically it is expressed as Probability of occurrence X Gain or Loss that will result. In order to maximize the expected monetary value in the business, the CEO should put to consideration extending the firm in its native land before expanding to a foreign market. This will allow optimal profit harvesting from the business when it is locally situated rather than when the business is trying to get licensing in a foreign market, where it only has a ten percent acceptance for new firms. Having such consideration in place would guarantee the firm an optimal profit in its operations for their new project. Factors affecting optimal strategy; If the Hungarian local community is slated at 10,000 euros, then the optimal strategy gets affected. It occurs that the firm will still retain the same profit as that it would have retained if it remained in its local plant after having to expand its resources. In a case where the firm is willing to offer the local government any amount of money than it should not exceed 10,000 euros for it to gain maximally To fully optimize the profit margin, an organization has to fully utilize the input and maximize its output in the operating business environment. For this to occur a good corporate leader has to use this tool to predict the future of their organization. Globalization will affect the returns due to the regulations that come with trading in a foreign market. Besides the whole factor of rules governing the market, several factors such as the external environment too affects the day to day running of organization in such a market. For an optimal strategy to thrive, then a firm has to put into consideration all functions of in an existing business thus putting into consideration the external factors affecting the business. Task two JANES SUGGESTION. Equations for Profit P(x)=R(x)-C(x) Net Profit P(x)-C(x) Linear Programming Graph Constraints For the shawl; 8x+12y ≤20 If X=0 , y=1.67 Y=0 .x =2.5 Therefore, for the shawl (2.5, 1.7) For the jumper 98x +62y≤160 If x is 0 y =2.6 If y is 0 x =1.6 Therefore, for the jumper (1.6, 2.6) Constraint 3 X, Y (0, 0) 50x + 100y ≤ 1,200,000 5x + 4y ≤ 60,000 100x ≥ 300,000 x ≥ 0 EXPLANATION; The point of intersection in the constraints as illustrated from the graphs above are the number of shawls and jumpers produced per week. In such, kind of graphs we have the feasible sides of it in the graph. PRECEDENCE TABLE Activity Immediate predecessors A None B None C A D B, C E D F E G F H F, G I H NETWORKING DIAGRAM Networking diagrams, are a systematic way that breaks down in a visible way the processes of production in any project, or production process. A good networking diagram utilizes nodes and all the steps descend to the left. In order to construct a good networking diagram, one requires a precedence chart. It helps a CEO to understand if some processes can be combined or crushed together to make completion of the project a success. Arrows in a networking diagram indicate the flow of events down to the last process. In decision making, it is a good factor since it aids planning and scheduling for any organization. Good decisions results to optimum output and good planning for any organization. I H G F C A E D B IN INTERPRETATION OF THE ABOVE; The skills below apply in the network diagram; EST (Earliest Start Time): It refers to the earliest time an activity can start assuming after all other activities preceding are complete. LST (Latest Start Time): Latest time that an activity could start without causing a delay in the overall duration of the project Float time: Possible delays while not causing a delay in the overall duration of the project On identification of the critical path we look at minimum time of project completion. On this one A-D-E-F-G-H-I If the firm incurs 10Euros per hour, the total cost of completing the process No. of hours-2+4+2+3+1.5+3.5+2+4=21hours Cost incurred=21 x 10= 2100 euros Total minimum cost 1.5+2+1.8+2+1.5+3+1.5+2.5+2=17.8 hours If programs are crushed; A-B-D-E-G-I 1.5+2+2+1.5+1.5+2=10.5 If the programs are crushed and the whole process takes 10.5 hours Therefore, It would cost 14+36+52+28+18+28=176euros 5) It is worth crashing the activities since it has resulted to a reduction in the cost of production all together in the production. This results to optimization of the little resources in the organization. 6) Upgrading with a new washing machine, anything that reduces the time of production results to a quick and faster way to deliver products. Upgrading is a necessity in such a situation with the intention of getting to have more productions. SUMMARY SUSAN SUGGESTIONS In Susan’s suggestion the following short Cummings can be noted, Probability It depends entirely on probability in order to make decisions. In any business, it growth doesn’t only depend on calculated probabilities in order to thrive in any market or environment. Instead, it should also include external factors, especially now that the firm needs to relocate to a new environment. Susan has a lot of optimism that indeed it will thrive in Hungary, without considering the regulation in the new business environment. Which requires them to get more labor from within, and the ten percent revenue the country demands. This affects the whole profit margin. Susan’s mode is good for a globalization strategy for the firm but not optimum profit. In considering a milking strategy in order to gain optimum profits has to either use a divesting strategy or bring in a complimentary product for the same service. I would advise the CEO to adopt Susan’s strategy if they are having in mind to go global as opposed to reaping maximally from the business. Besides, employing Susan’s strategy ensures that indeed that a business has reason for its future through prediction all the same (McDonald, P., 2006 pp. 61). JANES SUGGESTION Jane brings in a new dimension of approach to how the firm would reap profits in the whole different idea by looking at the materials used for production. Jane uses the optimization and minimization through linear programming for the organization. Jane’s input has the following short comings. In real life situation, it not always that a business will have linear problems. Sometimes the problems encountered by an organization may be Jane’s approach towards maximization is single objective. In the modern day world, there is no organization with a single objective in any environment. This slows down an organization without having to put to consideration other factors in the same environment. The certainty of the future cannot be determined by the formula given by Jane. In case the company has decided to reap optimally; and has employed the milking strategy, then it might employ the same tactic in order to gain maximally for the whole period (CODE, S.M., pp.12 2014). I would advise the CEO to put in to consideration Jane’s suggestion, in times when the firm wants to achieve a competitive advantage over its fellows in the market in order to reap massively from the same market. I would also advise the manager to alternate Jane’s suggestion and that of Susan depending on prevailing circumstances. Optimization of costs and that one of profit for any organization assures it a stake in the market thus promoting proper utilization all the same. Linear programming enhances utilization of resources in the market. Task three MARKS SUGGESTION Mark studies the organization using the Critical Path Method that helps him identify the most suitable and important activities that impact the production schedule. Mark goes ahead to come up with a preceding table that was used to outline the systematic procedure of events in the firm. Marks study is a visible one and easy to interpret for the organization. In my advisory to the CEO I would suggest the use of this method for the following reasons. In this method all the dependable are visible through construction of the networking diagrams as the one constructed above. It enables the management understand and get to learn better what to do or combine in order to save. Besides the critical path method gives harmony in large complex projects by giving a systematic approach to them, through proper scheduling, and considering risk management. For many managers the use of this technique has enabled visibility of projects and impact schedules. It optimizes the efficiency of any project management. (Dowd, K., 1999 pp 66) For any strategy a firm employ it gives an elaborate way of implementation all the way. The presence of this tool doesn’t miss its disadvantages. On this one it lacks a proper way to show the resources invested and resources allocated all the same. (Kahraman, C. ed., 2008, pp28) Task four CONCLUSION As a CEO of this organization, Use of the critical path method is the most suitable of them all. When running an optimal strategy, an organization has to gain as much as possible from the resources input by the firm. A firm has to also make sure that the procedures are not too complex, and the whole project or manufacturing procedure is not to complex so that they keep the system as elaborate as possible. During specific seasons a firm may decide to utilize the linear method especially when the product is almost getting to its declining stage, or the market in which it operates is flooded. The linear programming utilizes the maximization of cost or profit for the organization thus ensuring that it will accrue an advantage over its competitors in the market thus assuring the organization of edges out due to competitive advantage in the market. The use of EMV ensures that the company is able to predict its future in the market and duration period all the same. Effective utilization of this tool as a CEO will ensure that the company is stable to equip its self in the future emerging and changing trend all the same. A good CEO is able to see and utilize the tool to make better decisions for the organization in future. Besides, it opens up a way to determine if an organization should venture into a cropping up investment; that would lead to more profits than the current items of trade. It also prepares an institution to expect loses or profits (Jorion, P., 1997 pp.3). In conclusion, all this tools are effective in management of an organization depending on what strategy the firm is willing to employ in an organization. The willingness to employ these strategies should be coupled up with a good environmental scanning that will not result to creation of bombarding strategies in the organization. It is therefore useful to use all these tactics to ensure that your organization scales up. References CODE, S.M., 2014. Financial risk management. Farrell, S., Cahill, V., Geraghty, D., Humphreys, I. and McDonald, P., 2006. Organisation multi objectives theory 10(4), pp.72-78. Chankong, V. and Haimes, Y.Y., 2008. Multiobjective decision making: theory and methodology. Courier Dover Publications. Jorion, P., 1997. Value at risk (pp. 1-4). McGraw-Hill, New York. Kahraman, C. ed., 2008. Fuzzy multi-criteria decision making: theory and applications with recent developments (Vol. 16). Springer Science & Business Media. Sunderland, MA: Sinauer. Dowd, K., 1999. Financial risk management. Financial Analysts Journal, pp.65-71. Vogel, A.I., 1960. A Text-book Of Quantitative Inorganic Analysis Ed. 3rd. Read More