Month: February 2023
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A problem in supply chain management
In the product mix problem, we assumed perfect knowledge of future demand, but, unfortunately, exact demand forecasts are a bit of scarce commodity in the true world. Indeed, the standard trouble in supply chain management is purchasing an item for which demand information is quite uncertain. If we order too much, one or more of…
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THE ROLE OF UNCERTAINTY
We often have to make decisions here and now, without complete knowledge about problem data or the occurrence of future events. In distribution logistics, significantly uncertain demand must be faced; in finance, several sources of risks affect the return of an investment portfolio. In all of these settings, the future effect of actions is not…
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The case of heterogeneous products
We solved the previous example by a simple rule: Let us pick the most profitable item and try producing as much as we can; if we hit a market limitation, consider the next most profitable item, and go on until we run out of resource availability. However, there must be something more to it. To…
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The case of similar products
A firm4 produces red and blue pens, whose unit production cost is 15 cents (including labor and raw material). The firm incurs a daily fixed cost, amounting to €1000, to run the plant, which can produce at most 8000 pens per day in total (i.e., including both types). Note that we are expressing the capacity constraint in…
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A DECISION PROBLEM WITHOUT UNCERTAINTY: PRODUCT MIX
Product mix decisions are essentially resource allocation problems. We have limited resources, such as machines, labor, and raw materials, and the problem calls for their optimal use in order to maximize profit, which is earned by producing and selling a set of items. The decision problem consists of finding the right amounts to produce for…
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Introduction
If you are reading this, chances are that you are on your way to becoming a manager. Or, maybe, you are striving to become a better one. It may also be the case that the very word manager sounds dreadful to you and conjures up images of unjustified bonuses; yet, you might be interested in how good management decisions…
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Political Economy of the Indian State: Bardhan and Rudolph’s Analysis
Could objectives of the Nehru-Mahalanobis model and the planned economic development in terms of industrialization, asset and infrastructure creation, poverty alleviation and employment generation be achieved? If not, then what are the factors that have influenced the state policies and their operation? Are there interest groups that have influenced the resource distribution away from the…
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Political Economy of the Indian State
The Constitution of India has envisioned a liberal-democratic-welfare state with socialist goals. Sounds a bit torn between different directions but the goals of welfare democracy with equitable redistribution of resources are considered important. A result of this goal has been the importance given to the planning process for long-term development. This goal is also reflected…
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Public-choice theory
Application of rational-choice assumptions in understanding political process and for carrying out political analysis has resulted in public-choice theory. How government’s policies and decisions regarding resource allocation are made? How public and social policies are decided? Do preferences and policies of government reflect the actions of specific interest groups within the economy? Answers to these…
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Game theory
It applies mathematical assumptions to analyse individual behaviour in the context of choices and options or what is called the ‘prisoners’ dilemma. The game theory has been discussed in detail in Chapter 2, relating to approaches to the study of politics. The focus of this approach is on analysis of strategic choice by decision-makers in a…