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Decision Support for Management – Project Management Assignment Ideas

Decision Support for Management – Project Management Assignment Ideas


A frozen food store that sells frozen fish is having a problem meeting its customer’s demands because the customers don’t always find what they want in the store. The food store is therefore having difficulty maximizing profit due to customer dissatisfaction; this also includes the high operating cost of running the store, which includes acquiring more storage space to meet customers’ demands, rent, electricity…etc. The owner of this food store have therefore decided to create an inventory system that will help them to make strategic decision and policy as to;

Problem 1:

What they need to have in store to meet their customer’s demand. This will help them to avoid losing their customer because when customers come in and can’t find what they want, they leave for another store where their immediate needs can be satisfied.

Problem 2:

Since the store does not have an inventory system, there is the problem of understocking and overstocking. This leads to wastage and the need to acquire more storage space, which eventually results in the high cost of running and maintaining the store, seriously affecting the business’s growth. Therefore, it is important to help the store make decisions that will eliminate the imbalance between customer demand and business objectives.

Question 1:

The first problem is to help the store in addressing the question of how much to order in-store to meet the customer’s demand

Question 2:

The second question is to address the problem of when to reorder more stock so as not to affect the minimum level of stock required to meet customers’ demands. This will ensure customer demands are met, and also, there will be no need for acquiring more storage, giving room for profit maximisation.

The rationale for the application of System Dynamics to the above problems:

System dynamics is a computer simulation modelling technique that helps organisation to understand and discuss complex issues and problems. It is a technique that allows for the understanding of the behaviour of complex systems, which allows managers to make strategic planning and policy analysis through the use of computer-simulation tools. (Forrester 1973, pp.449) System dynamics’ goal is to explain how the system behaves and find management policies and organisational structures that lead to greater success. Therefore, for this frozen food store to cut costs and maximize profit by meeting the demands of their customer, which will also attract more customers due to their efficiency, it is important to understand the cause of their inability to satisfy the customers and to identify the best available decision that will correct this which can be best derive with a system dynamic technique.

Key aspects of System Dynamics Modelling:

The system dynamics modelling arises as a result of the principle of accumulation, i.e. when the flows eventually accumulate into stock. The dynamic behaviour of this scenario, therefore, will arise due to the inflows (Fish) into stock (inventory) and going out into the outflows (customers/consumers) of the commodity. The inflows are the supplies (fish) that need to be ordered and stocked to meet the demand of the outflows. Clearly, the problem with this scenario is that the entities in the outflows are greater than the entities in the inflow, which causes the number of entities in the stock to be reduced, i.e. the demand rate of the customer is greater than the rate at which the store is ordering for more supplies (fishes), and this is creating the problem of stock not been able to meet the demand of the customers. Therefore, it is necessary to increase the rate of inflow against the rate of the outflow in order to have a state of equilibrium in the system’s dynamic modelling.

System Dynamics Diagram:

Stock and Flow diagram;

Feedback and Causal loop;

According to the problem in focus, the number of orders the store makes for each period can be retained or decided from information reserved in the everyday operational systems. This is also equivalent to the amount of sales the store makes. See appendix for diagrams.

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