Office staff planning at Boeing Aircraft

By: Section C Group 1

14010 AKASH KHATRI
14031 BHARATH KUMAR D
14085 NANDEESH M S
14095 NITISH KUMAR SAMANTA
14131 SAESH V NAIK
14158 SRASHTI SARAN
Date of Submission: 3rd February 2015

Executive Summary:
Boeing Aircraft has been asked by the federal government to resubmit its bid to be prime
contractor for a modified version of the space station. Boeings design division is expected to
need temporary additional secretarial support to handle a substantial increase in paperwork.
The whole process will be continued until the bid is completed. Boeing can hire temporary
personnel from Techhelp, a local temporary help firm. Techhelp is specialized in technical
secretarial support, or it can temporarily transfer secretarial staff from other divisions within
the company. The house secretary who is transferred can produce around 40 pages daily, two
hours a day with technical assistance from supervisory personnel .As he or she is less familiar
with the Boeing environment than Boeing employees, it is estimated that a Techhelp
employee can produce only 30 pages of work per day. But on the other hand the Techhelp
employees higher degree of technical secretarial training, however, each employee only
requires approximately one hour of technical assistance from supervisory personnel.
Boeing has allocated up to 10 workstations to the design division for additional secretarial
support and one full-time employee for technical assistance providing eight hours of technical
support time available daily.

Statement of the Problem

Boeings design division needs more paperwork to resubmit the bid for being the
prime contractor for a modified version of the work station.
Lack of in house personnel to complete the required paperwork
Causes of the Problem
Boeing has to resubmit the bid for being the prime contractor for a modified version of the
work station.
Decision Criteria and Alternative Solutions.

Boeing can hire for Technical additional secretarial support from Techhelp (a local

temporary help firm).

Temporarily Boeing can transfer secretarial staff from other divisions within the

company.
Boeing can use a combination of employees from Techhelp as well as temporary
transfers from other divisions in the company.

Recommended Solution, Implementation and Justification

We will recommend for increase or decrease of Additional hours and workstations

with allowable increase or decrease to gain maximum profit.

We came to this recommended solutions after analysing the LP model and sensitivity
report.

End-of-case Questions
a) Formulate a linear program to determine the optimal number of temporary Techhelp
employees to hire and in-house transfers needed to maximize the total potential
number of pages produced per day. Assume that fractional values represent workers
assigned part time to the division.
Objective: To maximize the total potential number of pages
Variables:
X1= In house Secretary
X2= Outsourced

Tech

In house Secretary(X1)

Outsourced(X2)

2Hr

1Hr

assistance(Techhelp)
We can formulate this LP problem as follows:
Maximize: 40 X1+30 X2,
Subjected to the constraints:
2X1+X2<=8
X1 +X2<=10
X1, X2>=0
b) Why is there a nonzero reduced cost associated with the output of in-house transfers but
not with the output of Techhelp employees? What is the reduced cost for the output of inhouse transfers?

Associated with each variable is a reduced cost value. However, the reduced cost

value is only non-zero when the optimal value of a variable is zero.

The reduced cost value indicates how much the objective function coefficient on the
corresponding variable must be improved before the value of the variable will be

positive in the optimal solution.

In this case of a maximization problem, "improved" means "increased." In this case,
where, for example, the objective function coefficient might represent the net profit
per unit of the activity, the reduced cost value indicates how much the profitability of
the activity would have to be increased in order for the activity to occur in the optimal

solution.
None zero reduced cost is associated with the output of in-house transfers(X1)
because, in that case optimal solution is 0 that represents the maximum value of

objective function.
But in case of the outsource(X2) Techhelp employees, the optimal value is 8(nonzero),

so here the reduced cost is 0, according to concept in maximisation.

The reduced cost for the output of in-house transfers is 20.

c) Calculate the range of optimality for each objective function coefficient. Explain in simple
terms why the lower limit for the range of optimality for the output of in-house transfer is
infinity?
The range of optimality
Variable

Original Value

Lower
Bound

Upper Bound

X1

40

-infinity

60

X2

30

20

+infinity

Lower bound shows infinity, because it does not affects our final profit.
d) Determine and interpret the range of feasibility for the availability of the number of
workstations and the number of hours of technical assistance available.
Constraints

Original
Value

Lower
Bound

Upper
Bound

Shado
w
price

final

Constraint1(Hours)
Constraint2(work stn)

8
10

0
8

10
+infinity

30
0

8
8

For every unit of allowable increase (upper bound), we get profit of 30units, but the range is
allowable till 10maximum and we cant decrease here.
For every unit of allowable increase (upper bound), we get no profit, but the range is
allowable till infinity and we can decrease it till 8unit.
e) Explain in simple terms why the upper limit of the range of feasibility for the number of
workstations is + infinity.
Workstation is the redundant constraint, which does not affect feasible region solution after
refereeing to graph. So upper limit range could be +infinity.

f) Suppose, in monetary terms, Boeing feels that each additional potential page is worth $1
and the cost of a supervisors time for technical assistance is $25 per hour. Using shadow
prices, show why having up to two additional hours of supervisory assistance is profitable to
the company. Show (by re-solving the problem) why hiring a second full time employee
(increasing the hours of available technical support to 16) would not be in Boeings best
interest.
Part 1:
Each additional potential page = $1
The cost of a supervisors time for technical assistance is=$25/hour
Yes, having up to two additional hours of supervisory assistance is profitable to the company.
Because, we get maximum value=300
So, Boeing get 300-240=60$ more investing @ 2 additional hours of supervisory assistance
2 additional hours of supervisory assistance: 2*25=50$(hence profitable)
Part 2:
After increasing the hours of available technical support to 16,
Maximum value=360
So, 360-240=120$ extra profit with investing more 8 hrs.
8hrs:8*25=200$
Due to loss, hiring a second full time employee would not be in Boeings best interest.

Detailed report (Part1)

Answer report:

Sensitivity report:

Limits report:

Detailed report (part2)

Answer report:

Sensitivity report:

Limits report:

References
Balakrishnan, R. S. (n.d.). Managerial Decision Making Modeling with
Spreadsheets.
Schedlbauer, M. (n.d.). Interpreting Solver Sensitivity Report. Retrieved from
https://www.youtube.com/watch?v=1lQQRMMzsno.
Schrimshaw, C. D. (n.d.). Sensitivity report in Excel. Retrieved from
https://www.youtube.com/watch?v=1lQQRMMzsno.

Work Contribution by Team members:

Name
Akash Khatri
Bharath Kumar D

PGDM
14010
14031

Contribution
Question 3
Question 2,

Time taken
1 hour
1 hour

Document
Nandeesh M S

14085

preparation
Question 4,

1 hour

Document
Nitish Kumar Samanta
Saesh V Naik
Srasthi Saran

14095
14131

preparation
Question 1
Question 5, PPT

2 hour
1 hour

14138

preparation
Question 6, PPT

1 hour

preparation