Decision Making / 6 / 6.3

6.3 NATURE OF THE TUTORIAL PROBLEM—BRIEF OVERVIEW

The tutorial (Linard and McLucas, 1999) focuses on an engineering management problem taken from real-life. ThreeTwoOne-Ready Pty Ltd owns a small urban concrete batching plant. Competition is stiff and ThreeTwoOne knows that client service is paramount. An inability to respond on time and on quality to customer demands will lose orders in the short-term, and clients in the longer term.

In response to phone orders placed by clients in the building and housing industries, concrete is mixed from stocks of raw materials. Aggregate, sand and cement are mixed to order and delivered to building sites in the local area. Orders are generally small and delivered to dispersed sites. There are a number of other companies mixing and delivering concrete to construction sites. ThreeTwoOne’s directors and employees are conscious that any inability to deliver, or failure to respond quickly to customer demands, is most likely to lead both to lost orders and lost goodwill.

Consideration of the problem starts with the company owning three delivery trucks. The company often utilise private delivery trucks, for which a significant premium is paid through short-term contracts. The company directors have agreed that their immediate priority is to invest in two additional delivery trucks, making a total of five. This decision appears inevitable because of the cost of employing owner-drivers on an ad hoc basis.

After a period of time it becomes clear that even with five company-owned trucks, customer demands cannot be met with any certainty. The company continues to struggle to meet its goal to build a reputation as a reliable and responsive supplier. Directors of ThreeTwoOne are growing increasingly anxious about the company’s ability to remain competitive in the longer term.