Background:
North BancTec Incorporation is under consideration to go for research and development for its current year projects. The projects are for some product development and modification in their current project.
Problem identification:
The company is of very small size, therefore it cannot go through all the project research and development. The choosing approach must be followed to have maximum returns and market share with them. The other problem with the company is to complete its research and development phase in only 60 days for all its three divisions.
Possible alternate solutions:
The company has an option to go for hiring employees to further satisfy the all needs they are undertaken. The company can have profits of $28.3 million if it undertakes all possible outcomes. The possible outcome will give an average return per hour of $51,686 (appendix 1).
Selection and justification of the best option:
The selection is hard to meet the limited time requirements. The time is very limited as it cannot even meet the minimum requirements of the company. In order to meet the minimum requirement, it is required that the company must have extra hours. With the combination of one data center, one HR project, one accounting system and two telecom interface require a total of 50, 52, 90 hours of Georgetown, Dubai and Novosibirsk respectively. The shortfall is, therefore, of 12 and 50 hours in Dubai and Novosibirsk respectively (appendix 2).
If the company goes in to fill the shortfall then it can have a total benefit of $13.8 million and a per hour benefit of $71,875 (appendix 2). The removal of such shortfall will definitely give benefit to the company as these are the projects selected on the basis of their per hour earnings.
If the company undertakes two government projects, then the net benefit of the company will be $22.8 million worth per hour benefit of $59,686. The shortfall is 30. 96 and 116 in Georgetown, Dubai and Novosibirsk respectively (appendix 2).
If it limits its hours to those specified, then it can do only three projects and if it has an option to go for compensate one department hours for another department than it can undertake four projects that are specified in appendix 2. The benefit will be $8.8 million and per hour benefit will be $72,131. The excess hours are 10 for Georgetown and the shortfall of 10 hours to Novosibirsk.North BancTec Incorporation Case Solution
What did you learn from the case?
The case was very helpful to understand the limitation of resources and the resources in this case was the labor hours to undertake a research and development. The limitation of resources was the factor that makes an individual or a company to utilize the resources in a best way to have higher levels of satisfaction or returns with them.
The best possible outcome is required and in this case, wastage of resources could occur as it happened in the Georgetown for last case in appendix 2.
Appendix
Appendix 1:
|
Project |
Type of Project |
Projected Net Benefit |
|||
|
(in thousands of dollars) |
Total hours | Per hour benefit | Priority | ||
| HR processes 1 | New product |
2,000 |
70 |
28.57 |
8 |
| HR processes 2 | Improvements and modifications |
3,000 |
40 |
75.00 |
4 |
| Telecom interface 1 | New product |
1,500 |
54 |
27.78 |
9 |
| Telecom interface 2 | New product |
1,000 |
44 |
22.73 |
10 |
| Telecom interface 3 | Improvements and modifications |
2,500 |
26 |
96.15 |
2 |
| Data center | New product |
1,800 |
14 |
128.57 |
1 |
| Accounting system 1 | New product |
2,500 |
50 |
50.00 |
6 |
| Accounting system 2 | Improvements and modifications |
5,000 |
58 |
86.21 |
3 |
| Government services 1 | New product |
6,000 |
104 |
57.69 |
5 |
| Government services 2 | New product |
3,000 |
86 |
34.88 |
7 |
|
28,300 |
546 |
||||
| Per hour average |
51.83150183 |
Appendix 2:
| Best selected options: |
Nature |
Net benefit |
maximum Days to complete |
|
Days left |
|||
|
|
|
G |
D |
N |
G |
D |
N |
|
| Data center | Product Development |
1,800 |
0 |
0 |
14 |
60 |
40 |
26 |
| Telecom interface 3 | Improvements and modifications |
2,500 |
10 |
0 |
16 |
50 |
40 |
10 |
| Accounting system 2 | Improvements and modifications |
5,000 |
0 |
28 |
30 |
50 |
12 |
-20 |
| HR processes 2 | Improvements and modifications |
3,000 |
16 |
24 |
0 |
34 |
-12 |
-20 |
| Telecom interface 1 | New product |
1,500 |
24 |
0 |
30 |
10 |
-12 |
-50 |
|
13,800 |
50 |
52 |
90 |
|||||
| Per hour average |
71.875 |
|||||||
| Government services 1 | New product |
6,000 |
40 |
34 |
30 |
-30 |
-46 |
-80 |
| Government services 2 | New product |
3,000 |
0 |
50 |
36 |
-30 |
-96 |
-116 |
|
22,800 |
90 |
136 |
156 |
|||||
| Per hour average |
59.68586387 |
|||||||
| Best selected options: |
Nature |
Net benefit |
maximum Days to complete |
|
Days left |
|||
|
|
|
G |
D |
N |
G |
D |
N |
|
| Data center | Product Development |
1,800 |
0 |
0 |
14 |
60 |
40 |
26 |
| Telecom interface 3 | Improvements and modifications |
2,500 |
10 |
0 |
16 |
50 |
40 |
10 |
| HR processes 1 | Product Development |
2000 |
30 |
40 |
0 |
20 |
0 |
10 |
| Telecom interface 3 | Improvements and modifications |
2500 |
10 |
0 |
16 |
10 |
0 |
-6 |
|
8,800 |
50 |
40 |
32 |
|||||
| Per hour benefit |
72.13114754 |
|||||||
...................
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