# Acme Mexico City Harvard Case Solution & Analysis

EXECUTIVE SUMMARY

Acme Co. is making its back breaking efforts in order to enhance the overall profitability of the company by reducing the operational costs of the company. Moreover the company is off the view that reducing these costs would provide company a competitive edge in order to compete strongly in the entire market. Thus, the company is currently considering scheduling its customers in such a way that it could decrease the overall costs of the company. Moreover, the company has adopted various operational strategies and methods in order to identify the minimum costs of the company.

OPERATIONAL MANAGEMENT STRATEGIES

LINEAR PROGRAMMING

In order to arrive at the minimum cost per hour associated with the employees of the company, the top management of the company has used linear programming. The linear programming has been used in order to identify the lowest cost of the company efficiently and effectively. The process of linear programming helps the company in identifying the lowest cost of the company by making respective functions using different variables such as cost and the number of employees.

This methods also helps the company in maximizing their overall profitability of the company by lowering the overall costs of the company. Thus, the management has used this method, which had enabled the management to identify the lowest cost per hour of the company. The calculation of linear programming depicts that the minimum cost of the company associated with the employee of the company is \$1821 per hour.

There are many assumptions undertaken in order to compute the minimum cost of the company. It is assumed that X represents the cost of the part time employees, whereas, on the other hand, Y represents the full time employees of the company. It is assumed that the minimum no. of part time employees required for the first shift of the company is 10 in order to minimize the overall costs of the company. Whereas, it is also assumed that the company would require a minimum no. of 16 employees in order to meet the minimum requirement of the company.

This will allow the management of the company to lower their costs efficiently and effectively. Moreover, during the second shift of the company, it is assumed that the company would not allocate any part time employee in the second shift of the company, because the management of the co0mpany has already utilized it’s all part time employees in the first shift of the company.

Therefore, the management of the company should allocate its full time employees in the second shift of the company in order to minimize the co9sts of the company. Furthermore, few constraints have been considered in order to use the concept of linear programming efficiently and effectively. The constraints considered in order to calculate the minimum cost through linear programming includes: the constraints regarding the maximum number of employees in order to control the costs of the company at a certain level.

The maximum level of employees at a single time which could be maintained by the company is 30. Moreover, Z is assumed as a minimum cost of the company. The minimum function is derived by summing up the products of the cost with the number of their respective number of employees.

Moreover, the constraint 1 shows that the in shift one there should be minimum 10 part time employees as well as 16 permanent employees. This shows that the company. The constraint 1 also shows that the company’s employees at a single time should not exceed 30 employees. Moreover, a function for second shift has also been calculated which shows that the company should use only permanent employees in shift two rather than using part time employees as the company has already availed all the part time employees in the first shift of the company.

Therefore, the function is set in such a way that it depicts the minimum amount of permanent employees required in second shift in order to address to the customers in the second shift. The function depicts that the company would need at least 28 permanent employees in order to minimize the overall costs of the company.

Thus, by using linear programming the company is able to identify its minimum costs efficiently and effectively..................

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