The Fifth Column---Two Essays on Model Motivation: With This Sign, Optimize & The Shekels of Silver Solution

Gene Woolsey
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Gene Woolsey: Colorado School of Mines, University of Waterloo, Instituto Technologico De Monterrey, The Fire Brigade Companies

Interfaces, 1978, vol. 9, issue 1, 13-17

Abstract: Some time ago in a far city there was a manufacturing firm that was in a most happy state. Demand for their product far outstripped the ability to supply it. Their quality was so high that customers did accept the long lead times, rather than go to a vendor of less excellence. The profit margin on the products was comfortable, and soon the company found itself forced, happily, to go to a three-shift operation. However, it was not long before it was noticed that the part of the firm that did the final assembly and finishing was posting service rates to customers that were poor indeed. In fact, only with the greatest effort could the service rate of on-time deliveries reach 37%. What made this doubly strange was that the part of the firm that did the initial foundry work on the product was posting rates of 99.995% of desired tonnage. There was little question in the minds of management that the finishing and assembly shop needed looking into.

Date: 1978
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