Guidelines regarding the “Viktor Lenac Shipyard” Case
Please follow the case report format suggested on pages 2-3 of your syllabus which is reproduced here for your convenience:
Case Report Format:
Generally the case report format could be: (1) 1-page Executive Summary; (2) Brief company /business background and problem statement; (3) list of operations challenges or symptoms, primary and/or secondary, and the analyses and discussions of these challenges; (4) modeling solutions or alternative solutions along with analyses of their pros and cons; (5) your recommendation, and its basic reasoning /justifications. Typically the main case report (1)-(5) is limited to a maximum of 15 double-spaced pages for graduate students. A technical appendix, if any, could also be attached after the main report. [This is relatively simple case, so I don’t expect a long report.]
We recommend following this format for your case report.
-20% of the case grade is for adhering to a format similar to this (or better) in your case report
-80% of the case grade will be based on the contents in terms of correctness of your results and the clarity of your interpretations / discussions / recommendations.
Hints about how to analyze the problem in the case (mostly in sections 3 or 4): You would need to formulate an integer linear programming model for this purpose. You will need to define Decision Variables such as
R= number of Repair Contracts Accepted;
C= number of Conversion Contracts Accepted; etc.
Then you would need to use the information in the case to formulate the objective (to maximize or minimize), and the relevant constraints. Remember there is information about the profitability of each decision (e.g., profit contribution of repair contract) and resource and demand availability in the case.After you formulate the integer linear programming mathematical model, enter them into POM/QM for Windows.
1. Treat all variables as “REAL” (continuous), enter them into Linear Programming module and click on Solve. The solution in this case is considered as Linear Programming (LP) optimal solution, which is the best outcome you could ever get if the decision variables are allowed to be non-integer and serves as the upper bound to the original Integer Programming model. Check out whether the LP solution would be able to satisfy the problem’s needs such as meeting the profit minimum. If not, that means the integer solution you find later would not be able to do so either. If yes, then you could go back to use the Mixed and Integer Program module and re-set the variable type as “INTEGER” and Solve it again, to see what the optimal solution you get.
2. If the LP solution is not able to satisfy the problem’s needs, then the LP solution screen would provide a column called “Shadow Price” (equivalently, the “Dual Price” in Excel Solver’s solution screen, if you choose to solve the problem under Excel). The shadow price’s meaning, simply put, is “how much the objective value will increase, if the right hand side of a particular constraint’s right hand side is increased by 1 unit” within a given right hand side range, shown as Lower Bound and Upper Bound. [A simple explanation is provided in You could apply this important concept to understand your next strategy direction when looking at the areas you could find improvement (in your objective). You could even try entering a different Right Hand Side value (RHS) for a constraint to see what happen.
3. For a particular constraint (e.g., limited resource) that you believe would give you troubles in achieving your goal (the problem’s needs), would you be able to find more resources (RHS) and at what market prices? Do you have some market or historical research evidence to support your strategy approach? There are some interesting discussion points coming out of this angle.
4. If you insist on using Excel Solver to analyze this case, then you could also use the ‘Viktor Shipyard BaseCase Model Hint file” in Excel.
5. There should be some qualitative issues (e.g., labor, economic and political environment) not covered in the above model for you to discuss their implications to your case analysis and recommendation.