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Sinofert Holdings Limited, the largest comprehensive fertilizer enterprise in China, is trying to improve the profitability of its urea business. The company has invested a great deal of time and money but still reported losses in 2007 and 2009 and only a small profit in 2008. Sinofert both manufactures urea and purchases it from external suppliers, as well as distributing it to the provinces. Manufacturing costs, transportation costs, market prices, demand forecasts and manufacturing constraints are all known. An optimal distribution plan using linear programming can be compared to the plan derived by Sinofert management. Substantial profitability increases are shown to be possible, although the optimization reveals some issues with contract constraints. If the company is to make its urea business profitable, it needs a fresh look and a change in the way of doing business. The company’s chief analytics officer has been asked to look at the urea business and to provide recommendations to increase profitability.

A small-scale school bus company was founded five years ago to facilitate the home-to-school transportation of high school and middle school students who were enrolled in specialized programs. The company was owned by a husband-and-wife team who worked full time to arrange private bus transportation to four schools within their neighbourhood school district. The company was operating below break-even, and the owners wondered how they might increase ridership or revenues.

A small-scale school bus company was founded five years ago to facilitate the home-to-school transportation of high school and middle school students who were enrolled in specialized programs. The company was owned by a husband-and-wife team who worked full time to arrange private bus transportation to four schools within their neighbourhood school district. The company was operating below break-even, and the owners wondered how they might increase ridership or revenues.

The head of Data Marketing Analytics and Mobile for Intel Asia-Pacific was reviewing the proposed media plan for the Catch & Win 2.0 campaign. The media purchase needed to be finalized quickly in order to be included in the current quarter's budget, but he could not help feeling that the proposed spend across the markets and advertising types could be used more effectively. He thought that the key was to use the company's own experience and data regarding social media engagement within their markets rather than to rely on the generalized industry metrics provided by the contracted media agency, and now he must improve the proposed media plan.

The significant growth of offshore analytics business process organizations over the last decade has raised important issues for the management of corporations seeking to take advantage of the opportunities that such organizations offer. Retaining an offshore analytics business process organization appears to offer a convenient path to advanced analytics, but management needs to understand that the benefits of "offshoring" analytics come with costs and should think carefully about the components of analytics that can and should be outsourced and how this process is managed.

The significant growth of offshore analytics business process organizations over the last decade has raised important issues for the management of corporations seeking to take advantage of the opportunities that such organizations offer. Retaining an offshore analytics business process organization appears to offer a convenient path to advanced analytics, but management needs to understand that the benefits of “offshoring” analytics come with costs and should think carefully about the components of analytics that can and should be outsourced and how this process is managed.

A media planner at a specialized media buying firm was in the process of planning the spring 2012 television campaign for a customer with a recognizable brand name. The campaign budget of $7 million was to be spent on seven weeks of advertising during the first 20 weeks of the year. Each week of advertising involved a carefully selected series of advertisements on network and local television, and each week of advertising cost $1 million. Which seven of the 20 weeks should the planner choose? Is the $7 million budget the correct amount?

Analytics is often seen as a threat by senior managers, yet good analytics can inform decision makers and lead to better decisions. Senior executives are likely to react negatively if their deeply held intuition is challenged by results derived from data that use analytics that they do not understand. However, a manager’s job is enriched when it changes from an operations-level, decision-making function to a role in which a complex system is supervised. While leadership and interpersonal skills remain crucial, executives must now possess the ability to critically assess and utilize the innovations emerging from data and advanced analytics. Big data can also lead to new business models, such as when retailers determine the precise needs of their customers and no longer need retail space. This article suggests ways that managers can mine big data to enable their firm to establish and sustain a competitive advantage. It illustrates how Dell analysts were able to define a lucrative product line of pre-configured computers and how IBM Research partnered with Industrial and Commercial Bank of China, the world’s largest bank by market capitalization, to develop a highly successful branch network optimization system.

Excel spreadsheet for instructors.

DD Traders was the Asian branch of DEMDACO, a privately held company that wholesaled unique gift products, which were marketed and distributed to the specialty retail channel in the United States (as well as some international markets). Carolyn Glasow recognized an opportunity to leverage a quantitative approach to sourcing future allocations across vendors that would also improve the short-term demand transparency that was provided to the company's key business partners, which could lead to increased bargaining power for price negotiations and production lead-times. This was a recurring issue for Glasow and her sourcing team: how should she allocate product purchases among the various manufacturers that bid for the opportunity to supply products to DD Traders?

DD Traders was the Asian branch of DEMDACO, a privately held company that wholesaled unique gift products that were marketed and distributed to the specialty retail channel in the United States and some international markets. Carolyn Glasow recognized an opportunity to leverage a quantitative approach to sourcing future allocations across vendors that would also improve the short-term demand transparency that was provided to the company’s key business partners, which could in turn lead to increased bargaining power for price negotiations and production lead times. This was a recurring issue for Glasow and her sourcing team: how should she allocate product purchases among the various manufacturers that bid for the opportunity to supply products to DD Traders?

The general manager of Craig Manufacturing Cambridge Branch felt that there was room to improve top-line growth through better utilization of plant capacity. The company was losing out on sales due to the highly seasonal nature of demand; the plant was fully loaded four months of the year, but it had unused capacity during the remaining months. The general manager had just attended a lecture where a more flexible approach to pricing had been suggested as a way to better manage supply chain and capacity issues. An idea began to emerge: Could Craig Manufacturing use pricing to better match demand to plant capacity? If so, would this practice boost profitability, or would it merely reduce revenues?

Excel spreadsheet for 9B03E005.

The president of Oakville Hydro Energy services needed to make a decision on the installation of an electricity-generating engine at the regional municipal Wastewater Treatment Plant in Burlington, Ontario. This engine installation was in support of the production of green power, and the Ontario Power Authority (OPA) had introduced a feed-in tariff that paid a premium for the generation of this type of green power. One of three specific engines would be purchased and installed to generate electricity from the combustible gases produced during wastewater treatment. The president had to decide which engine generator would produce the most favourable output and the best return for Oakville Hydro and the municipality. The president also needed to decide whether or not to integrate the existing on-site gas storage tank into the controls of the generator system.

Yangarra Resources Limited, a Calgary-based junior oil and gas company, had several properties throughout Alberta comprising both solely controlled and joint ventures. The president and chief executive officer (CEO) was involved in the construction of a well on the Ferrier property — a joint venture between three companies, each holding roughly one-third of the stake. As part of the joint venture, Yangarra had signed an agreement that committed Yangarra to cover all expenses proportional to its working stake of 31.875 per cent. The well had been drilled at a higher cost than expected, with many charges not yet recorded or incurred. As a result of the cost overruns, Yangarra had been asked to provide more funding to the project. In deciding whether to commit additional resources to the Ferrier well, the CEO had to consider several factors including an existing gross overriding royalty revenue (GORR) agreement, uncertainty in estimating the recoverable quantity of oil, crown royalties, and a current legal dispute.

The general manager of Craig Manufacturing Cambridge Branch felt that there was room to improve top-line growth through better utilization of plant capacity. The company was losing out on sales due to the highly seasonal nature of demand; the plant was fully loaded four months of the year, but it had unused capacity during the remaining months. The general manager had just attended a lecture where a more flexible approach to pricing had been suggested as a way to better manage supply chain and capacity issues. An idea began to emerge: Could Craig Manufacturing use pricing to better match demand to plant capacity? If so, would this practice boost profitability, or would it merely reduce revenues?

The president of Oakville Hydro Energy services needed to make a decision on the installation of an electricity-generating engine at the regional municipal Wastewater Treatment Plant in Burlington, Ontario. This engine installation was in support of the production of green power, by which the Ontario Power Authority (OPA) introduced a feed-in tariff that paid a premium for the generation of this type of green power. One of three specific engines would be purchased and installed to generate electricity from the combustible gases produced during wastewater treatment. The president had to decide which engine generator would produce the most favourable output and the best return for Oakville Hydro and the municipality. The president also needed to decide whether or not to integrate the existing on-site gas storage tank into the controls of the generator system.

The chief leasing officer (CLO) of Arthur Hill & Company was preparing Sunrise Atrium (a commercial property currently in the company's portfolio) for sale. Currently, many of the tenants of the building had signed long-term leases that still had time to run but were significantly below market rates. The CLO believed that the majority of potential buyers of Sunrise Atrium would use the cap rate method of valuation, which made the future net operating income (NOI) a key component of the valuation and hence the sale price. To improve the value of the building, the CLO was considering offering a "rent holiday" to selected tenants as a way of raising some leases to market rates. To determine if it made business sense, the CLO identified the key success factors to be the choice of tenants eligible for the holiday and the duration of the holiday. His goal was to develop a lease reconfiguration plan that would add value to investors.

Solution Method 1 Excel spreadsheet.

Solution Method 2 Excel spreadsheet.