Models for collective decision making in industry

When actions are taken by individual managers within a firm to enhance certain performance criteria they may be found to have an adverse effect on other criteria. Changes in pricing policies and promotional activity, modifications in product design, increased mechanisation of production processes or operations, etc., are just examples of actions which in general do not have equally desirable consequences on the most commonly pursued objectives within the company, such as that of reducing unit costs, or those of increasing turnover, market share, profit levels and return on capital employed.In this paper simple models are developed and analysed, each enabling the user to assess explicitly the effects on the unit cost; the revenue and the profit of combined changes imposed on the system by management decisions or by external factors. It is suggested that these models be used as a basis for discussion by the managers involved with a view to reaching a consensus as to the desirable decisions that should be taken.