Merton Truck Solns
DXX
I NDIAN I NSTITUTE
A HMEDABAD
OF
M ANAGEMENT
IIMA/QM-xxx
Merton Trucks Case Note
Abstract
We discuss Merton Trucks [Dhe90a] as a case to introduce linear programming in the MBA program. This case adapted from Sherman
Motor Company case, was used to introduce Linear Programming formulations as well as duality. Refer to the teaching note [Dhe90b].
Our approach differs from the approach suggested by
Dhebar [Dhe90b]. First, our audience consists pre-dominantly of engineers with not too much work experience. As a result, handling math and algebra is relatively easy. Explaining the algebraic formulation, graphical approach and using the Excel solver do not consume that much time. Second, because this case is used during the first week of the MBA program, students are still unfamiliar with the case methodology and we spend significant time in understanding case facts. The circular logic used in allocating fixed costs based on the product mix that in turn is used in deciding the product mix takes some time to understand. Third, because of the participant background, they have difficulty in translating the model to the specific business situation and interpreting the trade-offs involved in various what-if analyses that are prompted by the case questions.
We return to the case when we teach duality. After explaining duality, we analyze the case to show how some of the questions and what-if analyses can be simplified using duality.
This note is based on our experiences with teaching three large batches of students in our MBA programs.
Prepared by Ravindra S. Gajulapalli and Diptesh Ghosh.
Teaching material of the Indian Institute of Management, Ahmedabad, prepared as a basis for class discussion.
Copyright c 2006, Indian Institute of Management, Ahmedabad.
1
1 Without Duality: (2 × 70) minutes
We use the case to illustrate the following issues:
• Analyze case facts:
– What is the factual basis for some of the opinions expressed?
– Where did the overhead cost
I NDIAN I NSTITUTE
A HMEDABAD
OF
M ANAGEMENT
IIMA/QM-xxx
Merton Trucks Case Note
Abstract
We discuss Merton Trucks [Dhe90a] as a case to introduce linear programming in the MBA program. This case adapted from Sherman
Motor Company case, was used to introduce Linear Programming formulations as well as duality. Refer to the teaching note [Dhe90b].
Our approach differs from the approach suggested by
Dhebar [Dhe90b]. First, our audience consists pre-dominantly of engineers with not too much work experience. As a result, handling math and algebra is relatively easy. Explaining the algebraic formulation, graphical approach and using the Excel solver do not consume that much time. Second, because this case is used during the first week of the MBA program, students are still unfamiliar with the case methodology and we spend significant time in understanding case facts. The circular logic used in allocating fixed costs based on the product mix that in turn is used in deciding the product mix takes some time to understand. Third, because of the participant background, they have difficulty in translating the model to the specific business situation and interpreting the trade-offs involved in various what-if analyses that are prompted by the case questions.
We return to the case when we teach duality. After explaining duality, we analyze the case to show how some of the questions and what-if analyses can be simplified using duality.
This note is based on our experiences with teaching three large batches of students in our MBA programs.
Prepared by Ravindra S. Gajulapalli and Diptesh Ghosh.
Teaching material of the Indian Institute of Management, Ahmedabad, prepared as a basis for class discussion.
Copyright c 2006, Indian Institute of Management, Ahmedabad.
1
1 Without Duality: (2 × 70) minutes
We use the case to illustrate the following issues:
• Analyze case facts:
– What is the factual basis for some of the opinions expressed?
– Where did the overhead cost
References: [Dhe90a] Anirudh Dhebar. Merton truck company. Case 9-189-163, Harvard Business School, HBS Publishing, Boston, MA 02163, apr 1990. [Dhe90b] Anirudh Dhebar. Merton truck company. Teaching Note 5189-171, Harvard Business School, HBS Publishing, Boston, MA 02163, may 1990. 8