SUNConferences, SAIIE NeXXXt

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A systems approach to operational and business decision making
Pieter Pretorius

Last modified: 2019-08-29

Abstract


The PQ problem was published back in 1990 by Goldratt. This problem is provided to master’s level students a few weeks before starting an Operations Management course. The performance statistics collected from three South African (since 2016) and one European business school (from 2018 onwards) do not make for good reading. Until now only 2.4% (39 students from the sample of 1 649 students) were able to answer both questions correctly. In addition, some of the students were not able to justify their correct decisions.

This paper will explore the differences between traditional, cost-based methods of decision making for day-to-day operational- and improvement decisions as practiced by many companies today, hence the bad performance by the students, and taking a systems approach to decision making. The paper will argue for taking the systems approach as a real alternative without which alternative realities will just remain a dream.