Introduction

Abstract

What do the following situations have in common?

• The Arabian Light Metals Company (ALMC) is the largest producer of aluminium bars in Kuwait. The bars are used by local industry to produce aluminium doors, windows and sheeting for kitchens and bathrooms. The company has around 35 per cent of the domestic market but is facing increasing competition from foreign manufacturers. The bars are made from a mixture of pure materials and recycled materials. Some of the recycled supply comes from the company’s own manufacturing process. A second source is the metal scrap market in Kuwait where scrap aluminium can be bought. The combination of pure and recycled materials has to be carefully controlled to ensure appropriate quality of the final product. There is a finite supply of recycled material. There is also a finite demand for this product in Kuwait. The company is keen to control its costs and increase its profitability. It is trying to decide on the appropriate quantities of pure metals and recycled scrap to be used in production that will keep its costs to a minimum and at the same time meet the required quality standards.

• Health service planners in Rome are trying to plan the home-care service provided to AIDS patients. The service includes medical care and social care support. The public sector organizations providing such care must work within fixed budgets and within existing staff levels. They are expected to meet, or exceed, minimum standards in terms of the care provided. However, there is uncertainty over the future number of patients who will need such care service and over the type and amount of care that any individual patient will require. The planners are trying to ensure that the maximum number of patients receive care to the standards required but within the limits of existing budgets and staffing levels.

• The US airline company, Delta Air Lines, has around 2500 domestic flights to organize each day with some 450 aircraft of different types and sizes available. If one of the company’s aircraft takes off with empty seats this represents lost revenue. On the other hand, aircraft which take off full, leaving passengers behind who could not get a seat, also represent lost revenue. Assigning the right aircraft type to the right flights is therefore critical but increasingly difficult given uncertainties over passenger demand. The company is trying to ensure it maximizes the revenue earned from passengers whilst keeping its operating costs as low as possible.