A Large Consulting Firm Is Deciding on If Its Workforce

question 110

Essay

A large consulting firm is deciding on if its workforce should be expanded, maintained, or decreased. Suppose that demand is given in week long projects, and that a consultant can work on 3 projects each month (1 week off for personal leave and/or other duties such as conferences, etc). Currently there are 25 consultants. Ten consultants are trained for LEAN and 15 for Six Sigma, with 5 of those consultants being overlaps (the consultant is trained for BOTH LEAN and Six Sigma). Assume that all consultants can do the general work. Complete the table (the forecast period is an upcoming month) and prepare a recommendation.
$$\begin{array} { | l | c | c | c | c | c | } \hline \text { Category } & \begin{array} { c } \text { Best } \\\text { Forecast } \\\text { (\# } \\\text { projects) }\end{array} & \begin{array} { c } \text { Likely } \\\text { Forecast } \\\text { (\# } \\\text { projects) }\end{array} & \begin{array} { c } \text { Worst } \\\text { Forecast } \\\text { (\# } \\\text { projects) }\end{array} & \begin{array} { c } \text { Maxand in } \\\text { \# of } \\\text { people }\end{array} & \begin{array} { c } \text { Number of } \\\text { Qualified } \\\text { People }\end{array} \\\hline \text { LEAN } & 42 & 24 & 12 & & \\\hline \text { Six Sigma } & 45 & 36 & 30 & & \\\hline \text { General } & 75 & 60 & 57 & & \\\hline\end{array}$$

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Definitions:

Average Cost

The total cost of production divided by the number of units produced, indicating the cost per unit.

Consumer Surplus

The bifurcation between what a consumer wishes to pay for a service or good, and what ends up being spent.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual market price of the good.

Deadweight Loss

Deadweight loss refers to the loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable, often due to market distortion such as taxes or subsidies.