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Decision Making Problem

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The question involves the examination of a possible change in operating conditions that does not involve a change in capital outlay. Hint first determine is this an annual cost only or does the present value need to be accounted for.

A concentrator with a nominal $12,000 tonne per day capacity operated 360 days a year. The grinding circuit consists of three parallel circuits. Each circuit needs o be shut down for relining at 4 month's intervals. The current method of relining takes five days to complete and cost $30,000 in consumable supplies. A proposed alternative method is under investigation and would involve a 2 day shut down and cost $190,000 in consumable supplies.

Should the alternative method be used if the following conditions apply:

1. Milling reserve, a minimum of 9 years supply at a head grade of 1.2%
2. Performance of the concentrator at 1.2% head grade is 92%, with the concentrate grading at 28% of the mineral (on a dry basis) and 10% moisture
3. The selling price is not likely to go below $1.5 per kg
4. The operating costs below are applicable

General overheads fixed $12,000 per day
Mining fixed costs $40,000 per day
Mining variable costs $2.00 per tonne milled

Milling Fixed costs $24,000 per day
Milling variable costs (grinding media and power) $1.00 per tonne milled

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Solution Summary

It is a cost & profitability driven decision making problem on ore processing.

See Also This Related BrainMass Solution

Decision Making Process: Individual Vs Group

(Scenario) The CEO of your company has been extremely frustrated with what has been occurring within the organization lately. In a recent managers meeting he exclaimed,

"Everyone around this place just follows the status quo. No one ever has any unique ideas on how we can make this organization better. You just sit here and wait for me to give you directions on what to do. Then you follow those directions word-for-word without asking any questions or making any improvements. We need to change this attitude and change it quickly."

He then pointed out each of your group members stated, "I'm assigning you all to a working group. Your goal is to help me fix this problem. I want you to work together, do some research, and come up with concrete ideas and suggestions to fix this problem."

Your group must do analysis, have discussions (either via the small group chat or discussion board) and come to a consensus to prepare a report (paper) that addresses the following:

Part 1 - Define the term "group" after discussion with your fellow team members. Avoid repeating a dictionary definition. For this scenario what would constitute a "group"?

Part 2 - Are there any differences in how individuals and groups make decisions? If so what are they?

Part 3 - Identify the applicable decision concepts (theories, principles, paradoxes, etc.) from our learning all semester (not just the group decision concepts identified in Unit 5) that your group believes will best explain what is occurring within the organization. Be sure your group provides rational to support each of the concepts your group identifies.

Study Material The Psychology of Judgment and Decision making(Plous) Chapter 17-18 and earlier theories and thoughts concerning Decision Making concepts.

Part 4 - Identify at least three (3) recommendations (from your group to the CEO) that will help him improve or overcome the current decision making conditions within the organization.

thank you for your insight and professional thoughts.
very important group assignment. Best Regards

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