Turkmenistan Petroleum
Individual Essay
Managerial Decision Required: Determine the number of seminars in each area that should be planned next year at the minimum total cost.
In order to accurately project the cost of required seminars and provide a feasible solution it is important to consider the restrictions or constraints affecting the model. Constraints affecting this model include the need for a minimum amount of seminars being conducted at each site (X1>=3, X2>=10, X3>=5, X4>=14) respectively. The cost between each of the site varies greatly. Through looking at the image below you can see the staggering cost difference between sites. For example Training Area 3 costs $12,000 for 3 days (4k/day) of training whereas TA1 costs $15,000 for 5 days of training (3k/day). Turkmenistan Petroleum’s awareness that cost differences for each site and the effective management of these sites can save the corporation as a whole a great deal of money through effectively managing the cost of mandatory training seminars.
After analyzing the constraints present in the Turkmenistan Petroleum case study the number of seminars that should be held in each area to minimize cost to Turkmenistan Petroleum are as follows.
Training Area #1 | Training Area #2 | Training Area #3 | Training Area #4 |
3 | 10 | 5 | 22 |
The distribution above gives Turkmenistan Petroleum 40 seminars that take up no more than 180 days of the company calendar. The distribution of these courses/sites costs the company as a whole $327,000 to accomplish their training. The cost savings to Turkmenistan Petroleum is dramatic. If Turkmenistan were to book all 180 days of training at TA #4 the cost would exceed $1,000,000.