1. MGMT 530
Lynn M. Peirce
LMP91357@aol.com
Course Project
February 8, 2015
Workforce Reduction at Thermal Chek

2. Table of Contents.
1. Title
2. Table of Contents
3. Executive Summary
4. Decision Problem Overview
5. Objectives Summary
6. Alternatives Description
7. Selection
8. Consequence Table: Workforce Reduction
9. Ranking Alternatives.
10. Ranking Alternatives: Workforce Reduction
11. Scoring
12. Scoring Model: Workforce Reduction
13. Weighted Scoring Model
14. Weighted Scoring Model: Workforce Reduction
15. Weighted Scoring Model Results
16. Calculations for Weighted Scoring Model
17. Note: Factory Manager’s Calculations
18. Risk Profile
19. Risk Profile: Workforce Reduction
20. Risk Profile Explanation
21. Implementation, Monitoring, & Control
22. Timeline: Materials Implementation Plan
23. Summary
24. Cited Works

3. Executive Summary.
This report details the decision facing the owner of
a small window factory called Thermal Chek, located
in Westville, N. J. The owner must cut costs in order to
remain in operation. The owner has to decide whether or
not to reduce the workforce in order to save money. Key
points are addressed regarding the decision process, which
ultimately lead to a viable alternative for cost-cutting.

4. Decision Problem Overview.
• Company currently has about 100 employees
• Most work in production
• Need to keep up with local competitors
• Question of losing customers
• Question of losing other employees
• Owner must cut costs

5. Objectives Summary.
• Owner developed objective statement
• Separated fundamental objectives from means objectives
• Addressed three main stakeholders: company, employees, customers
• Fundamental objectives: reduce costs, maintain production, keep
customers
• Means objectives: correlate to fundamental objectives
1. lay off employees, cut back immediate hiring, terminate
employees
2. adjust work schedules, increase workload, employ only
part-time workers
3. keep production levels constant, scale back hours of
non-production employees, lower window prices

6. Alternatives Description.
“Making a decision implies that there are alternative choices to be
considered” (Harris, 2012).
 Owner defined alternatives in best interests of stakeholders
 Narrowed alternatives down to three
1. Hire temporary workers: allows owner to maintain production
levels on as-needed basis
2. Close factory during off-peak periods: company can maintain
employee status-quo while cutting costs during such months as
August, January, & February
3. Trim budget in other areas: allows owner to cut costs while
maintaining production
 Alternatives give owner more flexibility

7. Selection.
In selection, owner must “integrate all of the valuable
information…collected from different sources” (Make a Future, 2014).
• Owner must consider best options for his decision
• Consequence table was developed to aid owner with decision
• Consequences of closing during off-peak periods may mean losing
customers
• Trimming budget in other areas may enable company to keep
employees and customers
• Hiring temporary workers could be beneficial to company in
reducing costs, but it might have negative impact of losing
customers

8. Consequence Table: Workforce Reduction
Objectives Alternative A Alternative B Alternative C
Objective 1 Hire Temp Close During Trim Budget
Reduce Costs Workers 1 Off- Peak 1 Other Areas 2
Objective 2 Hire Temp Close During Trim Budget
Maintain Workers 2 Off-Peak 4 Other Areas 1
Production
Objective 3 Hire Temp Close During Trim Budget
Keep Workers 3 Off-Peak 4 Other Areas 1
Customers
Legend: 1=Best, 5+Worst

9. Ranking Alternatives.
 Author found simple way to rank owner’s alternatives
 Suggested alternatives were ranked by number to best suit company
needs
 Best “ranked” alternative with regard company’s objectives:
trim budget in other areas
 Alternatives ranked in table format

10. Ranking Alternatives: Workforce Reduction
Objectives Alternative A Alternative B Alternative C
Objective 1 Hire Temp Close During Trim Budget
Reduce Costs Workers 2 Off- Peak 3 Other Areas 2
Objective 2 Hire Temp Close During Trim Budget
Maintain Workers 2 Off-Peak 5 Other Areas 1
Production
Objective 3 Hire Temp Close During Trim Budget
Keep Workers 5 Off-Peak 5 Other Areas 1
Customers
Legend: 1=Best, 5+Worst

11. Scoring.
 Simple scoring model developed
 Aids owner with decision
 Scores were assigned based on owner’s input
 Table reflects these “scores”

12. Scoring Model: Workforce Reduction
Objectives Alternative A Alternative B Alternative C
Objective 1 Hire Temp Close During Trim Budget
Reduce Costs Workers 1 Off- Peak 2 Other Areas 1
Objective 2 Hire Temp Close During Trim Budget
Maintain Workers 2 Off-Peak 5 Other Areas 4
Production
Objective 3 Hire Temp Close During Trim Budget
Keep Workers 5 Off-Peak 5 Other Areas 1
Customers
TOTALS 8 12 6
Legend: 1=Best, 5+Worst

13. Weighted Scoring Model.
Weighted scoring is a “method of scoring options against a prioritized
requirements’ list to determine which option best fits the selected
criteria” (Zimmer, 2014).
 Provides way for Thermal Chek to put semblance of activity into
subjective process
 Included by author to aid owner in further evaluation
 Question: Which alternative most closely suits company’s needs?

14. Weighted Scoring Model: Workforce Reduction
Objectives Weight Alternative A Alternative B Alternative C
Objective 1 30% Hire Temp Close During Trim Budget
Reduce Costs Workers 1 Off- Peak 2 Other Areas 1
Objective 2 30% Hire Temp Close During Trim Budget
Maintain Workers 2 Off-Peak 5 Other Areas 4
Production
Objective 3 40% Hire Temp Close During Trim Budget
Keep Workers 5 Off-Peak 5 Other Areas 1
Customers
TOTALS 8 12 6
Legend 0-100% importance; 1=Highest, 5=Lowest
(Alternatives Total from Scoring Model Table)

15. Weighted Scoring Model Results.
 Alternative C has lowest weighted score = Best Alternative
 Eliminate Alternative B
1. dominated alternative
2. might cause customer loss
3. could also be an “even swap”?
4. could cut costs, maintain production levels, keep customers
5. could also do the opposite, so may be considered as “trade-off”

16. Calculations for Weighted Scoring Model.
(Owner determined keeping customers was most important)
.30 x 8 = 2.4 .30 x 12 = 3.6 .30 x 6 = 1.8
.30 x 8 = 2.4 .30 x 12 = 3.6 .30 x 6 = 1.8
.40 x 8 = 3.2 .40 x 12 = 4.8 . 40 x 6 = 2.4

17. *Note: Author consulted with factory manager on weighted scoring
model as to calculations:
• Heated debate ensued
• Factory manager came up with own figures (see below)
• Outcome was same: Alternative C
Alternative A= 0.30 x 1 +0.3 x 2 + 0.4 x 5 = 0.3 +0.6 + 2 = 2.9
Alternative B = 0.30 x 2 +0.3 x 5 + 0.4 x 5 = 0.6 +1.5 + 2 = 4.1
Alternative C= 0.30 x 1 +0.3 x 4 + 0.4 x 1 = 0.3 +1.2 + 0.4 = 1.9

18. Risk Profile.
 Identifies acceptable level of risk company is prepared to accept
 Determines effects on overall decision-making strategy
 Risk & uncertainty: not the same
 Causes of uncertainty: factors in close proximity easier to estimate
than factors that might occur down the line
 Owner considers using different materials in production (i.e., trim
budget in other areas)
 Owner faces two Uncertainties
1. Would production quality suffer if different materials were used?
2. Would company lose business to competitors?

19. Risk Profile: Workforce Reduction
Uncertainty 1
Outcome Chance Consequences
Production 20% Inferior Products
Quality
Production
Reduction 35% Lower Prices
Uncertainty 2
Outcome Chance Consequences
Effects on 20% Longtime
Loyal Customer Loss
Customers
Effects on 25% Gain New
Potential Customers
Customers
Legend 0-100%

20. Risk Profile Explanation.
Percentages based on conversations with factory manager
 Possible consequences (bad and good)
1. Uncertainty 1: inferior products vs. lower prices
2. Uncertainty 2: customer loss vs. customer gain
 Trim budget in other areas – appears to be correct decision
 Owner can offset use of cheaper production materials, lower costs
can be passed onto consumers

21. Implementation, Monitoring, & Control.
 Owner targets March 15, 2015 to begin use of new production
materials
 Allows 30 days for phase-out of current production materials
 Owner designates factory manager to oversee implementation &
control
 Factory manager uses pre-designated employees to inspect new
products
 Sales manager reports on sales of new products
 180 Day period for implementation plan & review
 Owner meets with factory manager & sales manager
 Determination will be made as to usage of new production materials

22. Timeline: Materials Implementation Plan
Month/Timeframe Implementation Plan
30 Days Current Materials
Phased Out
March 15, 2015 New Materials Phased In
180 Days Factory & Sales Managers
Meet With Owner for
Review

23. Summary.
Thermal Chek must cut costs. At the onset of this report, the owner
was leaning towards one decision, that of workforce reduction. From the
information presented, the owner was able to see and consider a viable
cost-cutting alternative by using new production materials. The main
objective in this situation is keeping customers. Using new production
materials facilitates the right decision. This enables the owner to keep
the workforce intact while lowering costs. The company can then pass
lower prices on to customers. This can create a “win-win” situation for
all.

24. Cited Works.
Harris, Robert. (June 9, 2012). Virtual Salt.
Introduction to Decision Making.
Retrieved on January 14, 2015 from
http://www.virtualsalt.com/crebook5.htm.
Make a Future, (2014). Making the Selection Decision.
Retrieved on January 20, 2015 from
http://www.makeafuture.ca/for-employers/employees
the-hiring-process/making-the-selection-decision.
Zimmer, David A., PMP. (2011)
Project Management Terms & Definitions.
What is the Weighted Scoring Method?
Retrieved on January 21, 2015 from
http://terms.ameagle.com/2011/01/david.html.