MIT Libraries homeMIT Libraries logoDSpace@MIT

MIT
View Item 
  • DSpace@MIT Home
  • MIT Libraries
  • MIT Theses
  • Graduate Theses
  • View Item
  • DSpace@MIT Home
  • MIT Libraries
  • MIT Theses
  • Graduate Theses
  • View Item
JavaScript is disabled for your browser. Some features of this site may not work without it.

A management science approach for developing a decision model for portfolio rationalization of consumer personal computers

Author(s)
Whigham, Paul Alexander
Thumbnail
DownloadFull printable version (5.957Mb)
Other Contributors
Leaders for Global Operations Program.
Advisor
Özalp Özer and Bruce Cameron.
Terms of use
M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission. http://dspace.mit.edu/handle/1721.1/7582
Metadata
Show full item record
Abstract
Commoditization of the PC market has led to a shift in strategy at Dell away from customization towards defining specific consumer configurations ahead of time. This shift creates new planning and decision processes around which configurations to select. Given configurations are defined before true demand can be measured, variability leads to selection of configurations based on imperfect knowledge. The existing variety of configurations has imposed substantial complexity costs on Dell. Modeling this selection process as a Newsvendor "life-time buy" includes this variability while optimizing for profit. Estimated costs of overage, costs of underage, and complexity costs are used as inputs. This thesis seeks to develop a framework informing configuration selection decisions based on demand variability and expected profit. A heuristic model uses configuration volume estimates, profit margin estimates, and historical regional bias in submitted forecasts to score and rank potential configurations. This heuristic determines which configurations to select within a fixed maximum total number of configurations limit, based on the business's market share growth and profit goals. This maximum limit is set by Dell's Vice Chairman Jeff Clarke. The results of this heuristic show a decrease in decision process time, an increase in process transparency, and increase in expected profit. A what-if scenario analysis shows an annual increase of 3.4% in profit which amounts to several million dollars. These results were gathered through implementing the model in November 2014 and comparing the heuristic-based decisions against past process decisions.
Description
Thesis: M.B.A., Massachusetts Institute of Technology, Sloan School of Management, 2015. In conjunction with the Leaders for Global Operations Program at MIT.
 
Thesis: S.M., Massachusetts Institute of Technology, Engineering Systems Division, 2015. In conjunction with the Leaders for Global Operations Program at MIT.
 
Cataloged from PDF version of thesis.
 
Includes bibliographical references (page 47).
 
Date issued
2015
URI
http://hdl.handle.net/1721.1/99038
Department
Leaders for Global Operations Program at MIT; Massachusetts Institute of Technology. Engineering Systems Division; Sloan School of Management
Publisher
Massachusetts Institute of Technology
Keywords
Sloan School of Management., Engineering Systems Division., Leaders for Global Operations Program.

Collections
  • Graduate Theses

Browse

All of DSpaceCommunities & CollectionsBy Issue DateAuthorsTitlesSubjectsThis CollectionBy Issue DateAuthorsTitlesSubjects

My Account

Login

Statistics

OA StatisticsStatistics by CountryStatistics by Department
MIT Libraries homeMIT Libraries logo

Find us on

Twitter Facebook Instagram YouTube RSS

MIT Libraries navigation

SearchHours & locationsBorrow & requestResearch supportAbout us
PrivacyPermissionsAccessibility
MIT
Massachusetts Institute of Technology
Content created by the MIT Libraries, CC BY-NC unless otherwise noted. Notify us about copyright concerns.