HRM 3400 Chapter Notes - Chapter 11: Statoil, Satisficing
23 May 2018
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HRM 3400 Chapter 11 Notes – Summary
Introduction
• Today, decision support systems help solve many nonprogrammed decisions, in which
the problem is not routine and rules and relationships are not well defined
(unstructured or ill-structured problems).
• These problems can include deciding the best location for a manufacturing plant or
whether to rebuild a hospital that was severely damaged from a hurricane or tornado.
Optimization, Satisficing, and Heuristic Approaches
• In general, computerized decision support systems can either optimize or satisfice.
• An optimization model finds the best solution, usually the one that will best help the
organization meet its goals.
• For example, an optimization model can find the best route to ship products to markets,
given certain conditions and assumptions.
• StatoilHydro, a Norwegian oil and natural gas organization, used optimization software
called GassOpt that not only helped the organization minimize shipping costs for natural
gas, but also helped executives determine new shipping routes.
• The optimization application has saved the organization, which is partially owned by the
country of Norway, about $2 billion since its development.
• Laps Care is an information system that used optimization to assign medical personnel
to home healthcare patients in Sweden while minimizing healthcare costs.
• The optimization system has improved the quality of medical care delivered to the
elderly.
• The system has also improved healthcare efficiency by 10 to 15 percent and lowered
costs by more than 20 million euros.
• In another case, Xerox has developed an optimization system to increase printer
productivity and reduce costs, called Lean Document Production (LDP) solutions.
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