Monday, October 29, 2012

Working On A Team

Working On A Team
In this blog I will detail two experiences I have had in working on a team. The first experience was at work several years ago, it was an operation that ran very smoothly and had many people involved. The second experience was not as successful, I was on a committee for a student organization that had to organize a large event however the process did not run smoothly.

The first experience was at the supermarket where I worked, it was the day before Christmas (the day of Christmas Eve) and the company had an extremely large number of catering and pick-up orders. The company's typical procedure for catering and pick up was not designed to run on such a large scale and as such they had to adapt to a different system for the day. Many employees received roles different than they were used to or were in different departments than usual. There was a new system of supply chain in which one department would work to record orders, send them to another department for preparation, then another department would pick up the orders and put them in storage or prepare them for delivery. This was all done on a very short time frame due to the perishable nature of the product combined with a vast quantity of orders. The operation was very high-paced and the customers in this situation had very low tolerance for mistakes because it was the holidays. The company designed an excellent system to meet these demands and department managers selected apt employees to perform new roles, it mostly went off without any issues and almost all customers were satisfied except for a few difficult ones. It was certainly a stressful operation but due to the high-pace there was no time for complaining or bickering. Every department was appropriately staffed and stocked with correct inventories. Overall, it was a success but certainly a stressful and exhausting day for all the people involved.

In another experience I was involved with a project for a student organization in which I had to work on a committee to organize a large event for several hundred people. There was a short time frame in which it needed to be organized and it had many facets. First we needed to collect money from group members for the budget, we then had to plan out the schedule for the night, purchase all goods and rent out spaces, notify everyone of the plan, and finally make sure it ran smoothly the night of. Everybody on the committee had other commitments and schoolwork that week and the success of the event wasn't everyone's top priority. This was one aspect that added tension to the process. Another aspect that made it difficult was people didn't have assigned roles it was just a general planning committee. As the event got closer, it was up to us to motivate other club members to help set up the actual event which was very difficult as they did not believe they had a mandate to assist. A major source of tension was bickering over distribution of the budget and how it should've been spent. Many people disagreed on what should have been purchased and in what amounts.

In the end the event was satisfactory but it did not reach its potential. There were many issues with efficiency, budgeting, and general planning and preparation. Tensions were high and stubborn personalities did not help. The fact that the organization was more informal may have contributed to this. In a workplace setting where your job and source of income may be on the line if you fail at your task, there is much more motivation to succeed. I believe that is the primary difference between the success of the first example and the mediocrity of the second example. Many of the committee member's priorities that week were unrelated to the event and because of this it took a back-seat to most other things in their lives.

Thursday, October 18, 2012

Team Production

Team Production
I think a good example of team production relating to this article would be that of the activities of a custom automobile shop. Let's take a hypothetical example where the auto shop receives a complex order from a wealthy customer. The customer wants a special engine and transmission which requires the work of the specialized mechanic in the shop. The order also required a state-of-the-art sound system which is handled by the audio specialist. The customer desired low-profile tires and chrome rims which requires the work of the tire specialist. Lastly the customer wanted a designer interior and a custom paint job, both of which require the interior specialist and the exterior designer.

We have established 5 unique roles. The mechanic, the audio technician, the tire specialist, the interior designer, and the exterior designer. These 5 roles are unique and held by experts in their field. The customer came to them because they are the only ones who could fulfill his order. In this situation there would be no ability to outsource any work to a third party. Also, without one of these 5 men putting in their work, the product will be unfinished and the customer will unsatisfied and not purchase it. Each individual job in this case turns out to be balanced so that no worker is putting in a substantially greater amount of time or effort than any other and all of the workers have the same amount of experience in their respective field so that none of their work is more valued than another.

When it comes time to deliver the auto to the customer, he is satisfied and pays them a large check for their work. After all material expenses are subtracted each worker receives a percentage cut of the commission of the sale. All workers are satisfied with their cut and take the money happily. This is an example of what seems to be near-perfect cooperation in team production. All inputs equally value their own labor with their partners labor and the customer values their labor equally as well. In this situation it was completely necessary for all workers to cooperate to receive their cut, nobody would receive any money if not all aspects of the project were completed.

While this example seems to show that team production is fair, balanced, and maximizes total utility, there were several assumptions that were made to reach that conclusion that may not always hold. In reality, these workers may not all be perfectly equally experienced or work the same amount of time on the project and these would be major causes for a different distribution of payment that may result in inequalities.

The conclusions made in the article are somewhat similar to this because I believe this example demonstrates that income distribution will be fair in perfectly balanced circumstances but these are so rare that inequalities are bound to develop.

Wednesday, October 3, 2012

Transfer Pricing in A University Setting

Transfer Pricing in A University Setting

The concept of "Illinibucks" as a method of revenue for the University of Illinois and as a source of utility for its students is quite simple. At a large university such as the University of Illinois, a perennial problem of students is missing out on opportunities or having to wait longer periods due to the quantity of students attracted to similar things. Some examples of this include waiting for line at university dining centers, such as the Ikenberry Commons, priority for housing selection to receive placement in the public dorm of ones choice, selecting courses for the semester, making appointments with academic advisors, and scheduling appointments at Mckinley Health Center. If students had Illinibucks prepaid on their I-cards they would be able to enter the Ike through a separate line while paying a fee. For housing selection students could send in Illinibucks with their application and administrators would place their applications on the top of the pile. For appointments with academic advisors and Mckinley Health Center, students could pay a preliminary fee of Illinibucks and then have a separate appointment scheduling process in which they have priority over students who did not pay a fee.

It is unlikely that I would purchase Illinibucks if given the option. However, if I was to purchase them I would spend them when making appointments with Mckinley. In my personal experience, Mckinley has been slow and difficult to schedule with in almost all instances and if Illinibucks were to make this process easier I would consider using them for it. For the other examples I would doubtfully pay the fee for the Illinibucks as I personally do not equate enough utility with the benefits.

If the administered price of Illinibucks was too low it would attract too many students. There are two issues that could arise from this. In the dining hall line example, students pay for Illinibucks to skip the line when they don't want to wait. However, they still must pay for their meal and be checked into the dining hall, if this was to occur in a separate line, then the students using Illinibucks would have a longer line and the original purpose would be partially negated. With the Mckinley example, if many students had priority registration for appointments then non-Illinibuck students would have to be pushed out further and further creating a massive scheduling mess for Mckinley and students.

If the administered price of Illinibucks was too high the social cost and negative externality of the good would likely lead to the administration canceling the program. Many students who attend on scholarship or do not have much disposable income available to them would likely protest Illinibucks because it would allow wealthier students access to services that they are unable to access.