Case Studies and Practical Applications
Case Studies and Practical Applications is the integrative section: a narrative scenario requiring two or more techniques and a stated recommendation. Marks are for structure - identify the decision, isolate relevant data, apply the technique, and interpret the result.
What a case asks
Typical cases combine a product mix under a limiting factor, a make-or-buy with opportunity cost, a process loss with abnormal gain, or a variance analysis followed by a comment on responsibility. Read the requirement before the data so you know which figures matter.
Approach
- Identify the decision and the technique it needs.
- Build a statement in a standard order so the examiner can follow the arithmetic.
- Label every figure with its unit, and show workings.
- Close with one or two sentences of interpretation and any assumption.
Worked example
Machine hours available: 10,000. Per unit: A contribution ₹30, 3 hours, demand 1,500; B contribution ₹40, 5 hours, demand 1,000; C contribution ₹24, 2 hours, demand 2,000. Contribution per machine hour: A ₹10, B ₹8, C ₹12. Rank C, then A, then B. C: 2,000 × 2 = 4,000 hours. A: 1,500 × 3 = 4,500 hours. Total 8,500 hours, leaving 1,500 hours for 300 units of B. Total contribution = (2,000 × 24) + (1,500 × 30) + (300 × 40) = ₹48,000 + ₹45,000 + ₹12,000 = ₹1,05,000. Fixed costs are unchanged, so this mix maximises profit; demand, not capacity, now limits B.
Traps
Ranking by contribution per unit, which would wrongly put A first; ignoring demand ceilings; treating allocated fixed overhead as relevant; and presenting figures without the recommendation the case explicitly asks for.