International Journal of Scientific Research Engineering & Technology (IJSRET), ISSN 2278 0882

Volume 4, Issue 8, August 2015

THE APPLICATION OF MANAGEMENT SCIENCE IN DECISION

MAKING AND FORECASTING IN MANUFACTURING COMPANIES
(PZ CUSSONS AS CASE STUDY)
Akintoye Oluwasegun Ogundiya1, Usman Jibril Wushishi2
1

(Department of Management Information Systems, Cyprus International University, Lefkosa, Cyprus

Email: erains4eva@yahoo.co.uk)
2
(Department of Management Information Systems, Cyprus International University, Lefkosa, Cyprus
Email: wushi09@live.com)

ABSTRACT
The primary aim of every business or organization is to
maximize profit with the most minimal cost using all the
available resources. Manufacturing can be defined as the
production of merchandise with the use of chemical and
biological processing, machines and labor, tools, or
formulation (1). It could refer to a range of human
activities but is commonly applied to industrial
production whereby raw materials are transformed into
finished goods on a large scale. PZ Cussons is a prime
producer of personal healthcare products and consumer
groups, having their markets around the continents of
Africa, Asia, and Europe. The need for PZ Cussons to
balance production in all their locations for all their
brands, in order to minimize excess (surplus) produces
with their resources is paramount to achieve success.
This project aims at applying Management Science
(Linear Programming) in the production for PZ Cussons
for maximum efficiency.
Keywords Constraints, Decision
Forecasting,
Linear
programming,
Research, Production.
I

Variables,
Operations

INTRODUCTION
A. A
BRIEF
INTRODUCTION
OF
MANAGEMENT SCIENCE
Management science can be defined as a branch
of applied mathematics designated to optimal decision
planning, with great bonds with economics, engineering,
business, and other sciences. Management science
enhances the organizations ability to authorize
meaningful management decisions by meeting optimal
or nearly optimal solutions to highly complex decision
tasks through the use of various strategies, scientific
research-based principles, and analytical methods such
as mathematical modelling, numerical algorithms, and
statistics. Management science is synonymously used
with Operations Research and Decision Science and
often regarded as the business uses of Operations
Research (2). The most prominent mathematical model

used in management science or operations research is the

use of linear programming to solve problems.In other
words it is the method of achieving best outcome (3).
Linear programming is a branch of mathematics which
concerns solving optimization problems. The problem
consists of a linear cost function (also called the
objective function) that is to be either minimized or
maximized with respect to a certain number of
constraints. These constraints are linear inequalities of
the used variables in the cost function. Further research
on management science led to lots of methodological
developments with the most significant using simplex
method to solve linear programming problems. This was
discovered by George Dantzig in 1947 with the intention
to solve the U.S. Air Force planning problems (4).
The main concern of Management Science is to
solve managerial flaws and aid in designing such models
to achieve maximum organizational excellence (5).
B. APPLICATIONS
OF
MANAGEMENT
SCIENCE
Basically, management science concentrates on the
development and application of concepts and models
which are useful in elucidating management issues and
solving managerial problems. Many operation
management decisions aim at utilizing the most effective
use of an organizations resources. Hence, linear
programming has been successfully applied in
operations management fields such as;
(i)
Transportation: e.g. schedule of school
buses to minimize the total distance covered
while transporting students i.e. to determine
the shortest route (Northwest corner
method).

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(ii)

(iii)

Banking: e.g. scheduling tellers to minimize

total labour cost while needs are met during
each hour.
Security: e.g. minimizing response time to
emergency calls by allocation of police
patrol units to areas with high crime rates.

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International Journal of Scientific Research Engineering & Technology (IJSRET), ISSN 2278 0882
Volume 4, Issue 8, August 2015

Maximizing an organizations profit by

selecting a product mix in a factory with
best use of machine and labour hour
available.
(v)
Minimizing total production and inventory
costs for a firm by developing a production
schedule satisfying future demands.
(vi)
Minimizing total shipping costs from
various warehouses to several selling points.
(vii)
Maximizing revenues by a leasing company
by allocation of space to a tenant in a new
shopping mall.
(ix)
Telecommunications e.g. number of calls
received, missed or waiting on the queue as well as
messages.
(x)
Identification of an Organization strategy that
has been adopted in terms of Information Systems
(6)
(iv)

C. PRODUCTION SCHEDULING
In order to supply customer needs and hearken
to market demand, most factories produce various
products.Scheduling simply means allocating resources
to various tasks (7). Every organization needs production
scheduling so as to remain in the competing market and
meet the customer needs. Scheduling is a vital tool for
both engineering and manufacturing as it could have
paramount impact on the productivity of a process. Its
aim in manufacturing is to minimize the production time
and costs and maximize the efficiency of operation and
reduce costs. One of the most important tasks of a
manager is production scheduling as a result of a
competitive market. Lots of methods have been
implemented in solving production scheduling problems,
one of which includes linear programming (8).
II

CASE STUDY
A. A GENERAL OVERVIEW OF PZ
CUSSONS
Founded in 1879 as Paterson Zochonis, PZ
Cussons is a principal manufacturer of personal
consumer goods and healthcare products. George
Paterson and George Zochonis started the company in
Sierra Leone as a trading post which enlarged its
operations into neighbouring Nigeria before the end of
the 19th century (9). PZ enlarged considerably around the
20th century with the acquisition of factories and
establishment of offices in Kenya and Ghana. The
company dominated Guinea commercially before 1958
(10) and acquired Cussons Group in 1975. In 1986, its
first factory was built in Thailand as offices and factories
were acquired in Asia and operations reaching Indonesia
in 1988. In 2002, a rename from Paterson Zochonis

plc.was made to PZ Cussons plc. The table below shows

the timeline of PZ Cussons.
B. OPERATIONS AND BRANDS OF PZ
CUSSONS
OPERATIONS
PZ Cussons operates in selected markets where they
believe they can capitalize on their local knowledge and
apply global know how and best practice; finding
opportunities and innovating to create market leading
products which are delivered to customers through their
fast and flexible supply chain. PZ Cussons have their
major market operations in Africa (one of the longestestablished and most thriving markets), Europe
(consisting interesting mix of categories and markets
with continued growth potential), and Asia (an exciting
balance of maturing and emerging markets with an
excellent opportunity for growth).
BRANDS
PZ Cussons are the business behind some of the worlds
best known brands with their success lying in their
unique approach in looking for new and better ways to
enhance customers lives. They major in five different
brands which includes Personal Care, Beauty,
Electricals, Food and Nutrition, and Home Care. Various
products are produced under each brand of PZ Cussons.
Personal Care: PZ Cussons develop innovative products
from well-known international brands like Imperial
leather, Cussons baby, and Carex to local brands like
Robb and Luksja, Mum & Me, Premier.
Beauty: The beauty brands make luxury more accessible
every day. The products include St. Tropez, Fudge,
Charles Worthington, and Sanctuary Spa.
Electricals: PZ trusted brand for 40 years Haier
Thermocool combines technology and innovation to
solve everyday household challenges, and a joint venture
operating in Lagos and Ghana (12). Their products are
the refrigerators, freezers, and washing machines.
Food and Nutrition: PZ Cussons improves lives and
communities with their unique and delicious food
products ranging from African milk drinks and organic
baby food to Greek olive oil. These products include Yo,
Coast, Nunu, Bliss, Raffertys garden, Benecol, Horio,
Minerva, and Mamador.
Home Care: By helping families keep their homes clean
and fresh for many years with their market-leading range
of home care products, PZ Cussons are the producers of
Morning Fresh, Zip, and Radiant.
C. THE APPLICATION OF MANAGEMENT
SCIENCE FOR PRODUCTION
AT PZ CUSSONS
At PZ Cussons, production is being planned in
the three regions. The business has an impact upon the

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International Journal of Scientific Research Engineering & Technology (IJSRET), ISSN 2278 0882
Volume 4, Issue 8, August 2015

environment, both through manufacturing and logistics

operations, hence, it must run in a way to minimize
adverse impacts and make positive contribution to
meeting global environmental challenges. Therefore, the
production is limited by both water allocated and
available electricity. For the purpose of this study,
production for the past three years shall be examined
(2011 2013), and a forecast for the next three years
(2014 2016).
It is agreed that each region will produce the same
proportion of its available land capacity. However, any
combination of brands may be produced at any of the
regions. The duty of the managers coordinating office is
to plan how many resources to devote to each brand at
the respective region while satisfying given restrictions.
PRODUCTION FOR THE YEAR 2011
The table below highlights the available land and water
allocation for the three regions.
Region

Usable
land Electricity
(acres)
allocation (kW)
Africa (1)
500
650
Asia (2)
320
300
Europe (3)
430
400
Table 1: Table showing the available land and electricity
allocation for the three regions
Below are the given brands to be produced in the three
regions, the total land quanto for each brand, the
electricity consumption for each brand, and the net
return from each brand.
Brands

Maximum
Electricity
land quanto consumption
(acres)
(kW/acre)

Net
revenue
(million
)
165

Personal
450
2
care
Beauty
300
1
105
Electricals
280
1
115
Food and 350
2
118
Nutrition
Home
250
1
123
Table 2: Brands to be produced in the three regions in
2011.
The management has decided that for each region,
specific constraints abound. It is said that for African
region, allocation for usable land, electricity and
maximum land quanto for Personal Care must be at most
20%, at most 47% for Personal Care, Beauty, and
Electricals, Personal Care and Beauty must not exceed

32%, and Beauty and Food & Nutrition must be at most

26%.
The objective is to maximize the total revenue for PZ
Cussons as a whole.
The table below shows the decision variables according
to the regions and brands to be produced at each region.
Regions
1
2
3
Brands
Personal care
X11
X12
X13
Beauty
X21
X22
X23
Electricals
X31
X32
X33
Food
and X41
X42
X43
Nutrition
Home
X51
X52
X53
Table 3: Decision variables according to regions and
brands for each region.
NOTE: Xij: number of production of brand i in region j.
Regions 1, 2, 3 represent Africa, Asia, and Europe
respectively
Objective function: Max Z = 165(X11 + X12 + X13) +
105(X21 + X22 + X23) + 115(X31 + X32 + X33) + 118(X41 +
X42 + X43) + 123(X51 + X52 + X53)
Constraints:
(Land constraint);
X11 + X21 + X31 + X41 + X51 500
X12 + X22 + X32 + X42 + X52 320
X13 + X23 + X33 + X43 + X53 430
(Electricity constraint);
2X11 + 1X21 + 1X31 + 2X41 + 1X51 650
2X12 + 1X22 + 1X32 + 2X42 + 1X52 300
2X13 + 1X23 + 1X33 + 2X43 + 1X53 400
(Land quanto constraint);
X11 + X12 + X13 450
X21 + X22 + X23 300
X31 + X32 + X33 280
X41 + X42 + X43 350
X51 + X52 + X53 250
Xij 0, i, j = 1, 2, 3, 4, 5.
The table below shows the calculated percentages for
each region according to the managements constraints.
Brands
Africa
Asia
Europe
Personal Care 100
45
60
Beauty
60
30
70
Electricals
75
35
55
Food
and 70
40
55
Nutrition
Home
85
65
40
Table 4: Calculated percentages for each region
according to Managements constraints.

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International Journal of Scientific Research Engineering & Technology (IJSRET), ISSN 2278 0882
Volume 4, Issue 8, August 2015

Hence, by substituting these values above into the

objective function;
Max Z = 165(X11 + X12 + X13) + 105(X21 + X22 + X23) +
115(X31 + X32 + X33) + 118(X41 + X42 + X43) + 123(X51 +
X52 + X53), we obtain the optimum value as thus:
Max Z = 165(100 + 45 + 60) + 105(60 + 30 + 70) +
115(75 + 35 + 55) + 118(70 + 40 + 55) + 123(85 + 65 +
40).
Max Z = 165(205) + 105(160) + 115(165) + 118(165) +
123(190)
Max Z = 33825 + 16800 + 18975 + 19470 + 23370
Max Z = 112,440m
PRODUCTION FOR THE YEAR 2012
The table below highlights the available land and water
allocation for the three regions.
Region

Usable
land Electricity
(acres)
allocation (kW)
Africa (1)
600
800
Asia (2)
300
375
Europe (3)
400
600
Table 5: Table showing the available land and electricity
allocation for the three regions

electricity and maximum land quanto for Food and

Nutrition must be at most 80, at most 36.67% for Food
& Nutrition and Personal Care, at most 25% for Personal
Care and Home, and Beauty and Home must not exceed
25% as well. For the European region, allocation for
usable land, electricity, and maximum land quanto for
Food & Nutrition must be at most 20, at most 20% for
Food & Nutrition and Electricals, Electricals and
Personal Care must not exceed 27.5%, and at most
17.5% for Personal Care and Beauty.
The objective is to maximize the total revenue for PZ
Cussons as a whole.
The table below shows the decision variables according
to the regions and brands to be produced at each region.
Regions
1
2
3
Brands
Personal care
X11
X12
X13
Beauty
X21
X22
X23
Electricals
X31
X32
X33
Food
and X41
X42
X43
Nutrition
Home
X51
X52
X53
Table 7: Decision variables according to regions and
brands for each region.

Below are the given brands to be produced in the three

regions, the total land quanto for each brand, the
electricity consumption for each brand, and the net
return from each brand.

NOTE: Xij: number of production of brand i in region j.

Regions 1, 2, 3 represent Africa, Asia, and Europe
respectively

Brands

Objective function: Max Z = 270(X11 + X12 + X13) +

230(X21 + X22 + X23) + 122(X31 + X32 + X33) + 135(X41 +
X42 + X43) + 100(X51 + X52 + X53)

Maximum
Electricity
land quanto consumption
(acres)
(kW/acre)

Net
revenue
(million
$)
270

Personal
600
3
care
Beauty
520
2
230
Electricals
350
1
122
Food and 200
2
135
Nutrition
Home
375
1
100
Table 6: Brands to be produced in the three regions in
2012.
The management has decided that for each region,
specific constraints abound. It is said that for African
region, allocation for usable land, electricity and
maximum land quanto for Food and Nutrition must not
exceed 100, both Food & Nutrition and Beauty must not
exceed 23.33%, Food & Nutrition and Home must be at
most 25%, and at most 20% for Personal Care and
Home. For Asian region, the allocation for usable land,

Constraints:
(Land constraint);
X11 + X21 + X31 + X41 + X51 600
X12 + X22 + X32 + X42 + X52 300
X13 + X23 + X33 + X43 + X53 400
(Electricity constraint);
3X11 + 2X21 + 1X31 + 2X41 + 1X51 800
3X12 + 2X22 + 1X32 + 2X42 + 1X52 375
3X13 + 2X23 + 1X33 + 2X43 + 1X53 600
(Land quanto constraint);
X11 + X12 + X13 600
X21 + X22 + X23 520
X31 + X32 + X33 350
X41 + X42 + X43 200
X51 + X52 + X53 375
Xij 0, i, j = 1, 2, 3, 4, 5.
The table below shows the calculated percentages for
each region according to the managements constraints.

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International Journal of Scientific Research Engineering & Technology (IJSRET), ISSN 2278 0882
Volume 4, Issue 8, August 2015

Brands
Africa
Asia
Europe
Personal
70
30
50
Care
Beauty
40
30
20
Electricals
30
15
60
Food
and 100
80
20
Nutrition
Home
50
45
35
Table 8: Calculated percentages for each region
according to Managements constraints.
By substituting these values above into the objective
function;
Max Z = 270(X11 + X12 + X13) + 230(X21 + X22 + X23) +
122(X31 + X32 + X33) + 155(X41 + X42 + X43) + 100(X51 +
X52 + X53), we obtain the optimum value as thus:
Max Z = 270(70 + 30 + 50) + 230(40 + 30 + 20) +
122(30 + 15 + 60) + 155(100 + 80 + 20) + 100(50 + 45
+ 35)
Max Z = 270(150) + 230(90) + 122(105) + 155(200) +
100(130)
Max Z = 40500 + 20700 + 12810 + 31000 + 13000
Max Z = 118,010m
PRODUCTION FOR THE YEAR 2013
The table below highlights the available land and water
allocation for the three regions.
Region

Usable
land Electricity
(acres)
allocation (kW)
Africa (1)
750
900
Asia (2)
380
550
Europe (3)
500
700
Table 9: Table showing the available land and electricity
allocation for the three regions
Below are the given brands to be produced in the three
regions, the total land quanto for each brand, the
electricity consumption for each brand, and the net
return from each brand.
Brands
Maximum
Electricity
Net
land quanto consumption
revenue
(acres)
(kW/acre)
(million
$)
Personal
650
3
185
care
Beauty
550
1
175
Electricals
390
2
121
Food and 270
1
85
Nutrition
Home
305
1
52
Table 10: Brands to be produced in the three regions in
2013.

The management has decided that for each region,

specific constraints abound. It is said that for African
region, allocation for usable land, electricity and
maximum land quanto for Food and Nutrition must not
exceed 100, both Food & Nutrition and Beauty must not
exceed 23.33%, Food & Nutrition and Home must be at
most 25%, and at most 20% for Personal Care and
Home. For Asian region, the allocation for usable land,
electricity and maximum land quanto for Food and
Nutrition must be at most 80, at most 36.67% for Food
& Nutrition and Personal Care, at most 25% for Personal
Care and Home, and Beauty and Home must not exceed
25% as well. For the European region, allocation for
usable land, electricity, and maximum land quanto for
Food & Nutrition must be at most 20, at most 20% for
Food & Nutrition and Electricals, Electricals and
Personal Care must not exceed 27.5%, and at most
17.5% for Personal Care and Beauty.
The objective is to maximize the total revenue for PZ
Cussons as a whole.
The table below shows the decision variables according
to the regions and brands to be produced at each region.
Regions
1
2
3
Brands
Personal care
X11
X12
X13
Beauty
X21
X22
X23
Electricals
X31
X32
X33
Food
and X41
X42
X43
Nutrition
Home
X51
X52
X53
Table 11: Decision variables according to regions and
brands for each region.
NOTE: Xij: number of production of brand i in region j.
Regions 1, 2, 3 represent Africa, Asia, and Europe
respectively
Objective function: Max Z = 185(X11 + X12 + X13) +
175(X21 + X22 + X23) + 121(X31 + X32 + X33) + 85(X41 +
X42 + X43) + 52(X51 + X52 + X53)
Constraints:
(Land constraint);
X11 + X21 + X31 + X41 + X51 600
X12 + X22 + X32 + X42 + X52 300
X13 + X23 + X33 + X43 + X53 400
(Electricity constraint);
3X11 + 2X21 + 1X31 + 2X41 + 1X51 800
3X12 + 2X22 + 1X32 + 2X42 + 1X52 375
3X13 + 2X23 + 1X33 + 2X43 + 1X53 600
(Land quanto constraint);
X11 + X12 + X13 600
X21 + X22 + X23 520
X31 + X32 + X33 350

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International Journal of Scientific Research Engineering & Technology (IJSRET), ISSN 2278 0882
Volume 4, Issue 8, August 2015

X41 + X42 + X43 200

X51 + X52 + X53 375
Xij 0, i, j = 1, 2, 3, 4, 5.
The table below shows the calculated percentages for
each region according to the managements constraints.

To forecast for the next three years for PZ Cussons, we

examined the relationship between the sets of previous
data. The table below shows the previous output of PZ
Cussons.
Output X2
Y2
XY
(Y)
2011
1
112.4
1
12633.76 112.4
2012
2
118
4
13924
236
2013
3
124.8
9
15575.04 374.4
TOTAL 6
355.2
14
42132.8
722.8
Table 13: Table showing the previous outputs (Y) of PZ
Cussons
Year

Brands
Africa
Asia
Europe
Personal Care 120
75
80
Beauty
60
55
50
Electricals
65
40
55
Food
and 50
65
65
Nutrition
Home
70
80
50
Table 12: Calculated percentages for each region
according to Managements constraints.
By substituting these values above into the objective
function;
Max Z = 185(X11 + X12 + X13) + 175(X21 + X22 + X23) +
121(X31 + X32 + X33) + 85(X41 + X42 + X43) + 52(X51 +
X52 + X53), we obtain the optimum value as thus:
Max Z = 185(120 + 75 + 80) + 175(60 + 55 + 50) +
121(65 + 40 + 55) + 85(50 + 65 + 65) + 52(70 + 80 +
50)
Max Z = 185(275) + 175(165) + 121(160) + 85(180) +
52(200)
Max Z = 50875 + 28875 + 19360 + 15300 + 10400
Max Z = 124,810m
III
DECISION MAKING AND FORECASTING
AT PZ CUSSONS
In a situation whereby there are many
alternatives of choices to be made, it is not advisable for
managers to make decisions based on their qualitative
knowledge; hence a qualitative approach is necessary for
effective decision making. PZ Cussons utilizes the
LINGO programming in their decision making. This is
as a result of many products being produced from
various brands, and being distributed in various
continents having many countries. It is thus impossible
for PZ Cussons to make calculations manually in order
to make production decision for each product of each
brand. The LINGO program helps PZ Cussons to know
the profit each product yields, the slack and surplus
generated by each product, the region which produces
more profit and that which produces less. It also helps
them to know how much increase or decrease in profit
will be incurred if one unit is added or deducted from the
production of a particular product of each brand (14). PZ
Cussons uses LINGO program to determine the quantity
of product of a particular brand to be produced in each
region to maximize their profit.

(X)

Y = a + bx, n = 3;
a = X2Y XXY / nX2 (X)2
a = (14 x 355.2) (6 x 722.8) / (3 x 14) 62
a = (4972.8 4336.8) / (42 36)
a = 636 / 6
a = 106
b = nXY XY / nX2 (X)2
b = (3 x 722.8) (6 x 355.2) / (3 x 14) 62
b = (2168.4 2131.2) / (42 36)
b = 37.2 / 6
b = 6.2
Thus, Y = 106 + 6.2x
Hence, for 2014, x = 4. Substituting this into the
equation above,
Y = 106 + 6.2(4)
Y = 106 + 24.8
Y = 130.8
This implies that for the year 2014, PZ Cussons is likely
to have an output of 130,800m
For 2015, x = 5. Substituting this into the equation,
Y = 106 + 6.2(5)
Y = 106 + 31
Y = 137
This implies that a forecast for the year 2015 for PZ
Cussons is 137,000m
For the year 2016, x = 6
Y = 106 + 6.2(6)
Y = 106 + 37.2
Y = 143.2
This means that a forecast for PZ Cussons for the year
2016 yields and output of 143,200m
IV
CONCLUSION
Decision making in large companies such as PZ Cussons
could be very challenging, thus they implement an
optimization modeling software such as LINGO (15).
But take for instance a company producing two products
and distributing to three locations, decisions can be

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International Journal of Scientific Research Engineering & Technology (IJSRET), ISSN 2278 0882
Volume 4, Issue 8, August 2015

made manually by calculating the profit generated from

each product and each region.
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