Bulldog printing: cost estimation and information elicitation mini-case and teaching notes

Abstract This case describes a printing company that is concerned about predicting paper waste on their web offset presses as a component of both job estimating (pricing) and overall control standards in order to respond to competitive pressures. We use this case in the undergraduate cost/managerial course. Students first seek information from the instructor (representing company management). Then, using regression and correlation analysis, students identify the activities that best predict waste. Given the information about press speeds and paper waste generated, an obvious conclusion is that speed is the independent variable and waste the dependent. However, students find that there is a real question about which is x and which y. In fact, neither variable is the independent variable; both are dependent on other factors. In their first regression and correlation analysis using just speed and waste, they find that waste and speed are inversely related. They must then move on to isolate the intervening activities that can explain what is happening. Students should first determine that waste differs for the two paper types: newsprint and machine-coated. They then should determine that it is the level of complexity of the job that increases waste and decreases processing speed. These measures of complexity can then be used for pricing and control. While the case lends itself to many formats, it has been used as an information elicitation case using e-mail. Information elicitation (or incident process) cases help develop critical thinking as students identify key issues and ask questions to determine the best solutions. fn1 They are enjoyable for both the students and the professors, and place students in a more real-world situation where all the necessary information is seldom readily available. The use of e-mail correspondence is also more reflective of a real-world situation and has the advantage of providing the instructor with a record of the interactions. In this elicitation case, students are given limited information about paper waste at Bulldog. The instructor role-plays the controller of the company, Chris Walters, and students ask Walters appropriate questions to determine activities that relate to paper waste. The following presents the information provided to students. The Teaching Note explains the process and provides the controllers information.