A not-for-profit public utility has limited funding for new projects. They are considering two new projects. One involves an investment of $1 million towards building power generating stations. With this project, the utility would not have to purchase as much power from external sources. Their wholesale cost of electricity would be reduced by $500,000 a year. Another project would also instead use that $1 million investment to reduce outages, making the power more reliable for its customers. This has been a major problem in the past few years, resulting in tangible losses for their customers of $2.5 million per year.
Use the facts above, address the following questions:
How might the concept of Throughput be used to determine which project is a better investment. Why?
Consider what their mission is likely to be, their primary goal(s), and what their strategy to achieve that might be. Then how and why does one of these investments best support their achieving the strategy.
How does the holistic system thinking help in making the right decision?