First Published In the Hindu Business Line
V Pattabhi Ram
“Could life be more unfair?” Wafers asked her dad. Classes at 0615 hours; fight for a place to sit; and 2.5 hours of heavy humorless learning. Phew. Then, rush for breakfast; zip through the crazy traffic to reach the client’s office to spend long hours amongst numbers and documents. Tiring. Spot an error like she did last week at Titanic (the multi million dollar company which she audited) that would lead to a huge dip in its bottom line and pronto the company would change its method of inventory valuation to make good the fall! “Could life be more unfair?” Wafers asked her dad again. He was on the couch, munching popcorn and watching the India-Pakistan test match on television. To him she simply did not exist there.
India, chasing an imposing 470 to win had just lost batting maestro Sachin Tendulkar and was tottering at 290/5 with two sessions to go. Who would come in next? The very very special Laxman or the dapper Yuvraj Singh? Mom who loved the lanky Hyderabadi wanted him to wield the willow. Dad, the homegrown Harsh Bhogle, swore it would be Laxman. Wafers who had trouble distinguishing a cricket bat from a baseball stick was jumping up and down “Yuvi, Yuvi, Yuvi.” “Will you shut up?” screamed Chuin (he crazy about chewing gum), her eight-year-old kid brother, ignoring protocol. “Why, why?” asked Wafers. “Laxman can score more runs than Yuvraj,” rammed Chuin. “Big deal”, remarked Wafers. “In the last ODI, chasing 270 and placed at 170 for 5 with 15 overs to go, it was Yuvraj who had come ahead of Laxman.” And condescendingly added, “You should know your history before passing judgment Chuin.” For a moment Chuin simply stared at Wafers. And then said, “Madam, this is a test match. Here the one who can score more runs is preferred. That was an ODI. There the one who can score faster is preferred”. For Wafers this was suddenly sounding familiar. But she couldn’t place it precisely. “Why the difference,” she haltingly asked. “Because in an ODI, the overs are limited. Hence “runs per over” is crucial” the little one said wondering whether his sister had only limited intelligence.
“My God. That’s it,” she screamed. “When there are no limiting factors the decision is based on contribution”, her professor had said while explaining Rule 5 in decision-making. “And when there are limiting factors the decision is based on contribution per unit of limiting factor” he had remarked laying out Rule 6. At that time she had wondered, “Why?” Now she knew. When overs are in plenty the decision is based on “Runs” (read contribution). When overs are in short supply the decision is based on “runs per over.” (Read contribution per unit of limiting factor.) You needed to get the maximum bang from the limiting factor. Her kid brother had cracked for her the marginal costing riddle. She looked at him in newfound admiration. He continued to watch the match unmindful.
The commercials came on the screen. She switched channels and found another version of cricket, the five-a-side tournament. Each team had a maximum of 20 overs to play and each batsman could bat a maximum of six overs. “How would the captain allot the overs?” Would he use Assignment or would it be Transportation she wondered! She turned to Chuin for help. Carefully she phrased the question. “Chuin, if you were the captain how would you rotate the batsmen?” she asked. “Six chocolates” said the kid indicating that this would be the price for the answer. “Even otherwise I would give you chocolates dear,” said his sister, half irritated. “Well, the best batsman will bat first,” said Chuin, fancying himself as Harsh Bhogle. From that Wafers extrapolated. She would have to rank the batsmen based on their strike rate. The best batsman would first play his six overs; the second best would next bat out his six overs and so on until the total number of 20 overs is exhausted.
“My god” she exclaimed. Wasn’t this sounding like the decision-making rule when the maximum number of units to be produced of a product is specified? “First, rank the products in the order of contribution per unit of key factor. Then, allot the maximum possible units to the best product, later to the second best product etc until the key factor is exhausted”. Eureka. That was Rule 7 of Marginal costing, the maximum rule as the professor had called, she realized with great joy. “What rule” asked Chuin? Wafers didn’t realize that she had actually screamed out the Rule. She ignored him. This cricket was helping her understand a few things about marginal costing and she wouldn’t allow some eight-year old to bully her, even if he was her brother.
Her mind began racing. What if the rules of the game were changed? What if each of the five players was to play a minimum of three overs. She simply had to apply a modified version of Chuin’s logic. She would have to find the best players based on strike rate. She would then allot the minimum three overs to each of the five players, eating up 15 in the process. The balance would go to the best player. So the best player would handle eight overs; the other four would handle three apiece. Wow. Rule 8 had fallen in place. Her professor had called it the minimum rule and had explained it step wise. “Step 1; rank the products in the order of contribution per unit of key factor. Step 2; allot minimum quantity to all the products and balance possible quantity to the best product”. Oh, if only he had offered this cute cricketing parallel it would have been great she told herself.
Thrilled at the increasing link between marginal costing and cricket she wondered what if the rules were changed further. What if each player was to play atleast 3 overs and at most 6? Well, she would first have to rank the players based on “runs per over.” Then she would have to allot the minimum three overs to each of the five players, eating up 15 in the process. The balance overs would go in sequence to the best player, the second best player etc until the overs were exhausted. Wow. Wasn’t that Rule 9? Wasn’t that what her professor had called the mini-max rule? He had of course explained it stepwise using business lingo rather than cricketing language. Decision-making was now like 1-2-3 for her.
Chuin was certain that his sister had gone bonkers. She was talking about runs, contribution, overs and products all in the same breath.
Pattabhi Ram 