Question

Consulting life (10 points) Mt. Kinley is a strategy consulting firm that divides its consultants into three classes: associates, managers, and partners. The firm has been stable in size for the last 20 years, ignoring growth opportunities in the 90s, but also not suffering from a need to downsize in the recession at the beginning of the 21st century. Specifically, there have been -- and are expected to be -- 200 associates, 60 managers, and 20 partners. The work environment at Mt. Kinley is rather competitive. After four years of working as an associate, a consultant goes ``either up or out''; that is, becomes a manager or is dismissed from the company. Similarly, after six years a manager either becomes a partner or is dismissed. The company recruits MBAs as associate consultants; no hires are made at the manager or partner level. A partner stays with the company for another 10 years (a total of 20 years with the company).a. How many new MBA graduates does Mt. Kinley have to hire every year? b. What are the odds that a new hire at Mt. Kinley will become partner (as opposed to being dismissed after 4 years or 10 years).

Answer 1

Answer:

A. 50

B. 4%

Explanation:

We can easily find out how many new MBA graduates do Mt. Kinley has to hire every year by calculating the flow rate of associates by dividing the average inventory of associates by flow time of associates.

Requirement A:

The flow rate of associates = Average inventory of associates / Flow time of associates

The flow rate of associates = 200/4

The flow rate of associates  = 50

Therefore the firm should assign 50 new MBAs every year.

Requirement B

Probability of associate becoming a partner = 20% x 20%

Probability of associate becoming a partner = 4%

The chances that a new hire at Mt. Kinley will become partner are 4%

Working

The flow rate of manager = Average inventory of manager/ Flow time of manager

The flow rate of manager = 60/6

The flow rate of manager = 10 managers/year

The flow rate of partner = Average inventory of partner/ Flow time of partner

The flow rate of manager = 20/10

The flow rate of manager = 2 partners/year

probability of becoming a manager = 10/50

probability of becoming a manager = 20%

Probability of becoming a partner = 2/10

Probability of becoming a partner = 20%