1. Parkinson’s Third(?) Law
Size leads to complexity
Complexity leads to decay

2. Problem 10.2 How many units to sell (x*)? How best to produce x*?
Solve the problem all at once?
Solve it in stages?
The marketing problem
The production problem

3. Solve it all at once: 6 relations
Labor Output
Material Total Cost
Total Revenue
Profit

4. Solve the marketing problem: 4 relations (Production Must Transmit its Cost Function)
Output
Total Revenue
Total Cost
Profit

5. Solve the production problem: 4 relations Marketing must transmit output requirement
Labor Input Output Req’rmt
Material Input Total Cost

6. Complexity and Difficulty
Suppose difficulty of problem solution increases as the square of the number of relations
Then,
Solving problem all at once  62 = 36
Solving it in two stages  = 32
Dividing decision-making into easy parts is often most efficient
Divisionalization