Martes, Disyembre 2, 2014

Journal 10: Cost of Development

I came across a game this weekend and its called SimCity


I reflected on it and realized it connected to one of my Management Science lecture - Networking. SimCity is an open-ended city-building computer and console video game series originally designed by developer Will Wright. It is published by Maxis. In this game, the player is given the task of founding and developing a city, while maintaining the happiness of the citizens and keeping a stable budget. The player must define zones, each having limits on the kind of development that can occur there. Development of the zones is not performed directly by the player, but happens when certain conditions are met, such as power supply, adequate transport links or acceptable tax level. The residential zones, in green, provide housing for Sims; the commercial zones, in blue, provide shops and offices; and the industrial zones, in yellow, provide factories, laboratories and farms. There are three different densities in the game: low density for small buildings, medium density for low to mid-sized buildings, and high density for anything up to large tower blocks.
            
This game utilizes quantitative methodologies in its system, using complex problems to keep the Sims stay and the city. Many of those involve variables such as utilities, jobs and employment, criminality, pollution and etc. Those variables are used to calculate and control the player’s decisions. Then it creates the results of the decisions made and provides other variable and possible needs to keep the Sims happy.  The goal of the player is not limited to expanding and improvements but keeping it healthy for those who live in it. It is very similar to how businessmen and government keeps its provinces and business districts.

Analysis
Metro Manila is no different from a SimCity, playing this game made me realize that there were no proper strategies and planning done before projects and constructions were implemented. It’s easy to pin point decisions making issues done by the government creating severe traffic, pollution, flooding, inconvenient modes of transportations, overpriced necessities and so on making the city not healthy to live in. No wonder a lot of professional and educated Filipinos decide to leave the country.

The estate of course is trying to do every possible way to keep the investors and to remove the citizens out of poverty but at what cost? What is the cost that the development creates to the environment? Given today’s technology, as MBA students what can we do to make things more efficient? Heres a picture of Manila covered with SMOG.


In building a city, one has to look on the environmental issues and consider the cost of development. To avoid decision failures which would entail environmental costs, the decision makers can make use of statistics and algorithms with all the given variables/information before deciding. I propose they make use of the competitive environmental strategies using environmental accounting, do the math of strategy versus returns.


I think being green can be used as a competitive advantage in the market and for the economy.

Conclusion
Environmental accounting is an alternative tool improve and provide systematic ways of city’s environmental affairs. It will address short term and long term decision impacts of the products,  services and development on the environment.

Quantitative Methodologies can be utilized for the following:
  • Product design
  • Structure design
  • Facility siting
  • Purchasing
  • Process costing
  • Risk/liability management
  • Strategic planning
  • Supplier/structure selection
  • Capital investment
  • Cost control
  • Waste management
  • Transportations and fuel optimization
  • Expansions


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