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Few things have been better documented over the past decade than the decline of formal—read big and heavily‐staffed—strategic planning departments. Recently, however, there seems to be a planning renaissance of sorts with smaller, stream‐lined departments cropping up in U.S. companies (see “The New Lean Planning Machine” Business Strategy, July/August 1994). Now there are some new data that are guaranteed to warm the down‐sized, down‐trodden hearts of corporate planners everywhere—especially those looking to keep those seedling departments alive. The results of some recent research (by the authors of this piece) suggest that a key aspect of strategic planning—getting senior executives to agree on, and put into writing, a definition of the purpose and scope of the company—can actually translate into profits.

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Manufacturers in a high-tech durable product industry may have to make operational decisions in the presence of uncertainties associated with product demand and supplier’s wholesale price. In this paper, the authors investigate the impact of such uncertainties on the activities of a manufacturer and its supplier and develop an optimization model that describes how the manufacturers should reflect the uncertainty issues in their pricing and order quantity policy to achieve a desirable profit. In the modeling process, three important managerial problems are discussed, i.e., the effect of coordination between a manufacturer and its supplier in dealing with uncertainties on product demand and supplier’s wholesale price, strategies for mitigating both errors in demand forecasting and supply risk, and modeling frameworks to determine the optimal solution for price and order quantity based on the varying levels of coordination. To identify best operational decisions under market uncertainty, the authors use the stochastic optimal control theory.

This disguised case features a marketing major, Susan Lafleur, who presented Professor Higgins, the Department Chair, with a dilemma. She needed a petition signed to enroll in a capstone course while simultaneously taking a prerequisite course. She received an employment offer from a prestigious overseas corporation, which required a baccalaureate marketing degree. Higgins informed Susan that the prerequisite courses had never been waived previously. Further investigation revealed that Susan had a marginal academic record. Higgins's quandary involved maintaining academic standards, College policy, and compassion for the student. Decision making, motivation, and psychological contract research were applied. What should Higgins do?