Date of Award

Fall 2001

Document Type


Degree Name

Master of Science (MS)


Engineering Management & Systems Engineering


Engineering Management

Committee Director

Paul F. Kauffman

Committee Member

Andres A. Sousa-Poza

Committee Member

Robert R. Safford

Call Number for Print

Special Collections LD4331.E555 T46 2001


Human Capital has a major impact on cash flow management decisions in a Technical Services company. Decisions to hire or terminate employees to meet contract requirements affect the company's economic value. The objective of this research is to develop a model that assists management in establishing a starting point in making, as efficiently as possible, those decisions that impact employees' lives. To understand that impact, the operations and economic parameters of a Technical Services company are compared with those of a manufacturing company. This analysis establishes two · essential points for Technical Services organizations; first, that the capital investment decision is one of human capital skills and that cost is critical for an organization's financial success.

Building on this conceptual base, the research develops a starting point for managerial decisions associated with human capital using two parallel decision models. First, the Quality Function Deployment (QFD) technique is applied to map service industry business objectives with employee skill sets. This determines which job classifications are most critical. A weighting factor is then developed to identify skill importance. Concurrently, a linear programming model determines the impact of hiring and termination on costs. This approach provides a quantitative methodology that supports service industry managers in understanding both the strategic and tactical (bottom line) financial value of their Human Capital decisions. Armed with that knowledge, they can begin an employment decision process based on the quantitative information provided by these models and that integrates with other subjective and system based factors that must also be a part of a comprehensive human resources plan.


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