Modeling of Spaza shop operations using soft and hard operational research techniques

Master Thesis


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University of Cape Town

Globalization has transformed the world into a big village in which the rich are becoming richer and the poor getting poorer. In the commercial world the trend is for big business to buy out the smaller companies and consequently get bigger. Yet it is arguable that small businesses have assisted in providing much needed services to small communities that occupy informal settlements and exist on or below the poverty datum line. The South African government has amongst its main objectives the alleviation of poverty and the improvement of life in previously disadvantaged communities. The government has allowed the micro-enterprises and small businesses in the informal sector to thrive and in this sector are Spaza shops that supply a wide range of grocery commodities to informal settlements. This paper is about an application framework of soft and hard operational research (OR) techniques used to address the performance of micro-enterprises with Spaza shops in Western Cape as a specific case study. The techniques include Strategic Options Development and Analysis (SODA) using Causal mapping and Soft System Methodology (SSM). These were chosen because of their suitability to understand performance problems faced by Spaza shops owners and find ways of improving the current situation by modelling the intervention of stakeholders. The improvement of Spaza shop businesses is a matter for all stakeholders. Causal mapping, helped to identify and structure the multiple conflicting aspects of Spaza shops business. Soft System Methodology made it possible to conceptualize the intervention model based on the rich picture and root definitions for relevant world-views and see what changes are culturally feasible and systematically desirable. Computer simulations were used to help design and test performance measurement indicators for the Spaza shops so as to enable decision-makers to choose the optimal strategy. Statistical analysis came into account to enable us to capture the seasonality and bring up clustering patterns.

Includes bibliographical references (leaves 90-93).