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Littlefield
Simulation 2
strategy
strategy
Just went through this last semester. We ended up in first place even
though we made a few minor mistakes. First a few links that helped us:
http://archive.ite.journal.informs.org/Vol5No2/Miyaoka/
http://wordpress.shetgar.com/blog/?p=59
http://www.scribd.com/doc/51139499/Littlefield-Simulation-2-Report
Here is what we did:
Pre-Game Activities: The team met the Tuesday before class to examine
the data and discuss strategies. It was apparent that both Stations 1 and 3
were operating at full capacity, frequently hitting 100% utilization. Station 3
seemed more strained since it had higher queues (Mean=506, STD=498)
than Station 1(Mean=187, STD=175).
Since the average job lead time exceeded 2 days during days 43 through
46, inclusive, we thought it would be unprofitable to attempt to move to the
$1,000 contracts. We discussed the options of altering the lot sizes, but
decided that the extra setup time would only create more bottlenecks
downstream.
Stage 1: As a result of our analysis, the teams initial actions included:
1. Leave the contracts at $750.
2. Change the reorder point to 3000 (possibly risking running out of stock).
3. Change the reorder quantity to 3600 kits.
4. Purchase a second machine for Station 3 as soon as our cash balance
reached $137,000 ($100K + 37K).
This strategy proved successful and after the second machine for Station 3
was purchased on Day 56 and the queue cleared, we were able to switch
to the $1,000 contracts. We occasionally lost a few dollars for being a little
late, but we always made more than we would have under the $750
contracts.
Stage 2: The next goal was to save enough cash to purchase a machine
for Station 1 so that we could switch to the $1,250 contracts. During the
cash building stage, we made the inventory order quantity as high as we
could afford, which was 6,900 kits at a purchase price of $70,000. When
the 6,900 kits were delivered, we switched the order quantity back to 3,600
so that we could purchase a Station 1 machine as soon as our cash
most of which will go to waste. So before we lose control, we will buy (100
* 11.8 * 60) kits and then set the reorder quantity to 60 (or 3,600 kits). We
hope this exit strategy works.
The exit strategy did work although if we had purchased another 1,200 kits
in Stage 7, we could have set the reorder quantity to 0 and reorder point to
0. This would have saved use another $24,000.
Posted by HB at 2:02 PM 1 comment:
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