Day 50 Decision Making

Based on this, we then decided to look at the utilization and queue figures on, leading up to, and after day 31 at each station, so we could attempt to identify any potential bottlenecks. The first thing that jumped out at us

• Capacity would not increase significantly; it would increase by 20,000 immediately, and could be brought up to 48,000 in twelve months

The average lead time of a corporation is 15 weeks from production to consumption. Benchmark firms have a lead time of 8 weeks which is the goal for the supply chain (Heizer & Render 2010). The 8 week number will be achieved by analyzing opportunities to streamline the process thereby creating efficiencies and driving down the amount of time it takes to produce and ship products. Setting a goal for an 8 week lead time will give the firm an opportunity to assess their forecasting and production capabilities presenting a way to identify and address inefficiencies.

currently was operating its plant at about 75% of a one-shift capacity. Thus, the added volume from

“How much to increase capacity depends on (1) the volume and certainty of anticipated demand; (2) strategic objectives in terms of growth, customer service, and competition; and (3) the costs of expansion and operation” (Russell & Taylor, 2011, p. 259).

Revenue maximization:Our strategy main for round one was to focus on maximizing revenue. We did not want the revenue to ever drop from $1000, so we took action based on the utilization rates of the machines. We needed to have sufficient capacity to maintain lead times of less than a day and at most, 1 day and 9 hours. Based on the linear decrease in revenue after a lead time of one day, it takes 9 hours for the revenue to drop to $600 and our profits to be $0. In terms of when to purchase machines, we decided that buying machines as early as possible would be ideal as there was no operating costs after the initial investment in the machine. Having more machines seemed like a win-win situation since it does not

In the calculation it can be said that they only 7 stations are needed. With this number of workstations one could achieve the highest efficiency at this moment. But the company will grow rapidly. Therefore they had to add new stations every year.

During phase two of the simulation, SNC was presented with three different opportunities and those opportunities include:

: We changed lot size for 3 times. On Day 58, we changed to 2 lots/job in order to take Contract number 2 to make earn more money. On Day 64, we changed to 3 lots/job and hope the lead time would decrease. This was a big mistake we made. After this change, we noticed the queue for station #3 is very high, station #3 became bottleneck and our

Our primary goal is to create free cash flow with a large growth rate, this objective will be accomplished via executives working together and strategic planning throughout the simulation. Our team has decided to start the product launch at quality 1 features 2. We have forecasted sales at the beginning of quarter 2 at quantity 370; doing so will provide us with a unit profit of $1.00 at a 9.8% margin. Our intention is to keep the WACC under 11%. Majority of the product will be produced on the current line inclusively maximizing overtime; in chorus 2 new employees will be hired to open a second shift with two new lines.

It is a common desire to have a balanced plant, but this cannot be reached if there are problems with the levels of capacity in the plant. If there is not enough capacity in the plant, it almost seems as if the possibility of having throughput is being lost and if there is an excessive amount of capacity there is money that is being wasted, which would be a problem when trying to reduce the operating expenses. However, in reality the closer that a plant comes to being balanced, the closer they get to losing money. “ Look at this obsession with trimming capacity in terms of the goal,

To achieve a high net income and be effective in fulfilling contracts in the simulation, it was important to have a strategy set in place. This requires a standard of control over how the business was going to operate and fulfill orders effectively. In order to gain a higher reputation to secure higher value contracts within the game, I worked to acquire specific contracts and purchasing materials to produce the items that would be shipped out to customers. I also found it important to have employees who were highly skilled within each area that they were employed in order to maximize the production process. By having higher skilled employees, I found it easier to continually fulfill contracts at a constant rate as and minimize slack between each area of production. I also found it highly important within the simulation to be able to adapt quickly to changing market and contact requirements because each required a different set of machines, number of materials and time to be produced. It was very important to understand the time constants in order to effectively produce and fulfill each contract within the time that was allotted. Having a diversified production process was also important so that the production process wasn’t constrained to producing one type of contract. Through the game, I learned the

We recalculated the average arrival rate over the entire simulation to be approximately 11.8 orders per day, which we rounded to 12 for a small buffer. Based on this daily consumption, we found what day the next reorder point would be which was day 222. We wanted to find the demand for the final 46 days with an average of 12 orders per day came up with a figure of 552 units needed to meet demand over the last 46 days. Since we already had 61 units at the time of ordering, we subtracted that figure from the 552 and came up with a final order value of 491. This value should allow us to have a low inventory level at the end of the simulation. To achieve this, we had to change the reorder point to zero. This strategies hinges heavily on the lab not being in existence past day 268, if that were not the case, we would not recommend this plan.

This report provides a clear recommendation for average daily production capacity for the next 12 months. The analysis and various decision rules will assist management to provide a direction that will enable the best outcome when faced with uncertainty when combined with the risk tolerance.

Have you made a good decision today? Ever since we were born we are blessed with making decisions. Whether to do something or not or to obey or disobey. To do the bad or the good, whether to buy organic or not. In most cases once we make a decision we come to the outcome of the choice that was made. Some of which are good or others, not so good. Since we are bombarded with different choices we tend to choose the easy, cheapest, option then the hard, expensive, option instead. Both organic and non-organic grapes were appealing but once I ate both I began to realize we pay for the quality of grapes we eat.