Littlefield Simulation

The second Littlefield simulation game focused on lead time and inventory management in an environment with a changing demand (“but the long-run average demand will not change over the product’s 268-day lifetime”). Therefore our strategy to win this game was controlling the Littlefield Lab’s system capacity and the inventory level with choosing a right contract as well as keeping the cash daily as much as possible. In other

Tucker Hansson, the owner of Hansson Private Label, is struggling in whether to execute the $50 million investment proposed by his manufacturing team. Under this situation, the subject of this report is to evaluate the potential investment of expanding production capacity at Hansson Private Label (HBL) and make a recommendation to Tucker Hansson. In this report, I will specifically focus on analyses of the project’s free cash flows (FCFs), weighted average cost of capital (WACC) and net present value (NPV). With a sensitivity analysis, it can help us to observe how change in some key project variables

Rough approximation of the machine service rate μ based on the statistics from first 5 days:

In structural terms, we can analyze the organizational supply chain by performing an MMc Queue calculation, based on the figures from the last 120 working days, a 7,5h working day and weighted averages of operating times. This data yields the service rate which is combined with an arrival rate of 39 to calculate the throughput time. One has to consider that the arrival rate in the PW step is lower than in the other processes because only 15% of RAPs are converted into RUNs and reach this step. The cumulated throughput times yield our TAT, which in this case, falls into a range of 0.794 – 1.394 days. Hence, the underwriting process itself seems to be efficient and the difference has to have its main roots in qualitative and organizational defects. However, structural improvement is possible. The three geographically split UTs can be merged into a single unit, making up for different workloads which result in backlogs. Throughput times of the UTs can be decreased by up to 82,5%.

At this point the factory is operating at a capacity like never before. They have been shipping a record number of orders in a record amount of time. All of the orders past the shipping date have been completed and shipped. They are now shipping current orders on-time and early in in some cases. Now that the plat is responding better to market demands, Alex can focus on sales throughput, and gets the division sales manager, Johnny Jons, to market his plant's improved capacity. Together they manage to tie down a major contract

| |iv. Service quality cost savings – Controllable and relevant – With the 6 supplier option the company saves $100,000 in|

Alex comes up with the consensus that the “Goal” of his business and many others is to increase net profit while simultaneously increasing return on investment and their cash flow at the plant. This basically means to make money. These three measurements can be achieved by looking closer into his second set of measurements. Alex specifically must find a way to increase throughput while at the same time decreasing it inventory and operational expenses. All three of these measurements must be cautiously monitored since they all rely on each other to be obtained in balance. Factors that cause throughput, inventory, and operational expenses to become unbalanced are excess manpower and balance capacity of the demand of resources in the market.

After another good showing, Alex is assured by his boss that if he can show a further fifteen percent increase in his bottom line then the threat of closure of the plant would be withdrawn. Here Alex realizes that he may now be constrained by the market. On Jonah’s suggestion he cuts batch sizes on all his non-bottleneck machines to half and requests his marketing department to quote four week delivery times. The rationale behind this

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.

Another item to correct is the Production costs and expenses, currently running at 50% of the revenue. The management has expressed concerns with outdated packaging equipment and the use of the more expensive second and third shift to catch up with production. An investment here would probably turn profitable in the context of healthy sale numbers.

A Make-or-Buy Decision at Baxter Manufacturing Company Scenario Summary Baxter Manufacturing Company (BMC) is a leader in deep-drawn stampings. It has been in business since 1978 as a privately held company. The process for making these stampings is very involved and complex. BMC developed methods for efficiently producing large volumes of stampings while keeping their quality very high. BMC uses state of the art machines to make the stampings and they make all the tooling necessary for those machines. In the years since their founding, many changes have impacted the industry – especially when it comes to computer networks and software. In the 1980s many of BMC's customers went to Just In Time

The purpose of this case is to show how a batch system can be dramatically improved by JIT or Cellular concepts. The case clearly describes the changes that must be made in the production system to achieve the benefits desired. This amounts to a complete change in layout of the production floor and a substantial overhaul of the MRP system. The case nicely ties together some of the

Oak Hills facility is a unit of The Oil and Gas Services Company (TPGS). Mainly TPGS produces testing equipment that is Used in Exploration and Extraction unit (E&E). To increase operational efficiency, Oak Hills proposed to reduce the lead- time to one week, as now testing equipment was between one and two weeks. Many E&E domestic orders were rush jobs that had to expedited on the shop floor and the daily cost of an idle exploration well could range from U.S. $50,000 to U.S. $100,000 a day. Oak Hills intention of reducing inventory levels and enhancing customer service by implementing a lean

The initial intention was to stay with low cost provider strategy. However, there was a significant unfulfilled demand due to the insufficient capacity. Therefore, plant upgrades and building new plants have been prescribed to the company. Owing to that, it may not possible to provide the lowest cost in the market place. In certain regions the differentiation strategy followed and in some regions un-differentiated, low cost strategy follows. This enabled the largest share in the whole sale segment for

Total OH cost = $2,350 + $1,360 + $1,406.25 + $31.25 + $8,960 + $18,000 = 32,107.5