13Your Game: Four steps at three stations Sample PreparingStep 1 board stuffingTestingSteps 2 & 4 products are tested and information is recordedTuningStep 3
14Capacity Costs Station #1 SAMPLE PREPARING MACHINES $90,000 each TESTING MACHINES$80,000 eachStation #3TUNING MACHINES$100,000 eachResale value for any machine$10,000 each
15lead time = process time + wait time Factory ProcessEvery step has its own process timeLittlefield measures average daily utilization rates at each stationQueues hold waiting jobslead time = process time + wait time
16Orders and KitsEvery arriving customer order is matched with a new test kittest kits cost $600 eachshipments have a fixed ordering cost = $1,000supplier’s lead time is always 4 daysThree criteria to place an order:Inventory on-hand is lower than the reorder pointThere are no shipments of materials in transitCash on hand is sufficient for the order quantity
17Reorder PointStocks are replenished when they reach some pre-determined “low point”.A system commonly used by squirrelsWell, also by you, your checkbook vendor, and many other systems.In this game, you can not change the reorder point or inventory order quantity.
24Click “Plot Job Arrivals” and Download Data Click download buttonSave to desktopOpen with MS Excel or another spreadsheet applicationCopy > Paste data columns to a master worksheetIndex by Day
25Opening the data in Excel daynumber of jobs arriving each day123456789101112131415You will have 50 days worth of data until it starts running dynamicallyThe demand will increase until around day 150 and then level offFigure out the demand point where it levels off
26Forecasting Demand (arrival rate of jobs) Overall Linear trend= SLOPE(known_y's,known_x's)= INTERCEPT(known_y's,known_x's)Forecast for the demand at the point where you think it will level out.
30Current Job Lead Time through system & contract information
31Key Hints Forecasts estimate future outcomes Expected Utilization =Forecasts estimate future outcomesThey are not known for precisionA prediction interval should be consideredArrival Rate * Process Time# of Machines
32Key Hints Balance your work stations, reduce bottleneck Proactive are better than reactive strategies
33DeliverableNo more than 2 written pages which cover your teams experienceWhat did you do (in sequence)?Why did you make that decision?How did it work out?What did you learn during the process?Include an Appendix with a “journal” and any relevant calculations.