ODS 433 December 13, 2010

Simulation Game Final Paper

TEAM 3

John Muniz, Kyle Malm, Dean Pasciuto

Littlefield Technologies is a job shop that assembles Digital Satellite System receivers.
These receivers are assembled from kits of electronic components procured from a single
supplier. The assembly process consists of four steps carried out at 3 stations. Station 1 is the
Board Stuffing station, Station 2 is the Testing station, and Station 3 is the Tuning station. There
are 4 steps that are involved in the process. The first step is at station 1 and consists of
mounting the components onto PC boards and soldering them. They are then sent to the
second step at station 2, where the digital components are briefly tested at the Testing station.
The third step is at station 3, where the components are tuned and the final adjustments are
made. Finally, the boards are sent back to station 2, to be comprehensively tested in the final
step of the process.

There are automated machines at each station that perform the operations described
above. The simulation game was created to give the students the chance to run a factory and
make decisions on the machines and inventory that go with running a factory. We were given a
number of different options when the simulation game began, and had to make decisions to try
and produce the best desired outcome for the factory. This was the second simulation game
that ran for the class, the first game was a sample to help get an idea of what we would be
dealing with. This was a good experience that prepared the group better for the second
simulation. During the first simulation, our group waited too long to make any decisions. We
had a difficult time coordinating schedules, and by the time we could all get together and make
some moves, the game was too far along and we finished in last place for the class. This proved
that in order to be efficient we had to make changes to the game much earlier.

We started making moves on the second simulation game on day 64, which was the
morning after the game was opened up for use. The first decision that was made was to
purchase additional machines for the various stations. Much of the analysis leading up to this
decision was based on the amount of service time that it took for each station to process what
their respective stations did. The first decision was to purchase an additional 2 machines for
station 1. Station 1 had the longest service time and the thought process behind the purchase
was that an additional 2 machines at that particular station would help the other stations keep
from being idle for any period of time. Day 64 also included purchasing another machine for
station 2, and much of the same reasoning was applied to this decision. Station 2 had 2 steps
involved in the process, and having another machine there would hopefully speed up the
process and allow the inventory to move quickly through the factory. We also purchased a
machine for station 3, and figured that because the first 3 steps took longer than the fourth
step, more machines would move the product through faster and generate more revenue for
our team.

On day 64 we also changed the Station 2 scheduling rule. The rule had been FIFO, or
first in first out, but we decided to change it to Priority Step 2. The reasoning behind this
decision was that Step 2 took 1.9 hours while Step 4 only took 0.2 hours. If Step 4 was such a
short process, then we figured that the priority should be with Step 2 because it would get the
inventory closer to being finished and there was an additional machine in Station 3 to help with
the increased volume that would accompany the change. Because Step 4 was such a short
process, we determined that this step could be accomplished after the machines finished up
with Step 2.

Those moves were the extent of the moves made on day 64, and we determined that
we would let the simulation run for a handful of days to see what affect the moves would have
on our factory. The next move was made on day 69, and this move was a change to the
contract from contract 1 to contract 2. After looking at the standings and realizing that we
were in last place, we decided to make the change to the contract to try to get a little more
revenue generated. Contract 2 had a much shorter lead time and maximum lead time, but
there was more revenue generated from getting the material out quicker. At the time it
seemed like a good risk.

We also changed the scheduling rule at Station 2 back to FIFO. We were lagging behind
in money earned, and it looked like there was a bit of a backup with the fourth step. We
figured that going back to FIFO would even things out and give us a chance to make more
money and get out of last place. We sold one of the machines from Station 1 on day 69 as well,
and this was a result of looking at the queue plot. We did not have anything in the queue, and
from looking at the graphs the machines werent always used efficiently and were idle too
often. In hindsight, we should have just purchased one additional machine for that station
instead of two as selling the machine only generated $10,000 in revenue.

We decided to let the simulation run for a bit after making these additional moves, and
did not make another move until day 90. On day 90 we noticed that we were still in last place
in the standings, and determined that we needed to get more inventories out of the factory to
try to get more cash in. We switched the scheduling rule at Station 2 once again, this time to
Priority Step 4. As mentioned above, this move was made to try to get some items finished up
and sent out in an attempt to increase revenue. Once again after making this switch we
decided to let the simulator run for a bit and see if the changes would make a difference.

At this point we started to play around with the reorder quantities and reorder points.
The demand would rise steadily for the parts until about day 140, when there were 28 orders
per day. After day 140, the numbers would begin to go down slowly until there was only 1
order on the last day of the simulation, day 268. On day 139 we lowered the reorder quantities
and points, and did the same on day 177 and day 189. After lowering it on day 189, we were
down to a reorder point of 900 and a reorder quantity of 1800. We quickly realized that this
was a mistake, and that these numbers were far too low for the amount of time that was left in
the simulation. Looking at the inventory plot, we noticed that the inventory was getting all the
way down to zero before the next shipment arrived. This created idle time for some of the
machines, and we were losing money by having the inventory so low all of the time.

So, on day 214, we noticed that on the inventory plot the inventory had gone down to
zero, and increased the reorder quantity to 3000 and the reorder point to 1800. We did not
want to increase the number too much and have inventory sitting around, but we still wanted
to move these numbers up to make sure that the machines never had to sit idle while waiting
for parts to come in. We also changed the Station 2 scheduling rule back to FIFO. After looking
at the queue for Station 2 and seeing that there was almost never anything in the queue we
decided that a switch back to FIFO was the best route to take. When there is never anything in
the queue waiting to be done, FIFO is the best option because it allows the machine to work on
whatever comes in first.

In addition, on day 215 we sold one of the machines in Station 3. We did this after
looking at the queue and plotting the queue size. While the queue was bigger than the one at
Station 2, it still wasnt large enough to consider keeping a second machine at that station. We
figure that switching the scheduling rule back to FIFO in Station 2 will offset the loss of one of
the machines at Station 3 and will keep things moving better than they have been. At the
current time we are in last place, so making a couple of changes seemed to be the right move
to make.

In conclusion, we thought that this simulation game was a good way to apply some of
the concepts that we learned about in class and it was a good learning experience running a
factory and seeing what happens when you change certain aspects of it. The graphs showing
queue size and inventory levels are a good way to figure out how much material to order and
how many machines to buy. We did have some trouble understanding the graphs sometimes
and misinterpreted the inventory line in the cash section of the page. This was one of the
contributing factors in the decision to lower the inventory reordering procedures, a decision
that cost us in the end as we had inventory completely run out. Running the simulation
definitely helped us understand the concepts and watching what happened when we made
some of the moves that we made allowed us to see our errors and move to correct them.