April 8, 2013
Group Report 1: Capacity Management
The following is an account of our Littlefield Technologies simulation game. The account includes the decisions we made, the actions we took, and their impact on production and the bottom line.
Our first decision was to buy a 2nd machine at Station 1. We did not have any analysis or strategy at this point. Nonetheless, this turned out to be a wise investment, since Station 1 was in danger of becoming a bottleneck in production.
Station 1 Utilization
One of our team members conducted a full operations analysis. Using the analysis, demand for the 268 days of production was forecasted, and our strategy set accordingly.
On Day 71 Station 3 suddenly spiked to full capacity. The team made a rash decision to buy a 2nd machine at station 3 to avoid a bottleneck. The increase on Day 71 turned out to be a random spike; almost immediately, utilization subsided. Station 3 utilization stayed below 50% on average for the remainder of production, so the 2nd machine may have been an unnecessary 100K investment.
Station 3 Utilization
Station 1 reached full capacity, so to avoid a bottleneck we bought 3rd machine. This brought utilization back down to an average of 50-60%. Utilization would remain steady until Day 121 when Station 1 started to trend back toward full capacity.
Station 1 Utilization Day 77-121
At Station 2, there was a sudden increase in utilization to 66%. The team debated buying a 2nd machine at Station 2. According to the analysis, the forecasted demand would not necessitate a 2nd machine at Station 2.
Station 2 Utilization
From an empirical perspective, the utilization continued to trend upwards; however, ultimately, the team stuck to the original strategy, and based its decision not to buy the machine on the analysis. This would turn out to be a mistake, as Station 2 reached maximum capacity on Day 121, and proceeded to become a...
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