Charlene Li, Lori Wen, Gavin Luo, Jacky Chen

Littlefield Report

Team1    Charlene Li, Lori Wen, Gavin Luo, Jacky Chen

Preparation

We think about how we can improve the performance. The system’s current lead time is 2.3 days/unit, with high variability. We wanted to come up with a strategy that can meet the need of contract 3 because it can bring the most profit to company.

To improve the whole system, we found the centrifuging and preparing stations to be the bottleneck. Then to confirm this, we calculated the processing rate of each stations, which are 0.568/hr, 1.032/hr, and 0.556/hr, accordingly. Our strategy to improve is to buy machines for both station 1 and station 3.

We calculated the TPT to compare with the actual average lead time. We found the WIP to be 22.056. The flow rate equals to 12.22 units/day. Then Wq= 22.056/12.24= 1.8 days/unit, pulsing service time equal to TPT (2.2 days). Theoretically, current systems did not perform as good as we calculated. Without adding any additional machines, we could improve by changing the priority of testers. We treated it as a mix production, it took 1.4hrs and 0.5hrs to finish step 2 and 4 respectively. Since the system needed to produce a single complete job, it’s better to change the priority to step four.

Next, we try to determine the inventory level. We use the (r, Q) model. The holding cost is equal to 10%*600= $60/year*unit = $0.16/day*unit, but we couldn’t find the exact number of backorder cost. We assumed that backorder cost is the profit we lost per day divided by TPT, which means b = (750-600)/2.3= 65. Z turned out to be 2.75, so Q = 383 and r = 68.

Decision

1. Changed the priority of station 2 and 4

We discovered that the influence of priority is not obvious.

1. Adjusted the reorder point and quantity

We made change step by step. We changed the reorder quantity to 200 and the reorder point to 40. After about 8 days, we changed the quantity back to 150.

1. Bought station 1 machine

We observed that the queue size at station 1 is the largest and the utilization is close to 100%. Therefore, we bought one machine and the utilization dropped significantly after we bought the machine.

1. Changed contract

Because the lead time dropped to about 0.8 days, we decided to change the contract type to 2. We then changed contract type to 3 after one week. However, after 7 days, we found that the lead time is not stable enough, so we changed back to 2. Then, We were overconfident and change the contract to 3 again.

1. Adjust inventory reorder quantity and reorder point

We kept observing the inventory level to make sure there was no backorder. Therefore, because the fluctuation caused by the changes of contract, we adjusted the inventory to align.

1. Bought station 3 machine

After we accumulate enough money, we decided to buy another machine so that we could reduce the lead time and change to contract 3. According to our analysis, the bottleneck became station 3 after we bought station 1 machine. This time, we bought a station 3 machine.

Summary

A number of great decisions were made during the game to keep our team at the top five of the table throughout the game, however a couple of minor mistakes were also made, failing us to compete for the winning team.