Graduate School of Business, Ko University OPERATIONS MANAGEMENT LITTLEFIELD SIMULATION GAME SIMULATION REPORT OF TEAM TIRAMISU Team Members

- Kaan alar - Christoph Kaempf - pek Bingl - Dila Topuz Situation Analysis The Littlefield simulation was already ran for a 50 day period when we were given access. The demand had a slowly increasing trend, and for each station there were a single machine assigned. Contract type was set to 1 and inventory management was automatically carried out, which will also be the case throughout the simulation. By the time we gained access our operation had around 1,000,000$ starting cash plus 60,000$ from revenues of 50 days. Demand Analysis As inventory management is out of our control, the demand analysis is the most important thing in this simulation. All the possible decisions like purchasing machines, setting contracts and lot sizes should based on accurate analysis of demand. As Tiramisu we tried to plot the demand and see the general trend behavior of job arrivals. We plotted the demand every 10 days and made decisions according to the forecast followed by the trend. Here is the overall demand and projected trend of the whole simulation. Contract Analysis There are two contract types that can be offered to clients. They basically depend on the rule of less lead time you manage, the more profit you can generate. If we went with the contract 1, we wouldnt need to buy too many machines as the lead time was 3 days, but we had to track the demand all the time. Thus basically the demand tended to be low, and machines utilities were low, we could directly switch to contract 2, and vice versa. It was crucial to decide on switching time as it may have led to higher losses. The second plan we couldve gone was to purchase several machines for each station and then directly switch to contract 2 and have a more relaxed way of tracking demand and making decisions. We first started with the first strategy then we switched to second one and this resulted in higher losses then we expected. Capacity Analysis Depending on the forecast of demand on the first 50 days; the highest demand we predicted was 12(highest among 50 days) + 3(standard deviation of 50 days) =15 thus we needed 17 order capacity in the next period just to be safe. However we waited for a whole 20 hours to react and bought 1 machine for station 2, in which we predicted a queue may occur. Throughout the simulation following first strategy we bought machines whenever we predicted a queue and demand tended to boom. And towards day 138 we switched to strategy 2 bought more machines and switch to contract 2 and waited to make-up for the losses we made during first quarters of

simulation. The lead times can be seen below and may explain why we lost huge amounts of money up to day 138. Conclusion The main mistake was that we were more of a reactive team as opposed to a pro-active team. We shouldve decided on a contract strategy and stick with it. The demand analysis shouldve been more through, containing medians, ranges, days the orders greater than 15 or less than 8. Reactive responses to demands and accumulated queues led to machine purchases both late and sometimes unnecessary. Switching through contracts led to more losses as lead times were not adjusted as desired at the moment. If we played through again, we would systematically analyze demand and buy machines prior to booms and switch to contract 2 after lead times were decreased to desired amounts.