Littlefield

The company started off producing 20,000 units of mountain bikes. We did not change the production quantity. Last year our forecast sales were 24,000 when we only sold 19,866; therefore we thought it would be best to leave production at 20,000 bikes. Having excess inventory, we concluded that 20,000 units should be enough considering our quality has not changed and our advertising will not increase the sales dramatically. Although we had the choice to produce as much as 30,000 units, we felt as though we did not have sufficient money to increase production. We were interested in allocating the money towards marketing as opposed to production. We realized that without awareness, no matter how many units we make, sales would be inefficient.

Along with capacity, we also made it a focus to limit the amount of overtime and second shift workers. This kept our costs down and our profit margin wider. We paid attention to our inventory on hand and made sure to not schedule more production than was needed. Towards the later rounds, we really seemed to grasp the idea of the game, which can be seen in our large increase in profitability. In the Finance portion, we borrowed money in the first five weeks to pay off our current debt. As the game got into the later rounds we began paying off our current and long term debt because our profits were increasing at a higher rate. Overall, we believe that our group had a decent understanding of the concepts as we finished with high market share and profits.

Going into 2004, Bob Moyer planned to produce 10,000 bicycles at Mile High Cycles. Construction of his bicycles includes the utilization of three departments, frames, wheel assembly, and final assembly. During this year, Mile High Cycles ended up actually producing 10,800 bicycles to meet higher than expected demand. Bob is curious as to whether or not he was successful in maintaining costs to meet these higher levels of demand.

Alex comes up with the consensus that the “Goal” of his business and many others is to increase net profit while simultaneously increasing return on investment and their cash flow at the plant. This basically means to make money. These three measurements can be achieved by looking closer into his second set of measurements. Alex specifically must find a way to increase throughput while at the same time decreasing it inventory and operational expenses. All three of these measurements must be cautiously monitored since they all rely on each other to be obtained in balance. Factors that cause throughput, inventory, and operational expenses to become unbalanced are excess manpower and balance capacity of the demand of resources in the market.

Jonah tells them that they have hidden capacity because some of their thinking is incorrect. Some ways to increase capacity at the bottlenecks are not to have any down time within the bottlenecks, make sure they are only working on quality products so not to waste time, and relieve the workload by farming some work out to vendors. Jonah wants to know how much it cost when the bottlenecks (X and heat treat) machines are down. Lou says $32 per hour for the X machine and $21 per hour for heat treat. How much when the whole

To what extend might savings in delay costs that result from demand management offset peak period fees?

In this case study, production planning of MacPherson Refrigeration Limited (MRL) for the next year is conducted. In order to

Our team operated and managed the Littlefield Technologies facility over the span of 1268 simulated days. Our team finished the simulation in 3rd place, posting $2,234,639 in cash at the end of the game. We did intuitive analysis initially and came up the strategy at the beginning of the game. And then we applied the knowledge we learned in the class, did process analysis and modified our strategies according to the performance results dynamically. We have reinforced many of the concepts and lessons learned in class and had a better understanding of the operation of the Littlefield Technologies facility and how certain modifications would affect the throughput and lead time.

The simulation had shown my ice cream store made a $1.6million revenue with a net profit of $465k. It does not seem very much net profits because of IceFlake’s operating expense in its programs and advertisements. During the operation, 10 employees were hired for IceFlake with a salary that is in the range of $7-9 dollars per hour. Payroll usually consist one of the highest expense in most industry, however the programs at lv10 costed more than the payroll. Furthermore, it is hard to determine rather how effective the programs are at different levels. Even through my market share is averaged at 20% against other 4 competitors, the advertisements provided an unknown amount of how many more customers can be attracted with. The brand recognition was high with customer satisfaction and employee morale at very pleased, but with decreased advertisements shown same number of customers each day. The simulation did not provide a more accurate data or a benchmarking to other competitors, it simply shown how much market share and their price. Therefore, the effectiveness of the programs and its advertisements was difficult to be determined.

For my project, I ran Coffee-Roma, a coffee shop located in the business district of a large city. My simulation ran for 60 days. Over this timeframe, I hired 7 employees and earned gross revenues of $89,984.20. From those revenues, my net profit totaled $14,046.83. Below are the details of how I attempted to best run my business.

With adjust of investment to 230% of normal budget and apply tables for 8 batching strategy throughout the night, the final best outcome of this simulation generates $640.96 profit per night.

In this meeting we learned that around 80% of the auxiliary orders was being returned by patients for refunds. The main causes was that the product was uncomfortable, tore easily (unreliable), and that patients would rather get it locally for much cheaper. With this upper management asked for us not to offer the products to patients into further notice. We also discussed that the only sunk cost in this situation is the hiring and training of new sale agents which we couldn't consider in order to discontinue the project. We all understood that this cost wouldn't be recovered as well. According to Accounting Tool" A sunk cost is a cost that an entity has incurred, and which it can no longer recover by any means. Sunk costs should not be considered when making the decision to continue investing in an ongoing project, since these costs cannot be recovered. Instead, only relevant costs should be considered. However, many managers continue investing in projects because of the sheer size of the amounts already invested in the past. They do not want to "lose the investment" by curtailing a project that is proving to not be profitable, so they continue pouring more cash into it. Rationally, they should consider earlier investments to be sunk costs, and therefore exclude them from consideration when deciding whether to continue with further investments. " We convinced

To calculate optimal pricing I used MC outlined in the case as based on volume of drives produced weekly. Fixed costs of plant and equipment were not included in this analysis although are later evaluated for breakeven time frame.

Rough approximation of the machine service rate μ based on the statistics from first 5 days:

Initial Game Strategy: The team met, the day before the game was about to start, to prepare a strategy based on the learning that we had while playing the demo version of the game. We had realized that the machines in Station 1 and Station 3 were operating at full capacity (i.e.100% utilization) when the demand was high. As a result, inventories were queuing up right before these two stations. We thought of buying both the machines but due to cash