Capacity Strategy
We decide the capacity strategy based on the machine’s utilization and the lead time. Since we
chose Contract 3 most of the time, we aimed to control the utilization for each station under 0.5.
The charts show the connection between the utilization and the lead-time. As soon as the
simulation started, we purchased one machine for Stations 2 & 3. From the charts, we can see
that the lead-time was under 0.5. On day 107, the utilization of Station 3 increased significantly.
Based on this trend, we purchased an extra machine in Station 3. The reasons for purchasing one
machine for Station 2 on day 120, one Station 3 machine on day 129, and another Station 1
machine on day 140 are the same. Due to the high demand of the order, during day 183, an extra
machine for Station 3 was purchased to make sure the lead-time stays under control. Before the
simulation ends, we sold one machine in Station 3 and Station 2 since the demand is gradually
decreasing, and it would be a waste to have more machines than needed. (NEXT PLEASE)
Contract Strategy
To maximize our revenue, the best contact option is definitely Contract 3. On day 51, we
switched to contract 3 to maximize the revenue. More machines were purchased to reach the lead
time requirement. On day 106, the contract was changed to the second one due to the increase in
the lead time. After purchasing an extra machine in station 3, the contract number was
immediately adjusted back to contract 3 on the 107th day because the utilization will be
sufficient to decrease the lead time. However, by the end of day 120, this time, the revenue we
made was less than contract 2, so we switched back to contract 2 since the lead time had
surpassed 0.5 for five consecutive days. During day 127 and after an extra machine was
purchased for station 2, we discovered the lead time gradually decreased and became stable
under 0.5, which enabled us to use contract 3 again. We kept using contract 3 until the end of the
simulation. (NEXT PLEASE)
Analysis
1.
We use the machine’s utilization data to decide the time and the amount that should we
purchase extra machines.
2.
Lead time is a crucial element since it has a direct connection with our revenue. So, we
used the lead time data to check if it meets the contract requirement.
3.
Completed jobs data was used as an element to calculate the machines’ capacity.
4.
We use daily revenue data to decide if we have the most profitable contract. For example,
under Contract 3, even if our lead time exceeded 0.5, but our revenue was above 1,500,
we would not change it to other contracts because it is still the contract that generated the
most considerable revenue. (NEXT PLEASE)
Other Related Issues:
First, scheduling policy. For the scheduling policy in station 2, instead of the FIFO strategy, we
changed it to priority to step 4 because it’s vital to meet the contract’s required lead time.
Second, each station queue size. The processing time for each step depends on the queue length
for the particular queue and the time, which is affected by the Queue length. (NEXT PLEASE)