OPERATIONS MANAGEMENT
Production Simulation Exercise
The purpose of this exercise is to give you experience in designing a production process and for you to begin to understand how process design decisions and related OM decisions can influence the efficiency of a process.
Your job is to organize a company to produce a product according to the specifications that are provided on a separate sheet. (See “Production Specification Sheet”) attached. You may create a company of one (yourself), two, or three individuals. The other resources that you may use are listed below. Your goal in this production simulation is to maximize profits. You are expected to be completely honest in your production practices and in the details provided to me, or the ethics board in the industry will penalize you with a fine, which will be zero points on this assignment!! This is meant to be fun and to give you an incentive to do your best, but you have no reason to cheat the system!
At the end of the production period, a company will receive $200 for each non-defective finished product that is created within a 20-minute production period and accepted by the customer in terms of what he/ she wants and that meets the engineering specifications (i.e. 1/8” tolerance on the measurements, meaning if the dimension of a part is supposed to be 6”, anything between 5 7/8” and 6 1/8” would be good.) To calculate profits, the firm must subtract out the cost of any raw material purchased ($800 per piece of construction paper) and extra labor hired ($3000 for 1 other worker, or $6000 for 2 extra workers).
Summary of production simulation:
Goal: Maximize profits (revenue – raw material costs)
Materials: $800 per sheet of construction paper (9”X 6”)
- You will need to create your own sheets, either by purchasing construction paper from an art store (it usually comes in 12” x 9” sheets) or else make your own 9” x 6” sheets from printer paper, and use crayons or colored pens if needed (Note: You may color the paper PRIOR to the start of the production period).
- You will need to decide how much 6”x9” sheets of paper you will “purchase” for use during the production period and message me your purchase quantity just PRIOR to beginning production. Unused paper cannot be sold back to the supplier, and extra paper cannot be purchased during the production period.
Labor: $3000/ extra worker, for up to two extra workers besides yourself
Resources: 1 scissors, 1 ruler, 1 roll of tape, 1 glue stick, pens (unlimited quantity), product specification sheet
You may employ up to an additional two people (these may be family members or friends of any age!)
No other resources may be brought to the factory and used for production purposes.
Quality constraints and specs: 1/8th inch tolerances (this means, the dimensions can be 1/8 less or more than stated on t he spec sheet and still be a good product)
Planning/ preparation Unlimited time frame.
time: During this time period, you may do anything you want to design your production process and prepare for production, EXCEPT make any part, or complete any step in the process (i.e. cutting pieces of tape, tracing and/ or cutting on paper that will become part of a final product is NOT allowed) that contributes to a finished product that will be sold to the customer. You MAY color the paper if needed during the preparation stage.
Production time: 20 minutes
You will need to set a timer to ensure you do not go beyond the 20-minute time frame.
Assignment Due: 1) Preplanning questions for the customer – During the planning/ preparation stage, please message me with any questions you have about what the customer wants or what might not be clear from the product specification sheet. Note: It is a 2-dimensional product. The arrows indicate the dimension of each part. Parts can either be taped or glued together, but tape cannot appear on both sides of the product. Markings can show on either side.
2) Just before starting production, message me with the quantity of sheets of paper you have purchased to use during the 20-minute production time period.
3) Just after the production period, please message me with the total number of items completed and the number of people employed, besides yourself, and send me two photos of your completed products. In one photo, display all items individually in rows (i.e. don’t put them in a stack) and take a photo of all completed units. (If more than one photo is necessary, that is fine.) For the second photo, take one of the products that you created and line up a ruler on the vertical side of the product and another one on the horizontal side of the product so that I can see the measurements of your products. I will visually inspect the products for obvious defects and inform you if any units were not accepted by the customer. (This is why you want to make sure I can see each item in your photo).
4) Submit a write-up answering the following questions. These should be submitted to the “Production Simulation Assignment” under the current learning unit module.
- Provide a discussion of what planning and analysis you did before the production period started.
- Explain the process steps (i.e. who did what task/s if you employed other people), and how each task was completed – be as specific as possible! Do NOT just say “so and so cut, someone else taped,” etc. Provide details AND include diagramsof the specific steps used in constructing the product, i.e. how did you draw parts on the construction paper to get the most parts from each sheet, what lines were drawn on the paper to aid in cutting, etc.).
- Provide and explain two suggestionsas to how you could improve your company’s performance using the existing resources. Be as specific as possible – for example, don’t just say, “Make the product faster.” You need to explain what you would change in the process, and why or how this change will improve your company’s performance. This needs to be specific to your company!! What might improve one company may not help another company. Again, explain each of your suggestions! More detail is better! Avoid general suggestions such as “better communication” if you employed other people. These suggestions should be focused on the design of the process. The best answers will explain a specific challenge you encountered during the simulation and what you could do differently to minimize this challenge. Note: Naturally you will be able to make more product with more employees. Your answers should be such that you are not able to change the number of employees or add additional rulers, scissors, tape or glue sticks, or other technology of any kind.
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