1.

Introduction: Briefly describe Littlefield’s operations and the objective of maximizing

cash by day 360.
Littlefield is a company which produces and sells: X. Littlefield competes by promising
aggressive lead times to customers along with refunds in the form of price reductions if lead time
promises are not met.
2. Analysis of the First 30 Days: Identify any bottlenecks or inefficiencies based on the
initial simulation data.

3. Operational Plan for Next 330 Days:

○ Capacity Adjustments: When and where you’ll add or retire machines.
○ Contract Choices: Outline when to switch to higher-paying contracts.
○ Inventory Management: Describe how reorder points will change with demand.
4. Justification of Actions: Use queue theory, utilization analysis, and lead time
calculations as outlined in the Week 5 slides(Week 5 class slide).
5. Conclusion: Summarize the end-game strategy and key actions to maximize cash
balance.

Tactical plan for the game including:

- Anticipated machine purchases

- Machine sales
- Contract choices
- Raw material purchase policies
- Justify all actions

Introduction: Briefly describe Littlefield’s operations and the objective of maximizing cash by
day 360.
Littlefield is a company which produces and sells: X. Littlefield competes by promising
aggressive lead times to customers along with refunds in the form of price reductions if lead time
promises are not met.

2. Analysis of the First 30 Days: Identify any bottlenecks or inefficiencies based on the
initial simulation data.
Station Capacity and Utilisation

Station 1: 2 machines, each with a utilisation of 7.36% per job, can handle up to 13 jobs daily on
average.
Station 2: 1 machine with a utilisation of 3.78% per job, allowing up to 26 jobs daily.
Station 3: 1 machine with a utilisation of 1.68% per job, handling up to 59 jobs daily.

We have conducted analysis column by column.

Daily Average of Jobs waiting for kits

At present, no jobs were recorded as waiting for kits. This means that the initial inventory and
reorder policies were sufficient to keep production going smoothly without delay.

= Every job was able to access the kits (raw materials) it needed as soon as it entered the
production queue.

The factory's current settings for when to reorder kits and how many kits to order each time
(defined by a reorder point of 4,500 kits and an order quantity of 6,000 kits) are OKAY for the
early demand levels

Given the 14-day lead time for kit delivery, the system managed to restock kits before inventory
depleted to a critical level. Increasing demand over time may lead to delays if the reorder point
or order quantity isn't adjusted upward or if the production rate increases, leading to quicker
inventory consumption.

Number of jobs accepted each day

Contract 1 → average number of jobs accepted per day is 5,33 = current demand level aligns
with the factory’s processing capacity, as indicated by relatively low utilization rates across
stations

The wide Daily Range of Jobs Accepted signals

On its busiest day, the factory accepted 15 jobs. → this in fact coincides with Day 29, where
there were more kits in queue (17). On the least busy day (Day 2), only 1 job was accepted
→ 0 kits in queue on this day

Machine utilisation rates/Kits in queue

Station 1 (Board Stuffing):

● Average utilization is 37.43%.

 ● Maximum queue length reached 17 jobs, suggesting a bottleneck, though the utilization
remains moderate. However if demand increases as expected, then Station 1 will become
a problematic bottleneck MORE ON THIS
Station 2 (Testing):

● Average utilization is 19.63%.

● Maximum queue lengths were 1 job and 0 jobs, respectively, indicating no significant
delay at these stages.
Station 3 (Tuning):

● Average utilization is 8.73%.

● Value for kits in queue is 0 always → might signal that such a low amount of kits
reach this station together that none of them get stuck
These values suggest that the machines are underutilised, indicating capacity to handle an
increase in demand.

Number of completed jobs each day

Contract 1 → has a 7-day lead time for each job with a revenue of $200 per job if completed
within this period

● Initially = the factory may only have taken orders under Contract 1 because it offers a
more achievable lead time (7 days), which aligns better with the factory’s capacity and
current demand.
● 5.23 jobs were completed on average per day for Contract 1

Contract 2 and 3 → have shorter lead times (1 day and 0.25 days, respectively) with higher
revenue per job but stricter completion requirements.

● Given the factory’s throughput and utilization levels at Stations 1 and 2, it may not be
feasible to complete jobs this quickly without risking late deliveries.
● Therefore, the factory likely chose not to accept jobs under these contracts to avoid
penalties for delayed deliveries.
Daily Average Revenue per job

Contract 1 → factory only completed jobs under this contract = fixed revenue of $200 per
job (if completed within the 7-day lead time).

⇒ This explains the consistent revenue per job with no variation across days → $6000 was
earned over the first 30 days
Contract 2 and 3 → they have higher potential revenues ($225 and $250) but were not
utilized because the factory prioritized reliability in lead times over maximizing revenue per
job. This suggests a conservative approach where Littlefields wants to focus on achievable
completion rates to secure consistent revenue without risking penalties for late deliveries.

Daily Average Job Lead Time

For contract 1, the average lead time is approximately 0.218 days = about 5.2 hours. The longest
lead time recorded was 0.411 days (around 9.9 hours) and the shortest was 0.196 days (around
4.7 hours).

The average and maximum lead times are well below the promised 7-day lead time for Contract
1. Therefore, the factory has a strong capability to fulfill orders quickly. This is advantageous for
meeting demand reliably and maintaining customer satisfaction.

No jobs were accepted under contracts 2 and 3 in the initial 30 days, so their lead times are zero.

Cash balance at the end of each day

(Day 1) Starting Cash Balance: $500,731

(Day 30) Ending Cash Balance: $474,414

Average Cash Balance: $511,507

The decline in cash indicates that optimising inventory and capacity in response to growth in
demand will be critical.

For this case, we have found the Queue Theory to apply well, as they are currently
underproducing and will have issues as

3. Operational Plan
● Capacity Adjustments:
● Station 1 (Board Stuffing): consider purchasing more machines $25,000 to avoid
bottleneck and increase capacity. Optimise job release timings to prevent overwhelming
the station, perhaps by smoothing job releases during peak hours.

● Station 2 (Testing): FIFO- look at the scheduling policy. This station handles 2 steps:
step 2 and step 4.
○ If the machine is busy, incoming jobs (whether they need Step 2 or Step 4) wait in
line based on arrival time. As a result, both Step 2 and Step 4 jobs are effectively
“competing” for the same resource under the FIFO rule.
 ● Prioritise Step 2 if:
○ High queue or backlog at Station 1
○ Need to increase flow through early stages
○ Demand surges or high job release rates
○ Less emphasis on strict lead times
○ High WIP (Work in Process) accumulation at Station 2

● Prioritise Step 4 if:

○ Tight lead times or high revenue impact from delays.
○ Low queue at Station 1 and need to clear out final stages.
○ Anticipated peak demand period.
● FIFO if:
○ Balanced workload and no pressing urgency for job completion.
○ Low WIP (Work in Process) and short queues at Station 2.
○ Moderate demand and balanced utilisation across stations.
● Station 3 (Tuning): this station has a lot of capacity so it can be used as a flexible station
to accommodate the overflow

Contract Choices:
Given that the factory is comfortably meeting the 7-day lead time, there is room to consider
Contracts 2 and 3 (with 1-day and 0.25-day lead times) if demand grows and capacity allows for
it.
Inventory Management: Describe how reorder points will change with demand.

4. Justification of Actions: Use queue theory

Conclusion: Summarize the end-game strategy and key actions to maximize cash balance.

Queue Theory and Utilisation Analysis

Utilisation Rate (ρ)

λ
ρ=
μ×s

ρ = Utilisation rate (needed to keep below 100% in order to keep the system stable)

λ = Arrival rate: how many jobs arrive per hour or day (demand)

μ = Service rate: the number of jobs a machine can process per time unit
s = Number of machines: we can adjust this number to see how much adding a machine can
decrease the utilisation rate while the Arrival rate (λ) increases

- We need to keep the utilisation below the full capacity (80-90%) not to the max

How to Use Queue Theory at Littlefield

● Keep machines busy but not overloaded.

● Add machines if jobs start waiting too long in line.
● Prioritize final steps to finish jobs faster.
● Shorten lead time by keeping work flowing smoothly.
● Predict when machines might get overloaded and act before it happens.
● Make sure the number of jobs matches your factory’s capacity.
● Keep enough raw materials on hand to prevent delays.

Average Waiting Time (Wq)

ρ CV 2a CV 2s
W q❑ =τ ( )( )
(1−ρ) 2

W q❑ = Average time in queue

τ = Service time: how long it takes to process one job

ρ = Utilisation rate
❑
CV a = Coefficient of variation for the arrival time: a measure of variability in job arrivals

❑
CV s = Coefficient of variation for the service time: a measure of variability in how long it takes
to process jobs

W q❑= Waiting time: use this to identify bottlenecks → if the waiting time is long, it signals
that the station is becoming a bottleneck. This leads to longer lead times

QUEUEING THEORY - gpt help

[potentially conclusive thought → Littlefield should aim to reach Contract 2 and XYZ is
how they should do it]
[read with critical eye of answering following questions for operational plan of the next 330
days: Which decisions do you plan to make? In which order? When? Why?]

Key Queuing Metrics and Their Implications

1. Arrival Rate (λ): This is the rate at which jobs (or demands) arrive at each station in
Littlefield. Knowing λ helps predict workload intensity at each station.
○ Action: Track daily and weekly arrival rates and anticipate changes in demand
phases (e.g., growth until day 240, then a steady or declining phase).
2. Service Rate (μ): This measures how quickly a station processes jobs, determined by the
inverse of the service time (average time per job).
○ Action: Optimize the service rate at bottleneck stations like Station 1. Consider
additional machines to increase μ, thereby reducing the chance of queue buildups.
3. Utilization Rate (ρ): Utilization (ρ = λ/μ) indicates how busy a station is. High
utilization suggests potential queue growth.
○ Target: Aim to keep ρ below 85% at critical stages like Station 1 to prevent long
waiting times, especially as demand grows.
4. Waiting Time in Queue (Wq) and Total Time in System (W): Waiting time (Wq)
reflects the delay before processing starts, and total time (W) includes the processing
time.
○ Goal: Use queuing formulas (e.g., Wq = (scale effect) x (utilization effect) x
(variability effect)) to monitor and minimize waiting times, particularly as
demand fluctuates.
5. Queue Length (Lq) and System Length (L): These represent the number of jobs waiting
and in-process, respectively.
○ Monitoring: Track Lq at each station, particularly Station 1, as it has shown
potential bottlenecks. Adjust resource allocation to keep queues manageable.

Applying the Queueing Formula

For a single server (Station 1 in Littlefield’s case), the average waiting time in the queue (Wq)
can be approximated as:

Wq=τ⋅ρ1−ρ⋅(CVa2+CVs2)2Wq=1−ρτ⋅ρ⋅2(CVa2+CVs2)

Where:

● ττ: Average service time.

● ρρ: Utilization rate.
● CVaCVa: Coefficient of variation for arrival times, indicating variability.
● CVsCVs: Coefficient of variation for service times.

This formula breaks down into:

 ● Scale Effect: Higher service time (ττ) increases Wq.
● Utilization Effect: As ρ approaches 1, waiting time grows exponentially.
● Variability Effect: Greater variability in arrivals or service times (CVa and CVs)
increases waiting times.

Strategies Based on Queuing Theory Insights

1. Capacity Adjustments:
○ Station 1 (Board Stuffing): With high utilization (around 37%) and expected
demand growth, add a machine as soon as Wq starts climbing disproportionately.
This will improve μ, reducing ρ and Wq.
○ Stations 2 & 3: Given lower utilization, these stations may only need fine-tuning
(e.g., FIFO or prioritizing jobs based on deadlines) rather than additional capacity.
2. Prioritization and Scheduling:
○ Implement policies like FIFO at Station 2, but adjust to prioritize steps that
unblock bottlenecks at Station 1.
○ If demand surges or job release rates increase, prioritize earlier stages to reduce
system-wide congestion.
3. Contract Selection:
○ Stick with Contract 1 until capacity stabilizes. With stable lead times and enough
capacity at Station 1, consider higher-paying contracts like Contracts 2 and 3, but
monitor utilization and waiting times closely.
4. Inventory Reorder Policies:
○ Increase reorder points gradually as demand increases to avoid job delays due to
inventory shortages. A small increase initially (e.g., from 4500 to 5000 kits) can
prevent bottlenecks caused by raw material delays.
5. Queue Management Insights:
○ Use psychological principles for any manual oversight to mitigate perceived
waiting times. For example, during expected high demand periods, communicate
accurate lead times to team members to help manage expectations.
6. Queueing Theory for Decision Justification:
○ Utilize queueing formulas to justify each capacity adjustment (e.g., purchasing
new machines) based on projected reductions in waiting time.
○ Calculate changes in utilization rates and waiting times when deciding whether to
retire or add machines at each station, especially in response to demand phases.

Conclusion

Your action plan for the next 330 days should continuously adjust capacity and prioritize
contracts based on queuing indicators like utilization rate and waiting times. By leveraging
queuing theory, you can quantitatively justify machine purchases, contract changes, and reorder
policies while ensuring Littlefield’s operations remain efficient and capable of meeting demand,
thus maximizing cash by day 360.
What happened during 30 days in terms of: contracts, raw materials management, debt
management, testing schedule, capacity management at each station?

I. Analysis of the first 30 days

For the recommendation after 30 days- we
can use the simulation to get data of contract
2,3?? - to analyse more?

Machine Purchase and Retirement: Costs

vary by station, with Station 1 machines
costing $25,000 and those for Stations 2 and 3
costing $75,000. Machines can be retired for
$10,000 each, but retiring machines is
generally less favorable than expanding
capacity when needed.

Demand Phases:
○ Days 0–240: Expect steady growth in demand. You'll need to plan capacity
expansions (like adding machines) and inventory orders to avoid bottlenecks and
maintain lead times during this period.
○ remain constant from day 240 to day 300
○ decrease at a constant rate from day 300 to day 360.

Station Capacity and Utilisation

Station 1: 2 machines, each with a utilisation of 7.36% per job, can handle up to 13 jobs
daily on average.

Station 2: 1 machine with a utilisation of 3.78% per job, allowing up to 26 jobs daily.

Station 3: 1 machine with a utilisation of 1.68% per job, handling up to 59 jobs daily.
Analysis per each column of data:

“Daily Average of Jobs waiting for kits”

At present:
- No jobs were recorded as waiting for kits → this means that the initial inventory and
reorder policies were sufficient to keep production going smoothly without delay.
= Every job was able to access the kits (raw materials) it needed as soon as it
entered the production queue.
 - The factory's current settings for when to reorder kits and how many kits to order each
time (defined by a reorder point of 4,500 kits and an order quantity of 6,000 kits) are
OKAY for the early demand levels
- + Given the 14-day lead time for kit delivery, the system managed to restock kits before
inventory depleted to a critical level.

For the future:

Increasing demand over time may lead to delays if:

1. The reorder point or order quantity isn't adjusted upward.

2. The production rate increases, leading to quicker inventory consumption.

“Number of jobs accepted each day”

Contract 1 → average number of jobs accepted per day is 5,33 = current demand level aligns
with the factory’s processing capacity, as indicated by relatively low utilization rates across
stations

The wide Daily Range of Jobs Accepted signals

- MAX: On its busiest day, the factory accepted 15 jobs. → this in fact coincides with
Day 29, where there were more kits in queue (17)
- MIN: On the least busy day (Day 2), only 1 job was accepted → 0 kits in queue on
this day

(Over the first 30 days, the factory accepted 160 jobs in total)

MACHINE UTILIZATION RATES / KITS IN QUEUE

Station 1 (Board Stuffing):

- Average utilization is 37.43%.
- Maximum queue length reached 17 jobs, suggesting a bottleneck, though the utilization
remains moderate BUT if demand increases as expected then Station 1 will become a
problematic bottleneck

Station 2 (Testing):
- Average utilization is 19.63%.
- Maximum queue lengths were 1 job and 0 jobs, respectively, indicating no significant
delay at these stages.
Station 3 (Tuning):
- Average utilization is 8.73%.
- Value for kits in queue is 0 always → might signal that such a low amount of kits
reach this station together that none of them get stuck

= values suggest that the machines are underutilized, indicating capacity to handle an increase in
demand.

“Number of completed jobs each day”

Contract 1 → has a 7-day lead time for each job with a revenue of $200 per job if completed
within this period
- Initially = the factory may only have taken orders under Contract 1 because it offers a
more achievable lead time (7 days), which aligns better with the factory’s capacity and
current demand.
- 5.23 jobs were completed on average per day for Contract 1

Contract 2 and 3 → have shorter lead times (1 day and 0.25 days, respectively) with higher
revenue per job but stricter completion requirements.
- Given the factory’s throughput and utilization levels at Stations 1 and 2, it may not be
feasible to complete jobs this quickly without risking late deliveries.
- Therefore, the factory likely chose not to accept jobs under these contracts to avoid
penalties for delayed deliveries.

“Daily Average Revenue per job”

Contract 1 → factory only completed jobs under this contract = fixed revenue of $200 per
job (if completed within the 7-day lead time).
⇒ This explains the consistent revenue per job with no variation across days → $6000 was
earned over the first 30 days
Contract 2 and 3 → they have higher potential revenues ($225 and $250) BUT were not
utilized
WHY? Because the factory prioritized reliability in lead times over maximizing revenue per job.
= This suggests a conservative approach = focus on achievable completion rates to secure
consistent revenue without risking penalties for late deliveries.
For the future: As demand grows → explore options of contract 2 and 3 more

“Daily Average Job Lead Time”

Contract 1: Average lead time is approximately 0.218 days = about 5.2 hours
MAX: The longest lead time recorded was 0.411 days (around 9.9 hours).
MIN: shortest lead time recorded was 0.196 days (around 4.7 hours).

- The average and maximum lead times are well below the promised 7-day lead time for
Contract 1. Therefore, the factory has a strong capability to fulfill orders quickly. This is
advantageous for meeting demand reliably and maintaining customer satisfaction.

Contracts 2 and 3: No jobs were accepted under these contracts in the initial 30 days, so their
lead times are zero.

However, given that the factory is comfortably meeting the 7-day lead time, there is room to
consider Contracts 2 and 3 (with 1-day and 0.25-day lead times) if demand grows and capacity
permits.

“Cash balance at the end of each day” ($1000)

(Day 1) Starting Cash Balance: $500,731

(Day 30) Ending Cash Balance: $474,414

Average Cash Balance: $511,507

= decline in cash indicates that optimizing inventory and capacity in response to demand growth
will be critical

Operational plan for the next 330 days:

Recommendation/ how to maximise the production flow

Station 1 (Board Stuffing): consider purchasing more machines $25,000 to avoid bottle neck
and increase capacity. Optimise job release timings to prevent overwhelming the station, perhaps
by smoothing job releases during peak hours.
Station 2 (Testing): FIFO- look at the scheduling policy. This station handles 2 steps: step 2 and
step 4.

If the machine is busy, incoming jobs (whether they need Step 2 or Step 4) wait in line based on
arrival time. As a result, both Step 2 and Step 4 jobs are effectively “competing” for the same
resource under the FIFO rule.

Prioritise Step 2 if:

- High queue or backlog at Station 1

- Need to increase flow through early stages
- Demand surges or high job release rates
- Less emphasis on strict lead times
- High WIP (Work in Process) accumulation at Station 2

Prioritise Step 4 if:

- Tight lead times or high revenue impact from delays.

- Low queue at Station 1 and need to clear out final stages.
- Anticipated peak demand period.

FIFO if:

- Balanced workload and no pressing urgency for job completion.

- Low WIP (Work in Process) and short queues at Station 2.
- Moderate demand and balanced utilisation across stations.

Station 3 (Tuning): this station has a lot of capacity so it can be used as a flexible station to
accommodate the overflow

DATA ANALYSIS -
- All averages are in the shared EXCEL
- Get an idea of capacity and potential bottlenecks in the system
- Average revenue per day/month - 200 per job
- Do we have numbers for their costs?
- Average number of completed kits per day/month
- Understand why there are no orders with Contract 2 and 3
 - They stuck to contract 1 because it depends on factory performance - but if capacity were to increase they could
have a shorter contract → but here their performance did not get to those deadlines so they stuck to contract 1 [make
part of the operational plan ]
- Bottleneck is probably in station 1 (see day 19, 29 as example) → why is this? MAYBE because of customer customization and so
it takes more time.
- Lead Time Control: Set throughput and queue time targets for each station, particularly for Station 2, to maintain fast processing times
and keep lead times low. Aim to keep queue lengths minimal, especially during high-demand periods.
- Revenue is depending on lead times: Station 1 should be prioritized for any capacity expansions, as delays here would impact the
entire process.

APPENDIX: