Little Field

Team Ecowas

November 30, 2011

LITTLEFIELD REPORT

Final cash balance: $376,842.

The factory assembles digital satellite system receivers from kits of components which are purchased from a single supplier. The assembly process consists of four steps that are carried out at three workstations. At Station 1, components are mounted and soldered onto PC boards (Board Stuffing). At Station 2, the boards are tested. At Station 3, the components are tuned. Finally, in the fourth step, the boards go back to Station 2 for final testing. In the 4th step of the process boards are tested again before final delivery to the customer.

Summary of Transactions

The first 115 days of the operations the machines on station 1 on any given day had capacity utilization that ranged from about 39% to 100% with mean of 87% and standard deviation of 15%. However, the average number of kits queued was 182 with standard deviation of 193 and coefficient of variation of 0.83. In order to reduce the variability in queuing times in station 1, a new machine was purchased.

In order to detect defective boards earlier in the process priority was given to step 2 rather than the First in First out (FIFO) rule. However this immediately declined the cash balance and was quickly reversed to the original scheduling rule.

On the 345th day we noticed that average and standard deviation capacity utilization for station one did not deviate much from the observed statistics on the 115th day of the operation. However for station 2 capacity utilization on average was approximately 47% with a standard deviation of 10% with a approximately 8 kits per day were queued at the station. We decided that we could optimize utilization rates by selling a machine.

In a desperate attempt to increase the overall profitability of our firm we opted to pursue a more lucrative contract with our customers on the 345th day. Revenue per contract of $1250 with a lead time of 0.5 days despite the...