Littlefield Game Report

Littlefield Technologies is a highly automated company specializing in blood samples testing. The
process includes three types of machines and four stages. The four stages involve sample preparing
(machine 1), testing (machine 2), centrifuging (machine 3), and additional testing (machine 2). The
objective of the game is to maximize the cash on hand by managing the capacity, WIP limit, and
the queue discipline.

Our team began by analyzing the first 50 days arrival rate data. The demand was predicted to
increase at a roughly linear rate for three months. Thus, we used the regression line analysis to
estimate the demand for the next 100 days. We found that the demand would follow y=0.076x +
1.11 and we got 12.57 orders for day 150. Next, we decided the number of machines to purchase
by comparing capacity of each machine with the capacity required to fulfill the demand.

To calculate the capacity of each machine, we used the formula: utilization rate = arrival
rate/service rate. Steps to calculate the capacity of each machine:
1) Find the capacity of each day using the utilization rate formula. For machine 2, we double the
arrival rate assuming the arriving job went through the testing stage twice on the same day.
2) Average the daily capacity of each machine to get the service rate. Then we found that:
Capacity of machine 1 = 8.19 orders/day
Capacity of machine 2 = 13.99 orders/day
Capacity of machine 3 = 11.42 orders/day

To calculate the capacity required to fulfill the demand, we used this formula:
Capacity required = Arrival rate / targeted utilization rate
= 12.57 / 0.6 = 20.83 orders/day
Then, we divided the capacity required by the capacity of each machine to determine the number of
machine required (See Table 1).
Table 1. Number of Machine Required
Capacity required Capacity/machine # of machine required
Machine 1 20.83 8.19 2.54
Machine 2 41.66 (20.83 *2) 13.99 2.98
Machine 3 20.83 11.42 1.82
Therefore, we decided to buy one machine 1, two machine 2 and one machine 3 since we already
had one for each machine. Also, we decided to keep 100 WIP limit and FIFO as the queue
discipline.

Starting from day 108, the arrival rate went beyond the forecast up to around 18 orders on day 117.
Thus, the utilization rate of machine 1 and 3 started to grow beyond our target, which was 60%,
and the queue for both machines also started to pile up. As the actual demand has increased to 18,
we estimated that it would further increase to around 20 orders. We also thought that 60%
utilization rate was too low, so we decided to target 70% utilization rate. Using 20 orders as the
new demand and 70% as the new utilization rate, we found the new capacity required (See Table
2). We also calculated the new capacity for each machine from day 51 to 122. Then, we divided the
new capacity required by the new capacity for each machine to determine the new number of
machine required. (See Table 2)
Table 2. New Number of Machine Required
Capacity required Capacity/machine # of machine required
Machine 1 28.57 8.53 3.35
Machine 3 28.57 9.61 2.97
According to Table 2, we found out that we needed to buy two more machines: one machine 1 and
one machine 3. However, we decided to buy only one machine because we assumed that one more
machine should be enough to improve the system. We would like to see how this decision would
affect the system before making additional purchase. We decided to purchase machine 1 instead of
machine 3 because based on our calculation, it indicates that machine 1 was needed more than
machine 3 (See Table 2).

The process went smoothly for several days. However, on day 130 the queue of machine 3
increased and the utilization rate raised up to 1. Therefore, we decided to change the queue
discipline of machine 2 from FIFO to priority 4 on day 136 so that we could reduce the queue on
machine 3 and maximize our profits without purchasing new machine. The system went well until
day 148, but then the revenue started to drop rapidly so we realized that we needed to buy one
more machine 3. We also changed the queue discipline back to FIFO as we considered it as the
best system. Our decision turned out to be good as average revenue started to increase and
eventually remained constant at $1000 until the end of the game.

Before the game ended, we saw that the decreasing rate of demand was faster than the increasing
rate. The average demand from day 210 to day 217 was 8.25 orders and would keep on decreasing.
Comparing the demand with the capacity of each machine that we calculated from the first 50 days,
we got the number of machine required at the end of the game.
Table 3. Number of Machine Required at the End of the Game
Demand (orders) Capacity/machine (orders/day) # of machine required
Machine 1 8.25 8.19 1
Machine 2 16.5 (8.25*2) 13.99 2
Machine 3 8.25 11.42 1
Therefore, we decided to sell two machine 1, one machine 2 and two machine 3.

After the simulation ended, our average revenue decreased for several days, but then it increased
again to $1000. Throughout the game, we managed to maximize the average revenue except for the
period when the queue of machine 3 started to pile up. Therefore, in order to further maximize our
revenue, we should have bought machine 3 at the same time we bought machine 1 as the capacity
calculation showed that one more machine 3 was also required (See Table 2). Another important
factor that we should have considered is the WIP limit. When the demand was very high and the
queue of machine 3 kept on increasing, we should have limited the WIP small enough so that there
would not be too many queues piling up on machine 3.