Again Agame team assignments

Rule change for 8 October:

The management team at Again Agame, after careful analysis, has decided that producing toy cups with a lot size of lot for lot is inefficient. After reviewing the cup making process, they have concluded that the lot size should be 25 units. Based on current capacity, they have determined that the most cups they can make in one week is 125 cups.

The $9.00 set-up fee has not changed. Every time you order cups, you will be assessed a $9.00 set up fee, no matter how many cups you order.
 

Here are the guidelines for the Again Agame case.

Your evaluation on this case will depend upon your report and your performance in the simulation.

The report:

I would guess that this report would between 1 and 5 pages. However, you should make it as along as you think is necessary to get the job done.

Your report should address the following issues:

1. How much would you order and what would the frequency of the orders be? (Hint: You can use the past history as representative of the demand and the extra simulation sheets can be "practice".)

2. What inventory policy or rule for managing the inventory in this case would you recommend? Why?

Use a professional format - something that you could hand into your boss. You are free to use bullet lists, section headers and other formatting ideas. Remember that the only place your team name should appear is the last page, and that this is the only thing that should appear on that page.

The simulation:

In addition to your report, please bring a Zip disk with your spreadsheet template. I am working to reserve the computer lab, so that you can have access to Excel during the simulation. You will be asked to make the ordering decisions period by period. You will e-mail me your spreadsheet at the end of the class.

Please remember that this simulation may take two class periods to complete.

Further details

Your starting inventory position is 44 units on Monday morning of week 1.

If you order something in week 1, it will not be ready until Monday morning of the following week.  Thus, (using the case’s terms) Monday Morning Inventory – Week’s Demand = Friday Night Inventory.  Monday Morning Inventory for week 2 will include Number Ordered from week 1.

To start the simulation, you will tell me how many units you want to order for week 1.  I will then tell you actual demand for week 1. I will give you some time to update your spreadsheets.  Then you will tell me how many units you want to order for week 2.  I will then tell you the demand for week 2.  The amount of time you get between rounds will probably start around 5 minutes and get smaller as you get into the swing of things.

We will run through at least two scenarios.  The first will be as the case describes it.  In the other scenarios, I will modify some of the factors.  This may require some slight modifications of your spreadsheets, which I will describe.

***Note: Include at least 20 weeks on your spreadsheets.  The number of periods we will simulate will be announced at some point during the simulation. ***

Just to review, here is what I need from you:

1. An electronic copy of your strategy write-up. If you have only given me a paper copy, I will still need the electronic file by 5:00 p.m. today (6 October).

2. By the start of Wednesday's (8 October) class, please send me a workbook file containing at least two worksheets. The first should be your cost calculations (i.e., the spreadsheet from the case) from the simulation today. The second worksheet should be these same calculations with the 11 periods of demand already filled in. Since you know the demand in advance, you should be able to come up with a very low cost series of orders. Title this worksheet (on the tab of the bottom) "MRP". The name of the entire workbook file should be "team_name - scenario 1".

We will do the simulation again on Wednesday. I will change some of the rules. More information about these rule changes may or may not be forthcoming.

At the end of Wednesday's class, I will need two things from you. 1. A copy of your team rating form. Everyone should fill one out. If you do not, I will assume that you have ranked everyone on your team a "10". You can download a team rating form from the class web page.

2. A copy of your cost spreadsheet from Wednesday's class. This workbook file should be named "team_name - scenario 2".

FAQ (updated 2 Oct 03)

For calculating the lot size and the frequency, what kind of ordering procedures do we have to consider?  Is it EOQ, POQ and PPB?  Or do we have to consider also other procedures?

You can consider any type of procedure.

In regards to question #2 on the Again Agame assignment, we are a little confused as to what you are looking for.  Can we make company rules, from what there already is (i.e. backorders).  OR is the question looking for why we have chosen what we did? 

Yes. You need to state what your policy is and why you have chosen that policy. However, as is clearly stated in the case, you cannot accept backorders. As the wording in the case indicates, if you are unable to fill an order, you must forgo the order and pay a penalty.
 

Our group was wondering how to interpret $9.00 setup cost.  Is it $9 to produce your weekly demand?

Every time you order some cups, no matter how many cups you order, it costs you a flat $9.00.  If you don’t order anything, you don’t pay a setup fee.

How will we be graded? On presentation, performance vs. other groups, etc.

50% will be based on the paper.  In your paper, you need to clearly state your decisions and explain how you came to them (i.e., why are your plans better than other possible plans).  50% will be based on your performance in the simulation.  You will be required to send me a copy of your spreadsheet showing your costs.

Suppose you have 2 groups: one group gives you a very poor 1 page report about what they did and why and did VERY WELL on the simulation, vs. another group that wrote an elaborate 4-5 page paper detailing why THEY did what they did but performed POORLY in the simulation. Which one would receive a better grade?

Roughly speaking, they will end up with the same grade.

How will you evaluate performance in the simulation?  What matters more – lowest cost or customer service?

They both matter.  Note that mathematically, it is most likely possible that Team A may have the lowest cost, but they may also have a few stockouts.  Team B may end up with costs just a bit higher than Team A, but with no stockouts.  Who has the better result?  There is no exact formula for figuring this out.  What I will do is take all of your results and attempt to rank them based on cost and customer service.  This ranking, however, will be more of a grouping, in that the two teams (A and B) in this example would probably be lumped into the same group.  From here, it is relatively easy to rank the groups in terms of letter grades.