(EPQ) Exercise Instructions

ScrimmageSim Business Simulation
Economic Production Quantity (EPQ)
Exercise Instructions
Summary:
Tenant: 600
User: WMU-##
Password: password
Demand rate: 4,000 cases per day with variability
Production rate: 12,000 cases per day with variability
Setup: 1 day
Transfer delay: 1 day
Setup Cost: $10,000
Inventory Holding Rate: 20% of COGS
Sales Price: $55.34 per case
COGS: $28.47 per case
©2014 Bret J. Wagner Ph.D.
Open your browser to the web site scrimmagesim.com, then click on Access
Simulation:
Click on Access Simulation
Then click on Log In:
2 Click on Log In
Enter your account information (Tenant, UserId and Password) then click on Log
in:
Enter account data
If this is your first time logging into the simulation, you will be required to reset
your password:
Reset Password
3 After resetting your password, you will be at the main menu. Two simulations are
available: Ordering and ROP. Select the Ordering simulation:
Select EPQ
This will produce the following screen:
Select the EPQ Problem Scenario
Selecting the EPQ Problem Scenario will produce the following screen, which
lists the nine runs available for your simulation. You can change the description
of the run to help you manage your different simulation runs. Do this by clicking
on the pencil icon in the data grid:
4 Click on the pencil icon to edit the description
Type the new description, then click on the save icon:
Type new description, then click on the save icon
To confirm the new description in the pull-down list, click on the refresh icon.
Note that you do not have to do this for the correct description to be used by the
simulation:
5 Pull-down list has old description—refresh
the web page to get the new description
After refreshing the pull-down list, select the run:
Select first run
With the scenario and run selected, the main menu of the simulation is displayed,
along with the container details (tenant, scenario and run):
6 Container details
To look at the demand history, select Orders under the Demand menu:
Select Demand!Orders
This will display the order history for the previous year. Note that the demand
comes from a normal distribution with mean = 4,000 and significant variability:
Click Return to go back to the main menu
Note that the data is split to multiple pages
7 You can display the order history graphically by following the menu path
Demand!Graph:
and you will get the following screen:
Select the Material All Wheat Bran
Then click Draw Graph:
Click on Draw Graph
This will produce the following graph:
8 Click Return to go back to the main menu
Click Return to get back to the main menu, then follow the menu path
Inventory!Status:
This will produce the following screen:
9 Note that the initial inventory
for the simulation is 40,000
cases
Click on the Open Window icon to keep this screen open and work in a new tab:
Click on Open Window to get a second tab
In the new window, select Inventory!History Graph:
10 This will produce the following window:
This window will show a graph of the inventory level for up to three different
materials (products) during the simulation. There is only one material in this
simulation—All-Wheat Bran—so select this material and then click on Draw
Graph:
Select AliCat Ale, then click on Draw Graph
The graph currently shows just one data point as the simulation is at the
beginning for this run:
11 First data point
Click on the Open Window icon to get another browser tab:
Click on Open Window to get a new tab
Then select the menu path Results!Financial Statement:
12 This screen provides a pseudo-financial statement for Waldo Mart:
This statement shows only the basic items needed to support the simulation.
The company stats with the asset of 40,000 cases of All-Wheat Bran, which have
a value of $1,138,800. Maximum net income is the goal of the simulation.
For this simulation, manually advancing the simulation time will produce the best
results. To do this, open a new window and use the menu path
Simulation!Manual:
This will produce the following screen:
Click on Increment Time
13 This screen allows the user to advance the simulation one increment at a time.
In the case of the Waldo Mart simulation, the time increment is equal to one day,
so clicking on the Increment Time button advances time one day. Clicking
Increment Time produces the following screen:
Time has advanced one day
Switch to the Inv Status tab to view the company’s inventory:
Inventory still shows 40,000 cases, as
the screen does not automatically
update. Click update to refresh the
data shown on the screen
Clicking on update produces the following inventory status report:
14 Inventory is now 35,869 cases
Switch to the Inventory History tab:
Click on the Draw Graph
icon to refresh the data
Clicking on the Draw Graph icon will refresh the graph data:
15 The graph now shows the
change in inventory
Finally, click on the Financial Statement tab:
Click on the Update icon to refresh the financial statement data:
Click on the Update
to refresh the data
Note that there are changes to the financial statement. On the income statement
side, there is now a sales figure, a cost of goods sold figure and an inventory
expense figure. The Net Income figure is sales minus the costs (COGS, order
expense and inventory expense). Your goal for the simulation is have the
maximize net income over the simulation period of three months.
16 The goal is to maximize net income
Return to the simulation tab, then advance the simulation to January 7:
Click on Increment Time until it is January 7
Switch to the inventory history screen and click on Draw Graph to update the
date:
17 Click on the Draw Graph
icon to refresh the data
You can see the inventory is decreasing in a fairly linear (straight line) pattern.
Open a new window, then select Production!Create Order:
Select Create Order
Select the (only) line, which is for All-Wheat Bran
:
Click on Select
Clicking on Select will produce the following window:
18 Enter 150 for Quantity, then click
on Create Production Order
Enter 120,000 for Quantity and then click on Create Production Order and the
production order information will show in the grid:
Click on Return
to close this tab
Production Order for
120,000 cases has
been created
Click on Return to close the Prod Create tab, then make sure the Production
Order tab is selected and click on Return:
19 Confirm you are on the Production
Order tab and then click on Return
Next, follow the path Production! Order Status:
This will product the following window:
There are 120,000 cases still to produce
in this order, and 1 day (86,400 seconds)
of setup to be performed first
Switch to the Run Simulation tab and increment the simulation one day:
20 Increment the simulation to January 8
Switch back to the Prod Status tab and click on update:
Click on Update and there
is no setup time remaining
Increment the simulation one more day to January 9 and update the production
order status:
12,000 cases have been produced
21 Switch to the inventory status screen and click update:
The 12,000 units produced are in
transit and not available for sale
Advance the simulation one more day to January 10 and update the inventory
status:
The 12,000 units produced are
now in inventory and available
The simulation is programmed to move production to inventory in lot-for-lot
fashion, that is, each day’s production quantity is moved to inventory, rather than
waiting for a larger quantity (or the entire production order) before movement.
Increment the simulation two more days until January 12, then update the
inventory status:
22 Inventory is building
Switch to the inventory history graph and redraw it:
Inventory is building
Advance the simulation to January 20, and then update the inventory graph:
23 Note the peak inventory
is much less than the
120,00 units produced
Run the simulation until April 1, 2015. Manage your production to maximize net
income. Remember the other features of the simulation you have used in the
past:
Inventory!Lost Sales
Simulation!Rebuild Run
Containers!Run!Select Run
Containers!Run!Run Summary
Containers!Run!Save as Graded
Results!Comparison
24

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