Assignment - Simulation
Topic: Balancing Process Capacity
Objective: A car wash company wants to maximize its capacity utilization and total profits for the eight-hour workday (9:00 am to 5:00 pm). The operations manager of this company should work on two scenarios (challenges): (a) the no variation and (b) the variation. In the former scenario, there is no variability in demand and process (supply), while in the latter scenario, variability is present.
Key concepts: Capacity utilization; Cycle time; Throughput: flow rate (or throughput rate) and flow time (or throughput time); Inventory (or work-in-process); Little's law; Variability in demand and process
Specifications: The customer arrival rate varies according to the time of day, with a peak in demand from 12:00 pm to 1:00 pm. Serving as the operations manager of the car wash company, you are responsible for allocating the company's entire budget of $3 million to the three stages of the process (i.e., the vacuum, the machine wash, and/or the hand dry stations) to maximize efficiency and thereby overall profitability.
1. Please work on the two scenarios/challenges (i.e., no variation and variation) and run the simulations as many times as you want to identify the: (a) maximum profit, (b) optimal number of cars should be washed to maximize profits, (c) optimal budget (available budget: $3 million) allocation to the three stages.
2. Please provide key findings identified while running the simulations, which would facilitate profit maximization, and a screenshot with capacity utilization graphs for the three stages referring to your optimal solution. Kindly provide two screenshots, one for each challenge.
3. Drawing on the simulations you performed, would you prefer to work in an environment without variation (i.e., Challenge 1) or with variation (i.e., Challenge 2)? Justify your answer.