Table of Contents - University of Phoenixmyresource.phoenix.edu/secure/resource/OPS571r6/Practice...Updated June 3, 2015 McGraw-Hill Practice Operations 1 Table of Contents Introduction

Instructor Manual Updated June 3, 2015

McGraw-Hill Practice Operations

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Table of Contents

Introduction ................................................................................................................................................................................ 3

Game Description ........................................................................................................................................................................................ 3

Potential Learning Outcomes ................................................................................................................................................................ 3

Description of Modules ............................................................................................................................................................................. 4 Module 1: The Production Process ............................................................................................................................................... 4 Module 2: Managing Suppliers ....................................................................................................................................................... 4 Module 3: Forecasting and Contracts .......................................................................................................................................... 4 Module 4: Human Resources and Capacity Planning ........................................................................................................... 4 Module 5: The New Branch .............................................................................................................................................................. 4 Module 6: Maximize Net Worth ..................................................................................................................................................... 4

System Requirements ................................................................................................................................................................................ 5

How to Access, View and Play Practice Operations ....................................................................................................................... 6 Best Practice Tip ................................................................................................................... Error! Bookmark not defined.

Game Setup .................................................................................................................................................................................. 6

Instructor Account...................................................................................................................................................................................... 6

How to Log In ............................................................................................................................................................................................... 6

Adding a Course ........................................................................................................................................................................................... 7

Setting Up Students and Assignments ................................................................................................................................................ 8 Getting Students Registered ............................................................................................................................................................ 8

Creating an Assignment ......................................................................................................................................................................... 11 Step One: Name and Describe the Assignment ..................................................................................................................... 11 Step Two: Schedule the Start Date, End Date, and How Many Turns are in this Game ....................................... 11 Step Three: Question Settings for the Game ........................................................................................................................... 12 Step Four: Establishing the Score Card ..................................................................................................................................... 13 Step Five: Review the Assignment .............................................................................................................................................. 15

Edit Assignment ......................................................................................................................................................................................... 15

Grading and Metrics ................................................................................................................................................................................ 16 Best Practice Tip ................................................................................................................................................................................. 16

Now Get Started ........................................................................................................................................................................................ 17

Classroom Introduction ....................................................................................................................................................... 17

The Game World ........................................................................................................................................................................................ 17

Targets and Goals ..................................................................................................................................................................................... 18 Industry Connection: Knowledge, Skills and Abilities ....................................................................................................... 18 Knowledge, Skills, and Abilities ................................................................................................................................................... 19 Player Actions and KSAs .................................................................................................................................................................. 20

Practice Operations and Real World Applications ...................................................................................................................... 22 The Operations Management Process ....................................................................................................................................... 22 The Production Process ................................................................................................................................................................... 22 Competitive Bidding .......................................................................................................................................................................... 23 Labor Management ............................................................................................................................................................................ 23


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Service-Oriented Elements............................................................................................................................................................. 23 Client Management ............................................................................................................................................................................ 23 Critical Thinking Questions ............................................................................................................................................................ 23

Teaching Tips ........................................................................................................................................................................... 24

Best Practices and Practice Operations ........................................................................................................................................... 24 Additional Benefits to Instruction............................................................................................................................................... 24 Best Practice Tip ................................................................................................................................................................................. 25

Connecting Game Play with Learning Objectives & Critical Thinking Questions ............................................................ 26

Module 1: The Production Process ..................................................................................................................................................... 26 Follow the Tutorial for Module 1 ................................................................................................................................................ 30 Module 1 Learning Objectives ...................................................................................................................................................... 30 Module 1 Critical Thinking Questions ....................................................................................................................................... 30

Module 2: Managing Suppliers ............................................................................................................................................................ 34 Follow the Tutorial for Module 2 ................................................................................................................................................ 42 Module 2 Learning Objectives ...................................................................................................................................................... 42 Module 2 Critical Thinking Questions ....................................................................................................................................... 43

Module 3: Forecasting and Contracts ............................................................................................................................................... 47 Follow the Tutorial for Module 3 ................................................................................................................................................ 52 Module 3 Learning Objectives ...................................................................................................................................................... 52 Module 3 Critical Thinking Questions ....................................................................................................................................... 52

Module 4: Human Resources and Capacity Planning ................................................................................................................. 58 Module 4 Learning Objectives ...................................................................................................................................................... 70 Module 4 Critical Thinking Questions ....................................................................................................................................... 71

Module 5: The New Branch ................................................................................................................................................................... 75 Module 5 Objectives .......................................................................................................................................................................... 75

Module 6: Maximize Net Worth .......................................................................................................................................................... 75 Module 6 Objectives .......................................................................................................................................................................... 75

Try This ......................................................................................................................................................................................................... 76 Challenge Scenarios ........................................................................................................................................................................... 76 Possible Player-Client Interactions ............................................................................................................................................ 76

Frequently Asked Questions .............................................................................................................................................. 77


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Introduction

Game Description

Operations are the engine that drives a business. Practice Operations puts players in the role of an operations decision maker for a clothing manufacturing company. Play begins with an overview of the heart of that engine – managing the production process. Players review the contract specifications as well as the production process by walking through the production floor and shipping area. Players then analyze the receiving department functions of managing the supply chain and material inventories to ensure client needs can be met. In order to grow the business, players choose which new contracts to pursue and then optimize their receiving, production and shipping departments accordingly. As the business grows, players manage both the human and facility resources in order to meet capacity challenges. Customer satisfaction is a key metric for success. In the final stages of the game, the company puts players in complete control over all areas of operations at the new branch, with the challenge to build the most profitable company possible.

Potential Learning Outcomes

Provides a lively, interactive experience that focuses on student learning through trial and error within holistic game play, where students see how the elements of operations and production come together.

Supports online, out-of-class play and competition among students.

Features game-world data and situations that reflect real-world operational situations.

Highlights the inherently interdisciplinary nature of business by demonstrating that the various functional areas of the company – Human Resources, Manufacturing, Accounting, and Sales – must work together in order to meet company goals.


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Provides an opportunity for actual hands-on practice as an operations manager in a manufacturing scenario.

Provides an opportunity to analyze and evaluate quality considerations in the production process.

Stresses both customer satisfaction and financial results as the key success metrics.

Provides reporting features that make it easy for instructors to assess player performance and decision-making.

Description of Modules

Module 1: The Production Process

Operations is the engine that drives a business. This module focuses on the heart of that engine, managing the production process. Module 1 should take 25-45 minutes to complete.

Module 2: Managing Suppliers

This module unlocks the receiving department, putting players in charge of managing the supply chain and material inventories to meet client needs. Module 2 should take 25-45 minutes to complete.

Module 3: Forecasting and Contracts

In this module, players choose which contracts to pursue, and optimize their receiving, production, and shipping departments accordingly. Module 3 should take 25-45 minutes to complete.

Module 4: Human Resources and Capacity Planning

In this challenging scenario, players will manage both human and facility resources to meet capacity challenges. Module 4 should take 25-45 minutes to complete.

Module 5: The New Branch

In this module, players will have complete control over all areas of their operations, and will be challenged to reach a net worth of $50,000 as quickly as possible. Module 5 should take 1 to 2 hours to complete.

Module 6: Maximize Net Worth

In this capstone module, players again have complete control over all areas of their operations. The goal is to maximize the net worth of the firm over 50 turns. Module 6 should take 1 to 3 hours to complete.


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System Requirements

Computers used to run Practice Operations must meet the Technical Requirements listed below.

Windows OS:

1. Operating systems: Windows XP with Service Pack 3 / Windows Vista SP2 / Windows 7 /

Windows 8.

2. Internet Browser: Firefox version 31 or above OR Internet Explorer 11 or above OR

Google Chrome version 31 or above

3. Memory: 512MB RAM

4. Processor: Intel Pentium 3-4 processor or equivalent/better

5. Video: NVIDIA GeForce 6600 or better OR ATI Radeon 8500, 9250 or better OR Intel 945

chipset or better, 1024 x 768 resolution minimum

6. Internet: 128kbit/s Cable/DSL/LAN connection per computer

7. Hard Disk Space: 500MB free

8. Direct X: DirectX 9.0c

Mac OSX:

1. Operating system: Must have OS X 10.6 (Snow Leopard) or later.

2. Processor: Intel Core 2 Duo (PowerPC not supported)

3. RAM: 1GB System Memory

4. Video Memory: 256MB graphics card or decent integrated graphics chip. Must support

OpenGL 1.5+

5. Internet Browser: Firefox version 31 or above OR Safari 7.1 or above OR Google Chrome

version 31 or above

Apple iPad:

1. Model: iPad2 or later.

2. Operating System: iOS 8 or later.

3. Screen Resolution: 1024x768 or greater.

Android Tablet:

1. Operating System: Android 4 or later.


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How to Access, View and Play Practice Operations

1. Navigate to www.mhpractice.com.

2. In the Sign In box, type in your McGraw-Hill Connect username, which will be the email address

you used to sign up for Connect. Type in your Connect password and click Go. Note: if you do

not have a McGraw-Hill Connect account, or you aren’t sure, please contact your local McGraw-

Hill Sales Representative on the next page.

3. Click on Add Course.

4. On the Create Course page, choose your product from the drop-down menu, Practice

Operations, type in a Course Name (ex., Practice Operations Review) and a Section Name (ex.,

Section 1).

5. Click Submit.

6. Click on Operations Management Module 1 to get started.

7. In a new window/tab, the simulation will start downloading – this may take a couple of minutes

depending on your internet speed.

8. Once the simulation has loaded, you will be greeted by a welcome message.

9. You will note that Module 1 begins with an overview of the game. The purpose of the tutorial

nature of Module 1 is to orient you to the game and the system – information is provided to you

in various steps, and provides some direction as to how to navigate within the simulation.

10. Once you are done reviewing Module 1, close out the window/tab to return to your Practice

Operations course home page to access the other available modules.

Game Setup

Instructor Account

Instructor details will be provided on request from your local McGraw-Hill Education Sales Representative. To contact McGraw-Hill Education, please select the nearest office from the list on these pages: http://catalogs.mhhe.com/mhhe/findRep.do

How to Log In

Once, you have received your unique user name and password from your designated McGraw-Hill Education Sales Representative, you are able to log in to the simulation in a number of ways, including:

Directly through the McGraw-Hill Practice website at: www.mhpractice.com.

If you are using McGraw-Hill Connect you will be able to access the simulation through the Practice Operations link located in the lower right side of your McGraw-Hill Connect account.

http://www.mhpractice.com/

http://catalogs.mhhe.com/mhhe/findRep.do



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If your Connect Account is synchronized with Blackboard you will be able to access Connect, and thus Practice Operations, while logged into your Blackboard course.

If you set up Practice Operations to go directly through the website, you will give your students a URL to use to log in. If you set up Practice Operations to be accessed through Connect, the Practice Operations link will appear in the lower right of Connect when your students are logged in.

Adding a Course

Once you log in, you will see all of your courses in which you plan to use Practice Operations. [Practice Operations is so versatile it can be used as easily for a survey of operations and production course as it can a capstone operations management course]

Players are introduced to the world of Practice Operations through an interactive tutorial that teaches them about the gameplay, user interface, and learning objectives. This tutorial helps students learn how to navigate through Practice Operations in an easy to follow format. Instructors appreciate the tutorial as it helps get students become familiar with the game without having to spend precious class time. Modules 1-4 begin with a brief tutorial presenting any new material covered in those modules. Module 5, the capstone module, does not include a tutorial.

To add a new course, click the Add Course button. Each course must have at least one Section. Choose the product you are creating the course for, input a Course Name and a Section name in the space provided, and click Submit. This takes you back to the Courses screen.

NOTE: Once a course end date has passed, you may delete that course if you wish.


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Click on the course number that you would like to set up.

When you click on Students, you will see all your students who have registered for Practice Operations for this course. As the semester progresses, you can click on any student name to review their assignment status and scores.

Setting Up Students and Assignments

This section walks the instructor through the process of registering students and setting up game Assignments.

Getting Students Registered

Once you’ve created your course, you will need to invite students to join a section by following these steps:

1.) Login to www.mhpractice.com with your username and password.

2.) Make sure to have a course setup (ex., OM 301, or Intro to OM 100) in Practice Operations. If

you do not have a course setup, create a course by clicking on Add Course and title it.



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3.) Click on the section title that you will be adding students to

4.) On the right-side of the screen, under “send this link to invite your students,” copy the link

located in the box and send to your students.

5.) On the “you have been invited to” page, students will click on “Register Now” to begin the

student registration process


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6.) Students will be given the option to either enter their access code or “buy online”.

7.) After the student elects to “buy now” they will be prompted to select their school/university.

8.) The student will be asked to provide their email address to determine whether or not they have

a McGraw Hill account. If the student does not have a McGraw Hill account, they will need to

submit required registration fields, such as their email address, password and security

question/answer.


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Creating an Assignment

Click on Assignment, and then click on the red Create Assignment button. If the button is still gray and not red, this means no students have registered yet for the class.

Creating an Assignment is easy; there are six simple steps:

Step One: Name and Describe the Assignment

In this screen enter a name for the Assignment (a 30-character limit) and an Assignment description. Once you have entered the name and description click on the button continue.

Step Two: Schedule the Start Date, End Date, and How Many Turns are in this Game

For each Practice Operations assignment, the instructor can choose the start date (immediately or at some time in the future) when the simulation will become available to students, the end date, the total number of turns and the number of attempts each student can complete.


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Step Three: Question Settings for the Game

The instructor can choose to use the default Practice Operations questions or can add customized questions for students. In either case, questions are presented to students at the end of each turn.


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If desired, the instructor can also choose to let a student restart an attempt that is already in progress.

To enter customized end-of-turn questions, select the “Use Customized Questions” option and enter your own questions in the indicated areas.

Step Four: Establishing the Score Card

Each module includes a default score card. To customize the scoring process, enter your selected values for each element of the simulation. The scoring schemes must total to 100 points. Hover the mouse pointer over each section to display helpful information about the topic.


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The scoring elements are

Scoring Type – select whether the students highest score, latest score, or an average of all

attempts will be recorded

Goal Achieved – number of points to be awarded if the student achieves the module’s goal

Net Worth – number of points to be awarded through a comparison of the student’s net worth

to those of the class.

o Top 20% of class = 100% of Net Worth Points




Reputation Score - number of points to be awarded through a comparison of the student’s

reputation score to those of the class.

o Top 20% of class = 100% of Reputation Points




Timeliness Score – the percentage of contracts completed on time is multiplied by the possible

points to obtain the timeliness score.


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Step Five: Review the Assignment

This final step allows you to review how you have set up the entire Assignment, and to go back and make changes if need be. Once you have reviewed this Assignment, and are satisfied, click on the Create Assignment button.

At this point the Assignment will show up on the home panel, and as soon as the system has completed the setup it will be displayed as: Ready.

The home panel also shows the number of games being played in that Assignment.

Edit Assignment

Once an assignment has been created, you can still go back and edit it at any time until the assignment becomes active (assignments cannot be edited after their start time). Click on the pencil to the left of the Assignment name to reopen the 5-step assignment creation pages.


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Keep in mind that a few things are not editable: you cannot change a game to start in the past. Also, you cannot create a new game in the edit mode. All other areas may be edited.

Grading and Metrics

Instructors will have access to an Excel spreadsheet that addresses the student’s progress through the course. Here instructors will be able to observe how well students performed in various categories of the game, as well as know if each student was able to complete the module.

Best Practice Tip

Instructors may want to consider having a replay option for their students. This option would allow students who did not successfully complete a module or students who completed the module but were highly engaged, the ability to play again. In order to do this, instructors will simply create an additional assignment.


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Now Get Started

Now that you have the basics of how to set up and use Practice Operations, let’s move into how you can present Practice Operations and turn it into a great classroom experience.

Classroom Introduction

The Game World

In a simulation-based environment, players have the opportunity to explore a wide range of variables;

identify potential options and relationships; and control the various components of the system. The

player navigates their way through an array of “real-life” decision points allowing them to exercise

strategic thinking skills, analyze data, evaluate options, reflect on this input and practice decision-

making; thereby acquiring conceptual knowledge while they play. Players experience immediate

feedback on the result of their decisions and how they impact the goals of the exercise. This learning by

doing in a risk-free environment results in improved knowledge retention and increases the desire to

learn even more.

A well-designed business simulation strives to provide authentic concepts and activities, clear feedback,

and challenging goals as well as a method for assessment of performance in a graphic-based, active

technology-based environment. This experience feels like play, while providing students a rich learning

experience.

Digital natives, otherwise known as the Net Generation, have grown up with games. This fact continues

to challenge educators at all levels to incorporate new strategies into the learning experience. Digital

natives typically see work as play and play as work, while also viewing technology as a natural part of

life, and favoring graphics and animation over text – a combination that results in the ideal consumer of

instructional simulations.

Thoughtfully crafted learning objectives serve as the starting point for the design approach of the

simulation and provide the scaffolding for the game, facilitating important learning as each player

changes roles during the game while working through the key activities.

Digital simulations also provide an opportunity for virtual performance assessment. Collection of game-

based performance is integrated within the platform. The online collection of learner performance data,

conducted in the background, has the added benefits of reducing both instructor workloads as well as

“test anxiety” for the student.

Practice Operations 1.0 is a simulation game designed to present players with a series of production-

based scenarios, based upon specific set of learning objectives, allowing the player to practice mastery

over the knowledge, skills and abilities necessary to function as an Operations Manager. The game

provides an interactive, animated view of the elements of operations: production processes, supply

chain management, forecasting and contracts and human resources and capacity planning in a five-

module format. Practice Operations Management is designed with emphasis on the following key

points:


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• Diverse products and markets require students to emphasize different values within the

operations process (value, cost, flexibility), and that requires them to use decision-making skills

while adapting to dynamic elements within inventory management, capacity, production,

sourcing, etc. Therefore, in the simulation, players are challenged to create different product

designs to meet market conditions.

• The focus of the game is on product-based scenarios, which allows for the incorporation of

production process design, capacity, supply chain, Just-In-Time inventory control, labor

management, order fulfillment, customer satisfaction, and quality control.

• The game supports leader-board score competition among students within the individual

focused scenarios.

Targets and Goals

Industry Connection: Knowledge, Skills and Abilities

The role of the Operations Manager is complex, multifunctional, and requires a wide range of both

global and disciplinary-based skills, including the ability to coordinate, plan and direct activities and

human resources to create products and meet departmental goals. The U.S. Bureau of Labor Statistics

publishes the Occupational Outlook Handbook, which provides detailed descriptions of occupational

groups and job categories. A companion resource, O-NET Online, provides information-rich reports for

these same occupational groups, including current data from the national and state level on wages and

employment, educational level, and detailed position descriptions.

O-NET Online summarizes the responsibilities of the Operations Manager as:

“Plan, direct, or coordinate the operations of public or private sector organizations. Duties and

responsibilities include formulating policies, managing daily operations, and planning the use

of materials and human resources, but are too diverse and general in nature to be classified in

any one functional area of management or administration, such as personnel, purchasing, or

administrative services. “

A sample of the tasks required of the Operations Manager include:

1. Oversee activities directly related to making products or providing services.

2. Direct and coordinate activities of businesses or departments concerned with the production,

pricing, sales, or distribution of products.

3. Review financial statements, sales and activity reports, and other performance data to measure

productivity and goal achievement and to determine areas needing cost reduction and program

improvement.

4. Manage staff, preparing work schedules and assigning specific duties.

5. Direct and coordinate the organization's financial and budget activities to fund operations,

maximize investments, and increase efficiency.

6. Establish and implement departmental policies, goals, objectives, and procedures, conferring

with board members, organization officials, and staff members as necessary.


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7. Determine staffing requirements, and interview, hire and train new employees, or oversee

those personnel processes.

8. Determine goods and services to be sold, and set prices and credit terms, based on forecasts of

customer demand.

9. Locate, select, and procure merchandise for resale, representing management in purchase

negotiations.

10. Determine goods and services to be sold, and set prices and credit terms, based on

forecasts of customer demand.

11. Develop or implement product-marketing strategies, including advertising campaigns or

sales promotions.

12. Direct non-merchandising departments of businesses, such as advertising or purchasing.

13. Manage the movement of goods into and out of production facilities.

14. Recommend locations for new facilities or oversee the remodeling or renovating of

current facilities.

Knowledge, Skills, and Abilities

In order to perform these tasks, O-NET has determined the key knowledge, skills, and abilities (KSAs) for the job classification of General and Operations Managers.

O-NET Online Knowledge, Skills, and Abilities for General & Operations Managers

KNOWLEDGE

Administration & Management

Knowledge of business and management principles involved in strategic planning, resource allocation, human resources modeling, leadership technique, production methods, and coordination of people and resources.

Personnel & Human Resources

Knowledge of principles and procedures for personnel recruitment, selection, training, compensation and benefits, labor relations and negotiation, and personnel information systems.

Customer & Personal Service

Knowledge of principles and processes for providing customer and personal services. This includes customer needs assessment, meeting quality standards for services, and evaluation of customer satisfaction.

Economics & Accounting

Knowledge of economic and accounting principles and practices, the financial markets, banking and the analysis and reporting of financial data.

Mathematics Knowledge of arithmetic, algebra, geometry, calculus, statistics, and their applications.


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SKILLS

Active Listening Giving full attention to what other people are saying, taking time to understand the points being made, asking questions as appropriate, and not interrupting at inappropriate times.

Reading Comprehension

Understanding written sentences and paragraphs in work related documents.

Speaking Talking to others to convey information effectively.

Critical Thinking Using logic and reasoning to identify the strengths and weaknesses of alternative solutions, conclusions or approaches to problems.

Monitoring Monitoring/Assessing performance of you, other individuals, or organizations to make improvements or take corrective action.

ABILITIES

Oral Comprehension The ability to listen to and understand information and ideas presented through spoken words and sentences.

Oral Expression The ability to communicate information and ideas in speaking so others will understand.

Problem Sensitivity The ability to tell when something is wrong or is likely to go wrong. It does not involve solving the problem, only recognizing there is a problem.

Written Comprehension

The ability to read and understand information and ideas presented in writing.

Written Expression The ability to communicate information and ideas in writing so others will understand.

Player Actions and KSAs

The following table provides a full list of actions that players have access to while playing the game.

These actions and processes correlate directly to the necessary Knowledge, Skills, and Abilities required

for success in the role of Operations Manager. This list should not be considered all-inclusive, but

representative of both global and disciplinary-based skills.

Player Action Details Knowledge, Skill, Abilities

BIDDING AND FORECASTING

Review financial data Contract Payments, Materials Costs, Operating Costs, Expansion Costs, Returns Costs, Labor Costs, Shipping Costs

K – Economics & Accounting S – Critical Thinking A – Problem Sensitivity

Analyze operations reports

Completed Orders, Production Time, Inventory Turn, Production Station Efficiency, Production Quality, Ongoing Expansion, Ongoing Upgrades, Client Satisfaction

K – Administration & Management K – Mathematics S – Critical Thinking A - Written Comprehension

Research market forecasts Current Trends, Upcoming Trends S - Reading Comprehension

Examine current work requests Specifications, Due Dates, Pricing K – Administration & Management K - Customer Service A – Written Comprehension


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Bid on work requests Available Capacity, Capabilities, Material

Supplies

K – Economics & Accounting K – Administration & Management S – Reading Comprehension S – Critical Thinking

Examine competitors Orders Completed, Customer Satisfaction, Previous Actions

K – Customer and Personal Service S – Critical Thinking

SUPPLIERS

Research suppliers

Material Availability, Price, Quality, Reliability, Delivery Time, Delivery Schedules, Sustainability, Discounts, Cost of Ownership

K – Economics & Accounting

K - Mathematics S - Reading Comprehension

Set up supply contracts Material K – Administration & Management S – Critical Thinking

Manage existing supply contracts Extend, Cancel, Renegotiate S – Active Listening A – Oral Comprehension A – Oral Expression

Decide degree of integration with suppliers

Minimum Orders, IT Integration, Exclusive Contracts.

K – Administration & Management S – Monitoring/Assessing A – Problem Sensitivity

PRODUCTION PLANNING

Manage production facilities Build, Expand, Sell K – Administration & Management K – Economics & Accounting

Research production stations

Purchase Cost, Operating Cost, Production Speed, Setup Time, Configuration Time, Labor Requirements, Capability, Upgradability, Production Quality, Defect Rate, Sustainability

K – Economics & Accounting K – Personnel & Human Resources S – Critical Thinking S – Monitoring/Assessing A – Written Comprehension

Manage production stations Buy, Upgrade, Sell, Staff K – Administration & Management K – Economics & Accounting K – Personnel & Human Resources

Manage inventories Build, Expand, Sell K – Economics & Accounting S – Critical Thinking

PRODUCTION PROCESSES

Examine contracts Product, Quantity, Delivery Date A – Written Comprehension

Examine inventories Materials, Intermediate Goods, Finished Products, Financial Impact

K - Mathematics

S – Monitoring/Assessing A – Written Comprehension

Select products to produce NA K – Administration & Management K – Economics & Accounting

Allocate inventories Dedicate space from total inventory to specific intermediate or finished products

S – Critical Thinking S – Monitoring/Assessing

Set production processes NA K – Administration & Management

Configure production stations Operating Speed K – Administration & Management K - Mathematics

CUSTOMER MANAGEMENT

Examine contracts Product, Quantity, Delivery Date A – Written Comprehension

Modify contracts Renegotiate, Cancel A – Oral Expression A – Written Expression


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Manage clients Offer discounts and delivery dates K – Customer & Personal Service S - Speaking

Examine customer performance Returns, Late Orders, Cancelled Contracts, Sustainability

S – Critical Thinking S – Monitoring/Assessing

LABOR MANAGEMENT

Hire workers for different tasks Skill level, Cost, Abilities K – Personnel & Human Resources

Compete for Shared labor pool Like contracts, labor pool is shared among other companies, Other companies can hire your workers away

K – Personnel & Human Resources S – Active Listening A - Oral Expression

Train Workers to make them More Effective

Trade money and temporary loss of productivity, in exchange for increased skill level.

K – Personnel & Human Resources K – Administration & Management S – Active Listening A - Oral Expression

Practice Operations and Real World Applications

The Operations Management Process

In Practice Operations, players take the role of an owner of a small manufacturing company, producing a

variety of products for different clients. In this game, players compete to win contracts to produce

products, while tuning their businesses through the principles of operations management. These

principles include choosing suppliers based on raw material quality, price, availability, delivery time, and

reliability; managing production processes to increase/decrease production capacity, increase

production throughput and efficiency, increase new potential products, reduce inventory overhead, and

manage product quality and price; managing and optimizing labor force; forecasting to stay abreast of

developing trends in new work requests; and client management to keep current and potential clients

happy.

The Production Process

The game features a production process system, where players set up production processes for the

various products they are attempting to produce. Each product requires a set of materials and a series

of production tasks to complete. These production tasks are fulfilled by production stations within the

player’s production facility.

Each turn, players must manage a process for each product by assigning inventory space and production

stations from their production facilities. These processes may be independent, or they may intersect if

the player decides to split time for certain stations among multiple products. By varying the

configuration of their production processes, players will be able to vary production speed, operating

costs, equipment reliability, labor requirements, efficiency of material usage, and amount of

intermediate goods produced.


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Competitive Bidding

The game features a bidding system, allowing potential clients to offer work orders for a player to bid

on. These requests will vary in terms of desired product, price, delivery time, and lot size. Players will

be able to bid on these work requests by submitting quotes for price, delivery time, and quantity. At the

end of a turn, the game will determine the winning bids, and award players contracts accordingly.

The bidding system allows different operations management strategies to succeed in the same

marketplace. It also allows different scenarios to be easily crafted by changing the parameters of the

work requests, and forecasting to play a valuable role in the simulation (by predicting future types of

work requests).

Labor Management

The game will also have a labor component, as players will need to hire and manage laborers as well

production capital. Players will need to manage their resources in order to staff positions in the various

sectors of their business, and take into account the cost and efficient use of labor, and how it

contributes to the company’s overall strategy.

Service-Oriented Elements

This simulation is focused on a product-fulfillment / “job shop” style operations company. While not a

primary focus of the game, the service component will surface chiefly in the form of introducing

customer-relationship issues as part of dealing with Clients.

Client Management

Players in the apparel company will be judged on the metrics of finances and client satisfaction. Clients

ultimately determine a player’s success by providing players money and high customer satisfaction

ratings for completed contracts. Thus, it is important that players remember to also cater to their

clients when managing supply chains and production processes.

Critical Thinking Questions

When players end the turn, in the module/ scenario mode, or the full-game mode, or both, a critical

thinking, open ended question may appear.

For example, a player might end the turn and see a question like:

In your assessment, what types of products is your company most suited to produce?

What is your company’s biggest vulnerability ?

What are the advantages and disadvantages of an exclusive contract?


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Student responses are captured and reported to the instructor through the website. These questions

are reviewed more closely in the following section.

Teaching Tips

Best Practices and Practice Operations

A number of best practices for the successful implementation of serious games into the learning

environment have been evolved through the use of play. A sampling of these best practices includes:

Connection making

Connection making is essential to new learning. It is through deepened connection making that

students begin to think critically about the content they are exploring. Practice Operations allows

students to make connections while exploring key industry concepts.

Active engagement

Teaching that emphasizes active engagement helps students process and retain information.

Strategies that facilitate these types of best practices include real-world applications, interaction,

self-paced assessment, self-questioning, deeper thinking, connection making and problem solving.

Practice Operations provides an opportunity to exercise each of these critical learning activities.

Community building

Fostering community is another important key for both engagement and retention. Students, who

feel that the classroom provides a supportive and interactive culture, tend to exemplify greater

levels of student success. Practice Operations can be used in a lecture or lab environment that

facilitates discussion and collaborative thinking. Practice Operations can also be used as a

spring-board for online discussion questions or in-class group work.

Inspiring student success

What students do in college is perhaps more important than what they learn. Student success is

dependent upon engagement and the types of best practices that are listed above. Serious games,

like Practice Operations, have been shown to deepen engagement, retention and overall student

learning.

Additional Benefits to Instruction

In order to maximize student learning through the use of simulations such as Practice Operations it is

important for the instructor to consider providing a careful balance of both instruction and play. This

balance fosters an educational experience that is both fun and pedagogically effective. In general, a few

of the advantages of using simulations or internet-based games include:

• Flexibility of time – available to play any time

• Flexibility of location – play anywhere


25

• Control of learning pace by both the instructor and the student

Experiential learning, as opposed to cognitive learning, allows the learner to align abstract concepts into

the context of the instructional material. Serious games challenge the player to call upon their own

knowledge base as well as absorb new information to play the game. Applicability to the learner’s reality

is established immediately through the following game-play avenues:

Recall of existing knowledge

• Recall of prior knowledge

• Discovery of new information

• Establishment of immediate relevance – a key to effective adult learning

• Connection of new information to the student’s current world

A debriefing session after game play is beneficial for learners to realize how their experience directly

applies to the material they are learning in class. Simulations are beneficial for practicing work-related

skills; however, it is important for students to acquire subject-related knowledge as wellapplied during a

game.

In addition, games and simulations need to be sufficiently challenging to engage students, and the level

of challenge should be flexible, changing as students become more proficient. While many simulations

incorporate features to guide and support students, instructors should monitor students’ use of these

materials to make sure understanding the structure and rules of the game do not take priority over

learning. Instructors may find that some students might:

• Require guidance to narrow down potential choices or draw player’s attention to specific

key features

• Need to be guided by a mentor that provides relevant instructional advice (a key

component of Practice Operations)

• Have the desire to be challenged with progressively more complex and difficulty and/or

gradually take on more challenge

Furthermore, it is important to provide an opportunity for all learners to reflect on and discuss what is

happening within the game in order to internalize learning.

Best Practice Tip

Instructors may want to consider having a replay option for their students. This option would allow students who did not successfully complete a module or students who completed the module but were highly engaged, the ability to play again. In order to do this, instructors will simply create an additional assignment.


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Connecting Game Play with Learning Objectives & Critical Thinking Questions

Module 1: The Production Process

In this module, the player will learn to manage the basic production process. This product flow is clearly shown in the Production Floor panel (below), as well as the progression of products through the various machines. The managers in the game will help guide players through the process.

In Practice Operations, the production floor uses a work-center (or job shop) layout, where machines are grouped by type, with products traveling from one machine to the next as they are completed. Products start in Cutting and then move through Sewing, Press Transfer (for some products), and finally arrive at Packaging. Additional work centers will be added in later modules, and each station can be upgraded for a one-time cost to increase the speed and maximum amount that can be processed.


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Make-to-Order Processes

By following the screen prompts, a production order that precisely matches the customer order is started on the production floor. This 1:1 relationship between customer orders and production orders is a key characteristic of a make-to-order process.

For example, review the open contract from Stallion Apparel (below), highlighting the importance of individual orders in a make-to-order system. In particular, the key elements are the client, item ordered, order quantity, unit price, and due date.

Once production is underway, view the details by looking at the Current Production Runs panel. The side arrows let players quickly cycle through all products currently in production. The icons under Production Tasks show which machines are required for the specific product. View the material required per unit and see how much of that material is in stock. Players can view the current status, the amount being produced, the order priority, and finally the quantity of finished product in stock.


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Operations Management: Priority and Utilization

A key decision for the player is the sequencing of jobs. By varying the priority of jobs, the quantity of each item produced during a given period can be varied widely. In this example, the priority of three jobs (shirts, shorts, and pants) is varied to show how this can impact total output. Prioritization of jobs is established in the Production Area.

Click the Manager’s Desk, then select each order from the Production Schedule.

Shirts are set for first priority, but what if there is a conflict with production of another order? To keep track of the state of multiple orders, go to the View Production Plan panel.

The Production Plan panel shows which machines are in use and how much of their total capacity is being utilized. There is nothing worse than being on track to complete orders for the customer on

NOTE:

The priority of production can also be changed with the mouse by grabbing a product in “Current Production Runs” and dragging it to a new slot.


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time only to have several products all arrive at the packaging station at the same time! Prioritizing to get the most from your production is critical to success.

Can you get your average utilization to 100 percent?

Probably not, but the higher that score, the more efficient you are managing your operations. See the equation below:

𝑈𝑡𝑖𝑙𝑖𝑧𝑎𝑡𝑖𝑜𝑛 = 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 𝑢𝑠𝑒𝑑

𝐵𝑒𝑠𝑡 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑙𝑒𝑣𝑒𝑙=

1280

2400= 53.3%

This priority order has increased the average utilization by 10%!


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Follow the Tutorial for Module 1

It’s important to follow the in-game tutorial for this module to be sure the player is introduced to all the key elements. They will be needed to begin playing Module 2. If players are unsure of any part of the module, they should replay it, and/or review the Student Manual. Once the player feels comfortable with the concepts introduced in Module 1, they should try playing through it several times to beat their own high score!

Module 1 Learning Objectives 1. Understand what a manufacturing process is and how it is organized.

2. Understand the importance of process thinking in operations management.

3. Apply the conversion process of operations management in a simple manufacturing scenario.

4. Illustrate an example of a process-dominant layout, and examine the advantages and

disadvantages of such a layout.

5. Understand concepts of setup time, utilization time, production scheduling, and bottlenecks, in

a simple manufacturing process.

6. Discuss the role and practice of an operations manager in a simple manufacturing scenario.

Module 1 Critical Thinking Questions

Existing question Multiple-choice version

* correct answers are bolded Explanation of answer

Learning Objective(s)

When scheduling production of products, what are the key factors to consider?


a) Quality

b) Timeliness

c) Quantity

d) Capacity

e) Reputation

f) Competition

While a company’s reputation is certainly important, the reputation is affected by the quality of orders and timeliness in which orders are fulfilled. In order to accomplish these, an operations manager must be aware of the quantity ordered versus the available capacity in addition to the quality of raw materials and finished items. What the competition does is of secondary importance if operations are running properly.

1, 2, 6

What are the three ways that machine time can be spent in Practice Operations?

What are ways that machine time can be spent in Practice Operations?

a) Idle

b) Setup

c) Production

d) Failed

e) In repair

f) In maintenance

In Practice Operations, machines are either in setup/production or are idle. In real life, machines may also malfuntion or need repair.

1, 5


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Practice Operations uses a batch processing system. What are the key characteristics of a batch process?

What are key characteristics of batch processing systems?

a) Discrete product lots are produced.

b) Many different products can be produced.

c) Production can be matched to demand more easily.

d) You can increase utilization using batch processing.

In batch processes, products are produced in lots of a specific size rather than have protracted periods of only one product type. This allows a variety of products to be produced, matching production more closely to demand. Typically, setup cost must be weighed against the ability to match demand almost exactly (as is the case in JIT operations). The workstation utilization currently processing a batch remains unchanged, while downstream workstations may experience forced idle time waiting for a new batch.

1, 5

Why is it important to understand the amount of setup time required for each order?


a) Setup time reduces machine production availability.

b) Frequent setups can significantly impact a factory’s productivity and responsiveness.

c) Short setup times have insignificant impacts on productivity.

d) Long setup times will lead to long processing times.

e) Long setup times will lead to short processing times.

Machines are not available to add value to a product during set up time. If frequent product changeovers occur on machines, this can significantly impact the factory’s capacity and productivity. If labor is required for setups, frequent and/or long setups can result in increased labor cost as well. Setup and processing times are not necessarily related.

5, 6

Which workstation has the lowest processing time per unit? Which has the highest? How does this limit the total production of the system?

From an operations perspective, is the highest- or lowest-processing time station more important? Why?

a) The lowest, because it can get through its queue the fastest.

b) Both are equally important.

c) The highest, because it can slow down the entire factory.

If not enough capacity is provided at the slowest workstation in the system, it can act as a “bottleneck,” slowing down the entire factory to operate at its rate. The lowest-processing time station may become “starved” of work as a result.

1, 5, 6

What is a “bottleneck” station?

a) The slowest workstation in the system.

b) The fastest workstation in the system.


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Why is it necessary to prioritize orders in a production system?


a) To avoid machine idle time.

b) To ensure product is delivered on time.

c) To give priority to more profitable jobs.

d) To make sure jobs are processed in a First-In-First-Out order.

Prioritization is a reflection of order importance, as determined by due date, profitability, material availability, or other factors. Without prioritization, the differences among orders would not be readily visible, potentially leading to processing in the wrong sequence, resulting in unnecessary idle time and/or delayed order fulfillment.

5, 6

What is a desirable level of utilization for equipment in a factory? Why is utilization that is too low (or too high) an indication of potential trouble?

What is a desirable level of utilization for equipment in a factory?

a) 20-25%

b) 50-60%

c) 80-85%

d) 90-95%

e) 100%

A good rule of thumb for manufacturing systems is a utilization of 80-85%. When utilization is too low, the firm has too much invested in equipment and is not producing as much return on the money invested in equipment as possible. When utilization is too high, the ability to quickly move products through the system may be jeopardized, particularly if new business is being added to the system.

5, 6

Why is utilization that is too low (or too high) an indication of potential trouble?

a) If utilization is too low, resources are not being utilized properly, wasting the invested capital and reducing the ROI.

b) If utilization is too low, products cannot move quickly through the system.

c) If utilization is too high, resources are put under strain and may fail more frequently.

d) If utilization is too high, the ability to react to changes or unforeseen events is reduced, which can lead to high levels of congestion and wait time in the system.

In a batch process, why is it necessary for an entire order to complete processing at one workstation before moving to the next? How does this cause utilization of equipment to be reduced?

In a batch process, why is it necessary for an entire order to complete processing at one workstation before moving to the next?

a) Parts may go missing.

b) Only one setup time is incurred per batch per station.

c) Parts may be misprocessed.

d) The workstation may go idle.

e) The utilization is minimized.

Batch processes are managed by keeping orders together. Violating this principle can cause confusion in the system (lost parts, misprocessing of parts, etc.) and can cause excessive setups (keeping batches together minimizes setups to just one per batch at each machine). Waiting for an entire batch to be processed at an earlier workstation can cause downstream workstations to sit idle. Setup time is generally not considered as part of utilization.

1, 2, 5, 6


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How can batch processing cause utilization of equipment to be reduced?

a) Because setup time is only performed once, utilization is reduced.

b) Downstream stations may sit idle while waiting for an entire batch to complete upstream.

c) Because there is only one batch instead of many individual items.

What are some key decision that an operations manager must make?

What are some key decision that an operations manager must make?

a) Order prioritization

b) Equipment purchases

c) Equipment upgrades

d) Equipment disposal

e) Hiring personnel

f) Product marketing

g) Social media

h) Securing contracts

An operations manager is in charge of all aspects of business operations. This does not typically directly involve HR, marketing, or contract negotiation.

6

If order prioritization is changed after production has already started, what negative ramifications may be observed?


a) Additional setups

b) Scrapped parts

c) General confusion on production floor

d) Delays in delivering product

e) Faster product turn-around

Additional setups may be incurred as work is stopped and then restarted. Confusion on the production floor as machines must be re-tasked. Promised delivery dates may be changed as production is delayed.

5, 6

In what cases would it be a good idea to change the prioritization of orders?


a) Addition of a higher-priority order.

b) Change in due date of existing orders.

c) Unavailable raw materials.

d) Some orders take longer than others to complete.

e) Workstation utilization will be reduced.

Order prioritization might be changed to reflect the addition of a new order with higher priority or in response to changes in existing orders (such as moving a due date earlier or later, or delays in raw materials shipments). The amount of time an order takes should factor into the original scheduling, not cause a change in prioritization later on. If the total amount of work does not change, the overall utilization of a workstation will also not change.

5, 6


34




Why would it be advantageous to reduce setup times in a manufacturing system?

Why would it be advantageous to reduce setup times in a manufacturing system?

a) Leave more time for production.

b) Allow smaller batch sizes, increasing downstream utilization.

c) Short setup times will lead to short processing times.

d) Short setup times will lead to long processing times.

Reduced setup times would leave more time for production (if the number of setups remains the same) or would allow a factory to produce smaller batches, which increases the utilization of downstream equipment, while not sacrificing production capacity. Setup and production times are not necessarily related.

5

What are some reasons that shortening the delivery time for a shipment (known as expedited shipping) would cost more than using a slower shipping method?

What are some reasons that shortening the delivery time for a shipment (known as expedited shipping) would cost more than using a slower shipping method?

a) Faster (more expensive) shipping methods such as air rather than ground.

b) More direct routing increases costs over serving multiple customers in one shipment.

c) It is a premium service customers may be willing to pay for.

d) Perishable products must be shipped more quickly.

e) If a delivery date is close, expedited shipping must be used.

Expedited shipping may require a more direct path (forgoing the possibility of servicing multiple customers on a delivery run) or may require the use of faster shipping methods (replacing a truck shipment with air freight, for example). Expedited shipping is also a premium service, so customers who need it are more willing to pay, leading to higher costs.

6

Module 2: Managing Suppliers

Time to get busy with supply chain management! This module introduces the receiving department, and shows how to efficiently order the materials needed for the student to produce their products. As players learned in Module 1, proper scheduling is critical to keeping production running smoothly. The same is true with managing the supply chain. The player must make sure they receive the proper amount and quality of materials in a time frame that allows students to sort them, send them to production to create completed products, and ship them in enough time to arrive at their destination within the specified number of weeks. This will make the clients happy and increase the company’s reputation.

Of course, it is also important to manage the costs associated with suppliers. In Practice Operations, there are two main costs associated with raw materials – purchasing costs and holding costs. Purchasing costs can be managed by selecting a vendor with the right quality (to avoid overpaying for excessive quality), by taking advantage of lead-time and quantity discounts, and by comparing prices among vendors. Holding costs are charged for materials held in stock (about 10% per turn for raw


35

materials, 5% per turn for finished products) and can be minimized through careful scheduling of purchases and production.

Excess materials can be sold, but the cash received for inventory (either raw materials or finished products) that are disposed of in this manner is a small portion of the original cost.

In the receiving department, the player clicks on the manager’s desk to order new materials, and see trucks back up to the loading docks when materials arrive. Materials first go to the double pallet at the bottom of the screen until they can be sorted. Then each pallet displays specific raw materials that are letter coded.

The “Lean or “Just-In-Time” Strategy

One gameplay option in Module 2 allows the instructor to reinforce lecture material on Lean/Just-In-Time approach to supply chain management. Players can experiment with this approach by ordering raw materials to arrive just as they are needed. For example, in turn 3 (January, week 3) orders arrive for slacks (250 units) and shorts (400 units). Both of these products are due to arrive at the customer in 6 weeks (March, week 1). Less than one week is required for production of these items (the limiting factor is packaging capacity, but even this step can be completed in less than a week for both products). Therefore, with 2 weeks to ship and 1 week to produce, these two production orders can be started as late as February, week 2. As a result, when ordering the raw materials, ordering with a lead time of 3 weeks will minimize inventory holding and allow for just-in-time delivery of raw materials.


36

Proposed Timeline

JIT/Lean requires highly reliable suppliers: for khaki either United Fabrics or Preston Premium would be preferred suppliers because they have shown themselves to be dependable. Both offer the required level of quality and both can meet the required quantity. Since the price is the same for both, place an order for 500 units of khaki with Preston Premium.

Jan., W

eek 3

Jan., W

eek 4

Feb

., Week

1

Feb

., Week

2

Feb

., Week

3

Feb

., Week

4

Mar., W

eek 1

Cu

stom

er

ord

ers

arri

ve

Sta

rt p

rod

uct

ion

ord

ers

Raw materials

ordered to arrive

Feb., week 2.

Pro

du

ctio

n

ord

ers

com

ple

te

Product in

transit to

customer

Pro

du

ct

del

iver

ed t

o

cust

om

er


37

For silk, Preston Premium, Reliable Clothing, and United Fabrics are highly reliable suppliers. Once again, all meet the necessary quality level. Reliable Clothing offers a significantly better price, even though an order of 400 units of silk will not qualify for a quantity discount. Preston Premium is more expensive than Reliable Clothing and United Fabrics has a minimum order quantity of 500 units. Therefore, we place an order for 400 units of silk with Reliable Clothing.

Thanks to our reliable suppliers, the requested quantities of silk and khaki arrive exactly as promised in February, week 2 and can be used in production the following week.

However, we have encountered a snag! The sorting capacity in the warehouse is insufficient to process the shipments. 98 units of khaki and

2 units of silk are left unsorted. This is going to delay production.

This element of operations is dealt with in Module 4, where players will get the opportunity to expand their staff for different departments. In the meantime, it’s vital to run the numbers ahead of time to avoid these situations, especially since hiring more staff may not be a viable option.


38

Due to the delay in getting materials sorted, the slacks and shorts are not completed and in finished goods inventory until February, week 4. As a result, in this situation players would be forced to use expedited shipping to get the products to the customers on time at an additional cost of $404! That small holdup has had a major effect on the bottom line.

Quality Inspection

Stock inspections can increase the quality of raw materials. This identifies and removes sub-standard items, decreasing the available quantity but increasing the overall quality of the remaining stock. Inspection is generally an expensive option since the player is, in effect, throwing away raw materials that have already paid for.

In Module 2 gameplay, players are prompted to inspect a shipment of Denim. Quality inspection is initiated from the Material Stock window.

Students are asked to confirm the inspection…

…and are shown the results of the inspection. Here, 19 “defective” units were removed, raising the quality level of the 81 remaining units to 59.0.

However, inspection is rarely an efficient strategy for improving quality. In fact, if a higher quality material had been purchased in the first place, the total cost of the materials would be significantly lower.

United Fabrics offers higher-quality denim for $1.80 per unit.


39

A comparison of final cost per unit shows that purchasing from United Fabrics would result in a lower cost of ownership.

Red Maple Fabrics United Fabrics

Purchase Price per Unit $1.50 $1.80

Inspection Cost 19 x $1.50 = $28.50 $0.00

Final Quantity 81 100

Final Cost per Unit $178.50/81 = $2.20 $1.80

So how can inspections help the player? sorting materials can allow players to make use of extra materials. Perhaps they ordered cotton at a quality of 40 and now have several hundred left over. If a small order comes in with a quick turnaround at quality 50, they may be able to produce it right away by inspecting the lower quality material and finding enough quality 50 material to get the job done.

Quantity Flexibility and Supplier Capacity

Although price is an important consideration in vendor selection, ability to meet surges in demand is also an important attribute. Vendors with low levels of available capacity may be unable to meet demand.

For example, Alpine and Tigerlily Textiles are very similar suppliers of wool. Both have the same price, reliability, and quality levels. However, their available capacity is not comparable.


40

Vendor Selection must include more aspects than quoted price. Quantity discounts, lead times, and other factors can make a significant difference between vendors.

Creating a Vendor Scorecard

By now it is clear that there are several different dimensions used to evaluate the suppliers. These include price, quality, and reliability. This data can be used to prepare a vendor scorecard. For example, an evaluation of cotton suppliers can be prepared by gathering data from the Receiving screen.


41

After gathering this data for all cotton suppliers, the following table can be assembled.

Supplier Price Quality Reliability

Owens Textiles $0.08 50 Low

Freeway Fabrics $0.08 25 Medium

Preston Premium $0.12 80 High

Reliable Clothing $0.10 35 High

Tigerlily Textiles $0.10 60 Medium

United Fabrics $0.12 70 High

The vendor scorecard can be prepared in many ways. One possibility is to rank the vendors in each category, and to assign equal weighting to each category. The vendor with the lowest weighted rating is most attractive.

Rank

Supplier Price Quality Reliability Score

Owens Textiles 1 4 3 2.67

Freeway Fabrics 1 6 2 3.00

Preston Premium 3 1 1 1.67

Reliable Clothing 2 5 1 2.67

Tigerlily Textiles 2 3 2 2.33

United Fabrics 3 2 1 2.00

In this example, Preston Premium would be considered the “best” vendor.

3 + 1 + 1

3= 1.67


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Use of different weights for the three categories can lead to a different result. Consider the results if price is considered most important (assigned a weight of 0.6), while quality and reliability are assigned a weight of 0.2.

Rank

Supplier Price Quality Reliability Score

Owens Textiles 1 4 3 2.00

Freeway Fabrics 1 6 2 2.20

Preston Premium 3 1 1 2.20

Reliable Clothing 2 5 1 2.40

Tigerlily Textiles 2 3 2 2.20

United Fabrics 3 2 1 2.40

Now Owens Textiles is the preferred vendor.


As with Module 1, it is important to follow the in-game tutorial for this module to be sure the students are introduced to all the key elements. A clear understanding of all the points from the two modules they have played through will be needed when they start playing Module 3. If students are unsure of any part of the module, allow them to replay it, as well as reviewing this section of the Student Manual again. Once they feel comfortable with the concepts introduced in Module 2, remind players to make use of their Vendor Scorecards and try playing through it several times to beat their own high score!

Module 2 Learning Objectives

1. Understand “make to order” processes in a simple, manufacturing scenario.

2. Analyze and evaluate quality considerations in the production process.

3. Evaluate suppliers and supplier deals, considering supplier quality, reliability, cost, and lead

times.

4. Practice raw material purchasing strategies.

5. Identify and analyze issues in managing supplier/buyer relations.

6. Understand the roles and uses of inventory.

0.6(1) + 0.2(4)+ 0.2(3) = 2.00


43

7. Apply techniques for effective inventory management.

8. Practice elements of lean and “just-in-time” approaches to supply chain management.

9. Evaluate the benefits and risks of adopting lean systems.


Existing question

Multiple-choice version * correct answers are bolded

Explanation of answer Learning Objective(s)

What is the main difference between “make-to-order” and “make-to-stock” systems?


a) Production is started when the order is received in “make-to-order” systems, rather than before in “make-to-stock” systems.

b) Production is started when the order is received in “make-to-stock” systems, rather than before in “make-to-order” systems.

c) There is no difference. d) Make-to-stock systems are better

because it is safer to have inventory on hand.

In a make-to-order system production is not started until the customer order is received. In a make-to-stock system, products are produced prior to receipt of customer orders.

1, 6, 8, 9

Why would the quality of incoming raw materials be as important as the cost of those materials?

Is the quality of incoming raw materials as important as the cost of those materials? If so, why? If not, why not?

a) Yes, poor quality materials can increase costs by causing failures.

b) No, the cost of materials is more important; if materials are less expensive, the company can purchase more material to make up for possible quality deficiencies.

Poor quality materials can cause a number of costs for the firm. These include inspection, failure, and rework. In the end, low quality materials can have a higher total cost of ownership (purchase price plus quality costs) than purchasing higher quality materials in the first place.

2, 3

What are possible reasons that a firm may choose to carry raw materials in inventory before they are actually required for production?

What are possible reasons that a firm may choose to carry raw materials in inventory before they are actually required for production?

a) Avoid price increases b) Guarantee availability of

materials c) Take advantage of quantity

discounts d) Increase customer

responsiveness e) Avoid wasted warehouse space f) Make the vendor happy

The firm may purchase in advance to avoid future price increases, to guarantee a supply of materials that may be in short supply, to take advantage of quantity discounts, or to allow faster reaction to customer requests (by eliminating the need to wait for delivery of raw materials).

4, 6


44

Existing question



Why is inventory seen as a form of “waste” in lean systems?


a) It incurs “unnecessary” costs such as storage or opportunity costs.

b) It may lead to production for the sake of using inventory.

c) It can mask underlying problems in the facility.

Inventory causes the firm to incur costs (storage, handling, degradation, and opportunity costs) and can lead to poor decision-making (building products not because they are needed, but because the raw materials are already owned).

6, 8

In a “just-in-time” system, why is it important to have reliable suppliers?

In a “just-in-time” system, why is it important to have reliable suppliers?

a) Suppliers must be able to supply the right amount of the right quality product at the right time so customer orders can be fulfilled quickly.

b) There is no inventory so the company must rely on the suppliers to be able to react quickly and correctly.

c) It is always important to have reliable suppliers.

d) As long as you have enough inventories on hand, it is not so important to have reliable suppliers.

Reliable suppliers allow the firm to order materials to arrive when they are needed (just-in-time) with confidence that the materials will actually arrive in the right quantities and with the right level of quality, when they are needed. Uncertainty in any of these three dimensions leads to the need to carry inventory.

3, 5, 9

Why do suppliers offer quantity discounts?

Why do suppliers offer quantity discounts?

a) Take advantages of economies of scale in production/shipping

b) Ensure customer needs are met, which can lead to higher sales for entire supply chain

c) Lock customers in d) Clear out supplier warehouses

Incentivizing customers to order in larger quantities allows suppliers to take advantage of economies of scale in production and shipping. Larger order quantities can also ensure that the customer has enough materials to meet their needs, leading to higher sales for the entire supply chain.

3, 5

Why is inspection of raw materials often an inefficient means of improving the quality of the stock?

What method is best for improving the quality of stock?

a) Manual inspection b) Using reliable suppliers c) Proper storage conditions

Inspection is often time-consuming and when sub-standard materials are identified they are often discarded, resulting in a loss of value. Prevention of quality issues is generally less expensive than inspection.

2, 7

What are the potential costs of carrying inventory?

What are potential costs of carrying inventory?

a) Storage b) Obsolescence c) Loss/damage/theft (shrinkage) d) Material handling e) Opportunity cost f) Reputation g) Lost sales

Obsolescence, loss/damage/theft, storage costs, material handling costs, opportunity costs.

5


45

Existing question



Why do suppliers offer discounts for orders with longer lead times?

Why do suppliers offer discounts for orders with longer lead times?

a) Longer lead times afford greater production stability and predictability.

b) Longer lead times allow the use of more efficient shipping methods.

c) Longer lead times allow for more use of overtime to fill the entire lead time.

d) Longer lead times allow suppliers to shop around more for better deals.

Longer lead times allow the supplier to take advantage of more efficient shipping methods and enable the supplier to increase the stability and predictability of their own production schedule. Short lead times can lead to expedited shipping, overtime, and frequent changeovers in production.

3, 5

In a make-to-order system, which inventory stage (raw materials, work-in-process, or finished goods) is likely to have the highest inventory levels? Which stage is likely to have the lowest?

In a make-to-order system, which inventory stage (raw materials, work-in-process, or finished goods) is likely to have the highest inventory levels? Which stage is likely to have the lowest?

a) Raw materials has the highest, finished goods the lowest.

b) Finished goods has the highest, raw materials the lowest.

c) Work-in-process has the highest and finished goods the lowest.

d) Raw materials and finished goods have the highest, work-in-process the lowest.

In a traditional (non-lean) system, finished goods are likely to have the highest inventory levels and work-in-process will have the lowest. In a lean/just-in-time system, finished goods may hold the highest levels of inventory as both raw materials and work-in-process are reduced to nearly zero inventory.

1, 8

In a make-to-stock system, which inventory stage (raw materials, work-in-process, or finished goods) is likely to have the highest inventory levels? Which stage is likely to have the lowest?

In a make-to-stock system, which inventory stage (raw materials, work-in-process, or finished goods) is likely to have the highest inventory levels? Which stage is likely to have the lowest?

a) Raw materials have the highest, finished goods the lowest.

b) Finished goods have the highest, raw materials the lowest.

c) Work-in-process has the highest,

finished goods the lowest.

d) Raw materials and finished goods have the highest, work-in-process the lowest.

In a traditional (non-lean) system, finished goods are likely to have the highest inventory levels and work-in-process will have the lowest. In a lean/just-in-time system, finished goods may hold the highest levels of inventory as both raw materials and work-in-process are reduced to nearly zero inventory.

1, 8


46

Existing question



Why is the reduction of setup times so important in lean manufacturing systems?

Why is the reduction of setup times so important in lean manufacturing systems?

a) Reduced setup time allows smaller lot sizes which leads to greater responsiveness.

b) Reduced setup time reduces wait times by allowing workstations to be used productively more quickly.

c) Reduced setup time allows for a reduction in required finished goods inventory.

d) Reduced setup time leads to higher quality product.

e) Reduced setup time leads to shorter processing times.

Setup time is non-productive time. This leads to longer reaction times, which may necessitate carrying finished goods inventory to satisfy urgent customer orders. In addition, during the setup process, raw material inventory is typically staged for production, but not being utilized. This leads to increased material wait times, a form of waste. Setup time is not related to the quality of the product or the processing time.

8

Why is it often beneficial to develop a long-term relationship with suppliers?

Why is it often beneficial to develop a long-term relationship with suppliers?

a) Improved communication/sharing of data

b) More stable schedules c) Reduced material procurement

transaction costs d) Improved maintenance

scheduling e) Increased employee

empowerment

Long-term relationships often lead to improved communications, sharing of forecast data, development/modification of materials to better meet customer needs, and more stable production/delivery schedules. The costs of transactions (identifying a supplier, communicating orders, shipping, and receiving) can also be reduced as long-term relationships mature.

5, 8

In many just-in-time systems, suppliers open a facility close to their key customers. Why would this be advantageous?

In many just-in-time systems, suppliers open a facility close to their key customers. Why would this be advantageous?

a) Reduced shipping lead times b) Improved communications c) Cheaper rent d) Closer to their own suppliers.

Opening a facility in close proximity to customers allows the supplier to reduce lead times (by shortening shipping delays) and improves communication. Both are key to the success of a lean/JIT system.

5

What are the advantages of small, weekly deliveries of raw materials as opposed to larger, less frequent deliveries?

What are the advantages of small, weekly deliveries of raw materials as opposed to larger, less frequent deliveries?

a) Ability to more closely match demand

b) Reduced inventory build-up c) Detect quality problems more

quickly d) Less expensive total delivery

costs e) Spread out the work for workers

receiving inventory

Smaller deliveries may more closely match the actual usage of raw materials in production, preventing the build-up of inventory that cannot be immediately consumed. Smaller deliveries also make it easier to identify quality issues early in the process, which can reduce the cost of defective batches. Smaller deliveries also lower holding costs for the customer.

4, 9


47

NOTE: In longer games, students should purchase as much market research as they can right away. There is a minimal cost to buy it, and the knowledge can really help in planning their strategy!

Existing question



What are the disadvantages of small, weekly deliveries of raw materials as opposed to larger, less frequent deliveries?

What are the disadvantages of small, weekly deliveries of raw materials as opposed to larger, less frequent deliveries?

a) More expensive total delivery costs

b) Increased number of received orders to be processed

c) Less on-hand inventory to hedge against quality problems/failures

d) Increased holding costs e) Reduced ability to match

customer demand.

Smaller deliveries may incur higher total shipping costs and must be received/stored individually, which will also be more costly. If extensive quality inspection is required for each batch these costs may also be higher.

4, 9

Module 3: Forecasting and Contracts

Making the right choices about which contracts to bid on can make a huge difference on the bottom

line. One way to do that is forecasting. By obtaining market research that predicts upcoming trends,

the player will gain a better understanding of which products customers will likely be asking for.

Another important element in this module is evaluating contracts and making effective bids.

Research

Players can buy market research reports that

forecast trends for up to a year in advance.


48

Make-to-Order vs. Make-to-Stock

Until now, players have been running a Lean / Just-in-Time operation and buying specific raw materials

as needed. However, once players have a sense of what products will be popular in the near future,

they can stockpile required materials in advance, and upgrade or add machines to their production

floor. Of course, there is a risk involved in purchasing materials without a specific contract in place.

Bids

It’s tempting to bid on everything: however, if too many bids are accepted you can easily be swamped

and unable to complete the work. Therefore,Module 3 limits you to 2 bids per turn. A higher concern is

bidding on contracts that they are unlikely to win. In this case, they can easily find themselves with too

much of the facility idle and losing money. This is where a player must begin building their reputation!

Work Request Analysis

A good match between producer and customer is important. The bidding process offers a chance to strategically analyze jobs to determine if the opportunity is a good fit. In Practice Operations, key aspects are reputation, quality, materials, processes, capacity, and profitability. The bidding process can be used to highlight each of these aspects.

At the beginning of Module 3, there are three materials already in stock – Nylon, Silk, and Cotton.

Notice that the factory is already short of cotton, so bidding on jobs that use cotton will require additional purchases. However, we have unallocated supplies of both Nylon and Silk, so jobs that use those materials will allow us to reduce our overall inventory holdings.


49

Looking at the production floor, we currently have four processes available – cutting, sewing, press transfer, and packaging. Jobs that require other processes will necessitate a capital investment before we can begin production.

There is only one production run currently in process, so there is sufficient capacity for additional work requests.

Looking at the work requests available

for bid, most are out of our league (as

far as reputation is concerned) or

require materials that are already in

short supply, such as cotton. However,

the order for Boxer Shorts (Down

Under) and one order for sports pants

(Burgundy Fashion) are possibilities.

We can see that both orders require

only cutting, sewing, and packaging, so no new equipment is needed. Although both require more

material than we currently have on hand, the lead time is sufficient to obtain more.

These appear to be good matches for our system. Notice that the quality requirements for each are in

line with the quality level of our existing materials. The final check is to ensure profitability of the orders.

Boxer Shorts use one unit of silk for each

item. Silk of acceptable quality (50) can be

purchased for $3.20 per unit from Owens

Textiles.


50

Since we are already paying our employees, their salaries are a sunk cost, unless we intend to fire them.

However, in this module employee costs can be ignored (each employee’s salary is $0.00 per week).

Shipping the products will cause some additional costs to be incurred, but the unit price of $15.25, with

a material cost of just $3.20, leaves plenty of room for profit.

To attempt to overcome the mismatch in reputation with Down Under, reduce the unit price to $13.50.

Sports pants use 2 units of nylon for each item. Nylon of acceptable quality (50) can be purchased for

$1.76 per unit from Owens Textiles. Once again, the unit price of $14.75 leaves a large profit margin.

To attempt to overcome the mismatch in reputation with Burgundy Fashions, reduce the unit price to

$13.00.

Although both bids are

rejected, additional

opportunities to reduce raw

material inventories will

arise. In turn 3, a work

request from Stallion Apparel

becomes available for

bidding. This request

matches our reputation

better, and still utilizes the

existing stock of nylon.

However, it requires heat

transfer equipment which is

not currently in the factory.

This equipment must be purchased at a cost of $1,800.

In this case, the profitability of the order ($5,850 less $1,056 in materials) can justify the purchase of the

new equipment. If the bid is accepted, the new equipment can be purchased in the next turn.

Batch Manufacturing

In Practice Operations, products are produced in batches. Each batch moves through the factory

together, from machine to machine, until all necessary processes have been completed. The

shortcomings of batch manufacturing can be highlighted in Practice Operations.

For example, a work order for

200 coach’s jackets will first be

processed at the cutting station,

and then proceed to sewing,

heat transfer, and packaging.

Notice that each step doesn’t

begin until the preceding step is

completed, which results in a

long lead time for the products,


51

NOTE: Raw material availability may allow bidding on lucrative short lead-time contracts.

with much of the time spent idle. In this example, each finished goods item spends 550 seconds being

processed (96 seconds in cutting, 166 seconds in sewing, 144 seconds in heat transfer, and 144 seconds

in packaging. However, total production time for the batch of 200 units is 1,873 minutes. Therefore,

each item spends less than 0.5% of its time in the factory actually being processed and over 99.5% of the

time waiting! Batch processes can also lead to low levels of equipment utilization.

Forecasting and Specialization

Rather than attempting to be all

things to all customers, an effective

strategy is to specialize. Focusing on a

few, similar products can simplify

processes and minimize investment in

equipment. Selecting an area of

specialization can begin with

forecasting.

In the Research screen, the Top

Product and Hot Products are

identified. Examining the reports

(here only the winter and spring

reports since the Module 3 simulation lasts for 20 turns), it is clear that only a small number of materials

are used to produce the majority of the Top/Hot products.

Clearly silk and nylon offer more

flexibility. This allows speculative

purchases of these raw materials to

ensure stock is available on short

notice.

In addition to raw material considerations, process commonality is another key factor. Existing

processes (cutting, sewing, press transfer, and packaging) can support sports pants, ties, and boxer

shorts. Addition of heat transfer equipment will allow production of coach’s jackets and windbreakers.

MATERIAL “HOT” PRODUCTS

Silk Boxer Shorts, Ties

Nylon Sports pants, Coaches Jackets and Windbreakers

Denim Denim Jackets

Wool Hunting Pants

Khaki Bermuda Shorts


52

A specialized production system with cutting, sewing, press transfer, heat transfer, and packaging, using

nylon and silk raw materials, would support at least two of the top/hot products for both the winter and

spring seasons.


As with previous modules, it is important for students to follow the in-game tutorial for this module to

be sure they are introduced to all the key elements. Students will need a clear understanding of all the

points from the two modules they have played through before starting Module 4. If students are unsure

of any part of the module, allow them time to replay it, as well as reviewing this section of the Student

Manual. Once students feel comfortable with the concepts introduced in Module 3, have them try

different bidding and purchasing strategies to see how it affects their profits.


1. Analyze prospective work orders and bid on them strategically.

2. Understand “Make to Order” processes in a manufacturing scenario.

3. Define an organization’s business by identifying customer needs and how to satisfy them.

4. Explain how strategy exists at different levels in the organization.

5. Understand the difference between market-based and resource-based approaches to strategy.

6. Understand the nature of organizational competencies and capabilities.


Existing question Multiple-choice version * correct answers are bolded




a) Production is started when the order is received in “make-to-order” systems, rather than before in “make-to-stock” systems.

b) Production is started when the order is received in “make-to-stock” systems, rather than before in “make-to-order” systems.

c) There is no difference. d) Make-to-stock systems are

better because it is safer to have inventory on hand.

In a make-to-order system production is not started until the customer order is received. In a make-to-stock system, products are produced prior to receipt of customer orders.

2, 3, 5


53



What are key factors that determine the attractiveness of a prospective work order?


a) Profitability b) Lead time c) Production capability d) Raw material availability e) Quality f) Staffing g) Weather

Profitability, lead time, production capability, raw material availability, quality.

1

Why are customers often willing to pay a higher price for faster delivery?

Why are customers often willing to pay a higher price for faster delivery?

a) Greater customer responsiveness.

b) Avoid unnecessary inventory purchases.

c) Fewer inventories lost in transit.

d) Make up for poor scheduling.

Faster delivery allows customers to better understand their market before purchasing products. This enables the customer to carry lower levels of inventory and can help avoid the purchase of products that aren’t ultimately needed.

1, 3

Why is it important for the manufacturing strategy to match the overall strategy of the firm?

Why is it important for the manufacturing strategy to match the overall strategy of the firm?

a) Inefficient use of equipment

b) Inability to meet customer requirements

c) Unnecessary capital investments

d) To utilize obsolete equipment

e) Improve quality of raw materials

Mismatches between manufacturing and corporate strategy can lead to inefficient use of equipment (e.g. using equipment designed for large batches to produce small quantities), inability to meet customer requirements (e.g. quality), and to unnecessary investment (e.g. purchasing equipment that is capable of producing a higher quality product that is needed). By coordinating manufacturing and corporate strategies, the firm can most effectively apply its resources where they are needed.

4


54



How can forecast information (for example, an understanding of what future “hot” products might be) improve overall firm performance?

How can forecast information (for example, an understanding of what future “hot” products might be) improve overall firm performance?

a) Allows for effective planning and potential cost savings in material purchasing

b) Facilitates purchase of appropriate equipment

c) Facilitates proper market exit strategy planning

d) Enables quantitative thinking among employees

e) Improved ability to market product.

f) Shorter processing times.

Accurate forecasts allow the firm to effectively plan its activities. The ability to purchase raw materials with longer lead times (and possibly taking advantage of quantity discounts for raw materials) can lower material costs significantly while avoiding costly expediting. Purchasing equipment to provide the ability to produce the products customers want, and upgrading to eliminate bottlenecks, can allow the firm to win contracts and to improve its reputation among customers. Knowing what products may be going out of favor allows the firm to plan an exit strategy to avoid obsolete inventory, which must be disposed of at a loss.

3, 6

Why is it important for firms to take a strategic approach

to developing competencies and

capabilities?

Why is it important for firms to take a strategic approach to

developing competencies and capabilities?

a) To avoid unnecessary investment in resources

b) To retain competitiveness c) To avoid waste d) To ensure cohesion among

departments

Developing competencies and capabilities generally involves a significant investment of the firm’s resources (capital, employees, and training). Failing to consider the overall strategy can result in localized expenditures for capabilities that do not support the overall mission of the firm. This, in turn, wastes resources and reduces the firm’s ability to invest in capabilities that are needed. Ultimately, the firm is either less competitive (by lacking necessary capabilities) or has higher costs (due to waste). In either case, more effective competitors can prevail in marketplace competition.

4, 5


55



When is it appropriate for the firm to look to the market when developing its strategy?

When is it appropriate for the firm to look to the market when developing its strategy?

a) To identify unfilled niches in mature markets

b) To develop unique products or capabilities not yet present in the market

c) When material costs are high

When the market is relatively mature, customers may already have numerous suppliers from which to choose. In this case, a new entrant must find a “niche” where it can win a share of the market. This niche is most likely to be identified by understanding the needs of customers and capabilities of competitors.

3, 5

When is it appropriate for a firm to look at its own resources when developing its strategy?

When is it appropriate for a firm to look at its own resources when developing its strategy?

a) To identify unfilled niches in mature markets

b) To develop unique products or capabilities not yet present in the market

c) When material costs are high

A resource-based strategy is most likely to be successful when a firm has (or can develop) a unique product or capability not currently present in the market. By focusing on developing a set of capabilities that best meet the firm’s perceived opportunity, a company can move far ahead of existing (and potential) competitors.

3, 5

What are the important factors (from a customer perspective) when considering whether to accept or reject a bid from a supplier?

What are the important factors (from a customer perspective) when considering whether to accept or reject a bid from a supplier?

a) Delivery time b) Cost c) Quality d) Reputation e) Location f) Sustainability

In Practice Operations, the important factors are delivery time, cost, quality, and reputation. These are a simplification of the factors considered by real-world firm (where reputation may be broken down to elements such as support, trust, reliability, ease of use, etc.).

3

What are the factors that a supplier can vary to attempt to earn an order from a potential customer?

In Practice Operations, what are the factors that a supplier can vary to attempt to earn an order from a potential customer?

a) Delivery time b) Cost c) Customer service/product

support d) Quality e) Customization f) Special services (e.g.,

packaging)

In Practice Operations, the factors are delivery time and cost. Other factors that real-world firms can use are product support, quality, special services (packaging, labeling, etc.), and customization, to name a few.

1, 3


56



In general (not just in Practice Operations), what are factors that a supplier can vary to attempt to earn an order from a potential customer?

a) Delivery time b) Cost c) Customer service/product

support d) Quality e) Customization f) Special services (e.g.,

packaging)

In Practice Operations, what steps might lead you to successfully win a bid with a customer who has a higher reputation than yours?

In Practice Operations, what steps might lead you to successfully win a bid with a customer who has a higher reputation than yours?

a) Shorten delivery time b) Lower cost c) Increase quality d) Offer more product e) Extra support

Shortening the delivery time or lowering the cost.

1, 3

What are the key elements of an “exit” strategy, implemented when a product line will no longer be offered?

What are the key elements of an “exit” strategy, implemented when a product line will no longer be offered?

a) Use up inventory b) Reassign/rebalance

resources (workstations, labor) to reflect new product mix

c) Dispose of unneeded equipment

d) Advertise clearance sale e) Develop new competence to

replace product line

Dispose of unneeded equipment, consume raw material inventory (without replenishment), rebalance equipment production rates to reflect the new product mix, reevaluate staffing levels in receiving, production, and shipping.

2, 6


57



Customers may value (or weight) the different aspects of customer service (quality, cost, and delivery) differently. Why is understanding this weighting system important from a supplier’s perspective?

Customers may value (or weight) the different aspects of customer service (quality, cost, and delivery) differently. Why is understanding this weighting system important from a supplier’s perspective?

a) To make better decisions about manufacturing tradeoffs

b) To facilitate marketing decisions

c) To improve the supplier’s core competencies

d) To better be able to serve the customer

Manufacturing often involves tradeoffs (for example, faster delivery may lead to higher costs). Understanding how customers value the different aspects of service can enable the supplier to make better decisions about tradeoffs.

3

Why is it important for the receiving department to be aware of the manufacturing strategy?

Why is it important for the receiving department to be aware of the manufacturing strategy?

a) To ensure that receiving is able to process incoming orders effectively to implement production strategy.

b) To ensure that all

departments are working

together.

c) To ensure that receiving is able to create enough space in the warehouse.

d) To ensure that manufacturing has all the materials it needs.

Receiving must be capable of processing the raw materials required to meet the production strategy. In Practice Operations, this involves setting staffing levels. In the real world, this may also involve space considerations, equipment, and training. Proper development of receiving capabilities is important for the smooth operation of the entire system.

3, 6


58



Why is it important for the shipping department to be aware of the manufacturing strategy?

Why is it important for the shipping department to be aware of the manufacturing strategy?

a) To ensure that shipping is able to send completed orders out efficiently.

b) To ensure that all

departments are working

together.

c) To ensure that shipping is able to create enough space in the outgoing warehouse.

d) To ensure that manufacturing isn’t forced to expedite orders because they cannot be shipped in time.

Shipping must be capable of processing the finished goods produced in the Production area. In Practice Operations, this involves setting staffing levels. In the real world, this may also involve space considerations, equipment, and training. Proper development of shipping capabilities is key to the smooth operation of the entire system.

3, 6

In Practice Operations, the forecast is presented in terms of identifying the “hot” and “popular” products. What other information can be included in a forecast?

In Practice Operations, the forecast is presented in terms of identifying the “hot” and “popular” products. What other information can be included in a forecast?

a) Demand quantity b) Demand timing c) Demand location d) Industry trends

Forecasts can also indicate expected quantities to be sold or the timing of orders. In some cases, forecasts are generated for individual customers. In others, forecasts are generated for products, regardless of customer.

1, 3, 5

Module 4: Human Resources and Capacity Planning

So far, players have been managing production, ordering, shipping, receiving, sales and predicting the

market. It’s time to add human resources to the mix. This module will show students when and how to

expand their workforce to handle a growing customer base seeking more and larger orders. They will

also see when it is cost effective to purchase upgraded equipment and to train existing staff to increase

production capacity.


59

Human Resources

When more work must be completed in a specific area, the player can either train an existing employee or hire somebody new. This area is also where players manage the organization of each department.

Training

When players get really busy, their

company will quickly reach a point

where more help is needed. A

player can train an existing

employee or hire someone new. If

they have an area that won’t be

busy for several weeks, it can make

sense to train an employee who is

currently working in a relatively

quiet department and reassign that

person to the busy area. Staff

trained in multiple areas can be very

useful at preventing holdups in production.


60

NOTE: Be sure to compare all potential hires before making a decision. An employee may require a higher salary but have skill in multiple areas, saving the company the cost of training later. Conversely, hiring someone with higher skills in a single area for less salary can make sense if that area is always busy.

(More on this is in the Tips in Module 5)

Hiring

Training is a good idea overall, but there will also need to

hire new people when the volume of work demands it.

The pool of potential hires will have a variety of skills and

demand different amounts for a salary. For example, Tom

O’Leary is hired into the receiving department in order to

help sort more incoming materials. As was illustrated

earlier in the manual, the inability to sort fast enough can

delay production. However, that skill will also meet the

need if Tom is shifted to the shipping department after

materials have been sorted and additional staff is needed

to help get product out the door.

Try not to wait too long to hire or train new staff.

Anticipating staffing needs will prevent delays

that may occur while waiting for a person to

accept your offer or complete training.

Severance

Employee salaries are paid whether or not the worker is busy. While it may be tempting to fire an idle

worker, Practice Operations does impose a

severance charge of two weeks’ salary for any

employee who is fired. Careful planning of

staffing levels, along with retraining and

reassignment of current workers can help

players avoid these charges.


61

Managing the Organization Chart

Clicking on the HR manager’s desk brings up the organization chart. Here players can review payroll,

both overall and for specific departments. Students can see how many staff are in each department and

how good they are at their assigned job. Their skill level raises the amount of work they can do, so a

person with 4 stars in Production will process more product than someone with only 2 stars.

Capacity Planning

The most straightforward approach to capacity planning takes place in the receiving area. Each shipment must be sorted before it is available for use. Since incoming shipments are fairly predictable, determining the necessary capacity is easier here than elsewhere. Each week’s expected deliveries can be observed in the Receiving screen by clicking on the Delivery Schedule.

For example, early in Module 4, the delivery schedule shows 825 units per week are scheduled to arrive.


62

NOTE: Longer term, players should observe their usage of raw materials and plan the receiving staff accordingly.

However, there is already a backlog of unsorted stock (accessed by clicking on the unsorted stock in the Receiving area) and sorting capacity is currently insufficient to keep up with incoming materials (in this example, sorting capacity is 525 units per week as shown in the Unsorted Stock window). With over 1,400 units’ unsorted, plus 825 units per week arriving, sorting capacity must be increased to about 1,525 units per week to clear the backlog in two weeks. This will require hiring two or three new employees to work in the receiving area.

Scheduling a Job Shop with a Spreadsheet

With multiple work requests in process, prioritization can become an issue. With three or more work centers, even a small number of work requests can be daunting to prioritize. A spreadsheet program (for example, Microsoft Excel) can be a useful tool when evaluating potential schedules.

At the beginning of Module 4, there are five work requests waiting to be scheduled in the Production area.

These five products have different routings, which causes different processing durations as they pass through production. Here it will be helpful for players to build an interactive spreadsheet to evaluate the impact of different prioritization schemes.


63

Gather Basic Information

First, some basic information must be gathered and a few calculations are needed. The quantity for each order is entered in column C and the due date is entered in column J. Multiplying the processing time for each station (Cutting, Sewing, etc.) by the quantity ordered allows the student to calculate the time required (shown in weeks here) for each process/job combination.

Prepare a Schedule

With this information, it is possible to prepare a schedule for each work center. The Cutting process for the first job (Plain T-Shirts) starts at time 0 and lasts 0.9 weeks. Once this order is complete, the next job at the Cutting center (Sports Shorts) can begin and the Plain T-Shirts order can begin at the Sewing center (the next process required for this product).

Note that an order cannot begin processing until it has finished at the preceding workstation. For example, Sports Shorts cannot begin processing at the Dyeing station when Plain T-Shirts are finished (at time 6.0) because the Sports Shorts are not finished at the Press Transfer station until time 8.2. Sports Shorts are similarly delayed at the Packaging station.


64

Compare Schedules using Different Priorities

For example, compared to the earliest due date schedule shown earlier, scheduling jobs to prioritize those with the shortest overall duration reduces the number of late jobs (from two to one), but increases the total lateness (from 2.4 weeks to 4.2 weeks).

Matching Capacity to Demand

On the Production Floor, capacity is determined in two ways. First, the number of jobs that can be in the system at any given time is limited by the number of production employees (one employee is required for each job after the first). Second, the processing rate of each machine can limit the number of items that can be produced each week.

To determine the number of employees to staff the production floor, it is necessary to balance the capacity across all aspects of the business. If too many jobs are active in production, there may be insufficient capacity in Receiving and/or Shipping. In addition, to keep production employees busy, it may be necessary to hire additional customer service agents.

For example, at the beginning of Module 4 there are 5 work requests waiting to be produced.


65

Maximizing Throughput

In order to maximize throughput, these jobs should be processed as quickly as possible. Assuming there are no equipment upgrades, the production floor should be staffed to maximize utilization of the equipment. Although this staffing level does depend somewhat on the order in which jobs are processed, we will assume jobs are processed in order of their due dates. Therefore, the approximate production schedule for these jobs will be as follows (if no equipment upgrades are purchased).

From this production schedule, it is clear that as many as 4 jobs can be active at any time. In fact, if

players consider that additional work requests may be added to the schedule as earlier jobs are

completed, it seems that 3 or 4 active jobs will be the norm. Therefore, staffing the production floor

with 3 employees is a good starting point.

With this production schedule, it will be necessary to have all raw materials in stock and available within

3 weeks. This means that receiving capacity may need to be as high as 3,000 units per week. This is, in

fact, not feasible in this module. A more reasonable plan might be to increase receiving capacity to

1,500 units per week (by hiring 3 new employees for the receiving area). This causes the production

schedule to be modified, but production staffing of 3 employees is still reasonable.

In the Shipping area, base capacity is quite low. One order with a size limit of 75 pounds is insufficient.

Therefore, additional staffing is required. Hiring two workers increases capacity to three orders per

week with a total weight of about 2,500 pounds. This may be more weight than is needed, but the long

term goal of having about 3 orders per week in process will require this level of capacity.

Finally, the Bidding and Contracts area also needs to be in balance with the rest of the facility. With two

to three jobs being completed each week, the ability to bid on two or three orders (assuming some bids

will not be won) is needed. Staffing the Bidding and Contracts area with two employees gives players the

ability to bid on three contracts each week.

At this point, the production system is well-balanced, with each department capable of supporting the

goal of three active jobs at any given time.


66

Constraints and Bottlenecks

Because the Practice Operations factory is set up as a job shop with batch scheduling, attention to

constraints and bottlenecks is particularly important. Identifying the bottlenecks in the process is

straightforward, beginning with determining cycle time for each work station.

To prepare for this demonstration, employees must be hired in Receiving (hire 2 employees) and

Production (hire 2 employees). Start production orders for Plain T-Shirts, Sports Shorts, White Socks,

and Low-Rise Jeans as soon as all workers are available.

Routing Pathways

At the start of Module 4 there are five work requests in the factory, with three separate routings.

Routing 1 Plain T-shirts Cutting, Sewing, Press Transfer, Packaging

Routing 2 Sports Shorts and White Socks Cutting, Sewing, Packaging

Routing 3 Low Rise Jeans and Bermuda Shorts Cutting, Sewing, Dyeing, Packaging

Finding Bottlenecks

To identify the bottleneck, cycle through the stations and record the cycle time (notice that the cutting station has already been upgraded in the first turn).

Process Time (seconds per unit)

Routing Cutting Sewing Press Transfer Dyeing Packaging Bottleneck

1 72 166 244 N/A 144 Press Transfer


3 72 166 N/A 144 144 Sewing

For routings 1 and 2, the bottleneck operation is Press Transfer. For routing 3, the bottleneck operation is sewing. Upgrading both of these work stations is recommended (with the following results).

Process Time (seconds per unit)

Routing Cutting Sewing Press Transfer Dyeing Packaging Bottleneck




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3 72 136 N/A 144 144 Dyeing/Packaging

After the upgrades, the Press Transfer station remains the bottleneck for routings 1 and 2, but Dyeing

and Packaging are now bottlenecks for routing 3.

the presence of several different routings complicates the bottleneck analysis. An alternative means of

identifying bottlenecks is to examine the utilization of equipment. Machines with particularly high

utilizations are potential bottlenecks.

With four work requests active in the factory, the production plan initially shows that Sewing is the most

highly-utilized work station (after upgrades as described earlier).

This is not surprising because Sewing (and Packaging) are two of the three operations that all work

requests pass through (the third is Cutting, but capacity there is highest of all workstations). Packaging

has not been highly utilized at this point because no jobs have reached that stage.

For the next week, the production plan shows that Sewing and Press Transfer are the most utilized

operations.


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For February, Week 2, utilization changes as the product mix begins to shift.


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As products move closer to completion, the Packaging station becomes highly utilized.

The packaging station remains highly utilized for several weeks.


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Note that in this example no new jobs were started into the system. However, it is clear from actual

utilizations that the bottleneck resources are still Sewing and Packaging. Upgrading each of these

stations is recommended.

Students can continue this analysis as the module progresses to better tune their system.

End of the Tutorial

There is a brief Tutorial at the start of Module 4 to introduce Human Resources and describe how to hire

and train people. From then on, players are on their own! Students should continue to make use of the

Student Manual as a reference supplement. As you can see from the material above in Module 4, there

are a lot of useful tips for students to apply in order to improve their results when playing Practice

Operations. More of these plans are contained in the next section for the full length game in Module 5.


1. Factor capacity planning into strategic decision making.

2. Understand how human and physical resources contribute to operations capacity.

3. Assess difficulties of matching capacity to demand.

4. Analyze the impact of constraints and bottlenecks on a manufacturing process.


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Why is it important for the receiving department to be properly staffed and equipped?

Why is it important for the receiving department to be properly staffed and equipped?

a) So it can process raw materials in line with the production strategy.

b) So employees will be more content with their workplace.

c) So budget expenditures on equipment can be more easily justified.

Receiving must be capable of processing the raw materials required to meet the production strategy. In Practice Operations, this involves setting staffing levels. In the real world, this may also involve space considerations, equipment, and training. Proper development of receiving capabilities is key to the smooth operation of the entire system.

2

Why is it important for the shipping department to be properly staffed and equipped?

Why is it important for the shipping department to be properly staffed and equipped?

a) So it can process finished goods in a way that does not impede production and does not delay orders.

b) So it is able to create enough space in the outgoing warehouse.

c) So manufacturing isn’t forced to expedite orders because they cannot be shipped in time.

Shipping must be capable of processing the finished goods produced in the Production area. In Practice Operations, this involves setting staffing levels. In the real world, this may also involve space considerations, equipment, and training. Proper development of shipping capabilities is key to the smooth operation of the entire system.

2


When scheduling production of products, what are the critical factors to consider?

a) Quality b) Timeliness c) Quantity d) Capacity e) Morale f) Budget

Quality, timeliness, quantity, capacity 1, 2, 3, 4



a) Setup time reduces available production time, limiting production capacity.

b) Setup time affects the processing time.

Setup time consumes available capacity, reducing the total amount of product that can be produced.

2



a) To avoid machine idle time.

b) To ensure product is delivered on time.

c) To give priority to more profitable jobs.

a) To make sure jobs are processed in a First-In-First-Out order.

Prioritization is a reflection of order importance, as determined by due date, profitability, material availability, or other factors. Without prioritization, the differences among orders would not be readily visible, potentially leading to processing in the wrong sequence.

3, 4


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a) Additional setups b) Scrapped parts c) General confusion on

production floor d) Delays in delivering product e) Faster product turn-around

Additional setups may be incurred as work is stopped and then restarted. Confusion on the production floor as machines must be re-tasked. Promised delivery dates may be changed as production is delayed.

4



a) Addition of a higher-priority order.

b) Change in due date of existing orders.

c) Unavailable raw materials. d) Some orders take longer than

others to complete. e) Workstation utilization will be

reduced.

Order prioritization might be changed to reflect the addition of a new order with higher priority or in response to changes in existing orders (such as moving a due date earlier or later).

3, 4



a) It incurs “unnecessary” costs

such as storage or opportunity

costs

b) It may lead to production for

the sake of using inventory

c) It can mask underlying problems in the facility

Inventory causes the firm to incur costs (storage, handling, degradation, and opportunity costs) and can lead to poor decision-making (building products not because they are needed, but because the raw materials are already owned).

1, 2



a) Profitability

b) Lead time

c) Production capability

d) Raw material availability

e) Quality f) Staffing g) Weather

Profitability, lead time, production capability, raw material availability, quality.

2, 4


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Why is it important for firms to take a strategic approach to developing competencies and capabilities?

Why is it important for firms to take a strategic approach to developing competencies and capabilities?

a) To avoid unnecessary investment in resources

b) To retain competitiveness c) To avoid waste d) To ensure cohesion among

departments

Developing competencies and capabilities generally involves a significant investment of the firm’s resources (capital, employees, and training). Failing to consider the overall strategy can result in localized expenditures for capabilities that do not support the overall mission of the firm. This, in turn, wastes resources and reduces the firm’s ability to invest in capabilities that are needed. Ultimately, the firm is either less competitive (by lacking necessary capabilities) or has higher costs (due to waste). In either case, more effective competitors can prevail in marketplace competition.

1

What are key factors to consider when evaluating potential employees?

What are the factors to consider when evaluating potential employees in Practice Operations?

a) Cost (salary) b) Skill level c) Flexibility d) Education e) Willingness to learn f) Communication skills

In Practice Operations, the factors are cost (salary), skill level, and flexibility. In the real world, there are many, many more possible factors.

2

What are important factors to consider when evaluating potential employees in Practice Operations and in general?

a) Cost (salary) b) Skill level c) Flexibility d) Education e) Willingness to learn f) Communication skills

Why is it important to begin the hiring process before the employee is actually needed?

Why is it important to begin the hiring process before the employee is actually needed?

a) Ability to interview more applicants, giving the opportunity to hire a less expensive and/or more capable employee.

b) To avoid bottlenecks before they occur by having required capacity in place.

c) To avoid unionization.

By beginning early, the firm has the ability to review a larger pool of applicants, possibly allowing them to hire a less expensive and/or more capable employee. Often it makes sense to hire a particularly well-suited candidate before he/she is actually needed so operations can progress smoothly.

1, 2


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When does training an employee to develop a needed skill make good sense? When is training not a good option?

When does training an employee to develop a needed skill make good sense?

a) When it is less expensive than hiring a new employee.

b) When the new skill is not needed immediately.

c) When training and promoting internally can increase overall morale.

d) When it is more expensive than hiring a new employee.

e) When the new skill is needed immediately.

f) When hiring internally may lead to “settling” for someone that is not ideal for the job.

Training is useful when the total cost of employment (training costs + salary in Practice Operations) is lower than the cost of hiring a similar employee directly. In the real world, developing talent from within can raise morale, decrease turnover, and improve employee effectiveness. Training is not a good idea (in Practice Operations) if the skill is needed immediately or if the total cost of employment is higher than hiring a new employee. In the real world, developing talent from within can lead to settling (not finding the best person for a job) and can also lead to lower morale (among employees who are not promoted) and to a lack of new ideas in the firm.

1

When is training an employee to develop a needed skill not a good option?

a) When it is more expensive than hiring a new employee.

b) When the new skill is needed immediately.

c) When hiring internally may lead to “settling” for someone that is not ideal for the job.

d) When it is less expensive than hiring a new employee.

e) When the new skill is not needed immediately.

f) When training and promoting internally can increase overall morale.

Why is it important to identify bottlenecks in a manufacturing system?

Why is it important to identify bottlenecks in a manufacturing system?

a) Bottlenecks limit the output of the overall facility.

b) Capacity expansion should be

focused on bottlenecks.

c) If a bottleneck is fixed, a new bottleneck can develop.

Identification of bottlenecks allows the firm to focus its efforts and resources where they can be most effective in improving throughput. Identification of bottlenecks also enables the firm to determine the overall capacity of the system.

2, 4

How are bottlenecks identified?

How are bottlenecks identified? a) Finding the workstation with

the highest utilization. b) Finding the workstation with

the lowest processing rate. c) Finding the workstation with

the largest queue.

d) Finding the workstation with the shortest queue.

Bottlenecks can be identified by comparing the processing rates of machines in a system (the machine with the lowest rate is the bottleneck) or by evaluating the utilization of equipment (machines with the highest rates of utilization over time are generally the most likely to be actual bottlenecks).

4


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What factors can make identification of bottlenecks difficult?

What factors can make identification of bottlenecks difficult?

a) Frequent changes in product (mix)

b) Bottleneck is outside the production system, e.g., lack of raw materials

c) Lack of knowledge about bottlenecks

Bottlenecks are difficult to find if the product mix is frequently changing (the bottleneck may “shift” based upon which product is being produced) or if there are shortages of raw materials, customer orders, or employees (in these cases, the bottleneck may be outside the production system).

4

Module 5: The New Branch

Module 5 Objectives

This module gives players an opportunity to apply all of the skills gained in modules 1 – 4. Players have up to 50 turns to reach a net worth of $50,000. Once that goal is achieved (or after 50 turns if the goal is not achieved), the simulation ends. Players are then assigned a score based on their performance. Default scoring for this module is

Achieving goal of $50,000 net worth – 50% of score.

Final net worth – 10% of score

Reputation score – 20% of score

Timeliness – 20% of score

Instructors can customize the number of turns and scoring, if desired.

Module 6: Maximize Net Worth

Module 6 Objectives

This module also gives players an opportunity to apply all of the skills gained in modules 1 – 4. Players have up to 50 turns to maximize their net worth. Players are then assigned a score based on their performance. Default scoring for this module is

Achieving goal of completing 50 turns – 10% of score.

Final net worth – 50% of score

Reputation score – 20% of score

Timeliness – 20% of score

Instructors can customize the number of turns and scoring, if desired.


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Try This

Challenge Scenarios

Practice Operations Management is designed in such a manner that various products and markets require students to emphasize different values within the operations process (value, cost, flexibility), which requires players to make different adjustments in inventory management, capacity, production, sourcing, etc. Therefore, in the simulation, players are challenged to create different product designs to meet market conditions.

Challenge Scenarios are short game modules with different content starting points, game events, and victory conditions. In some cases, scenarios might not require the use all game systems available in the full game. Scenarios have clear, focused objectives for the player, and provide the opportunity to learn how the game systems work. In this way, scenarios also have a tutorial role.

Uses of Scenarios

• Students can learn the parts of the complex simulation individually. In educational simulations,

players are challenged to learn, understand, and apply the subject area content knowledge AND

to learn how to play the game, with its own systems and quirks. The more systems there are, the

more complicated learning the game can be. Scenarios may be designed to focus on a few

content learning objectives and a limited number of game mechanics, and can help players learn

to master both.

• Set up the “Aha” moments. Scenarios also have the potential to highlight particular marketing

strategies and situations to draw out “Aha” moments, similar to case studies. It is possible to

craft scenarios that have one (or a few) specific correct path to victory. While the full game

should be flexible enough to be won with multiple strategies, focused scenarios should be tuned

so that victory is achieved by identifying and solving a specific problem. Adding scenarios allows

the simulation to also offer a logic-puzzle experience, complimenting and contrasting the

experience of more haphazard competitive player.

• Flexibility. With scenarios, players can explore the effects of unfair starting conditions and special

mechanics that add re-playability and nuance to the simulation, and highlight different marketing

subjects, which may make the game more interesting and engaging to students.

Possible Player-Client Interactions

• Player offering a discount for late contracts – Trades customer satisfaction for money.

• Player rearranging process to meet critical deadlines – Trades customer satisfaction between difference clients.

• Client complains due to poor quality – Reduces customer satisfaction and can lead to a loss of reputation (up to one full level).

• Client upset over extremely late contracts – Player’s reputation is reduced up to one full level. .


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Frequently Asked Questions

1) What is the player’s role?

The player’s role isOperations Manager of a clothing manufacturer. The player’s company

purchases raw textile materials and turns them into finished clothing and apparel products for a

number of clients. As the boss, the entire operations process is under the control of the player–

securing contracts, acquiring raw materials, controlling production, fulfilling orders, and managing

employees.

2) What is the player’s goal?

In general, the goal is to maximize profits while building a strong reputation as the best clothing

manufacturer in the industry. Each game module may also have a more specific goal (for example, a

certain number of contracts, hit a certain profit milestone, etc.)

3) What is reputation?

The player’s reputation determines how clients see their company and its work. It is represented by

a four-star rating system. The higher the player’s reputation, the better chance that student has to

win bids from clients. A strong reputation may also increase the prices charged for contracts.

Likewise, clients have reputation ratings, too. In general, high reputation clients are looking for a

manufacturer with a similar reputation. Certain clients may not work with one player’s company

until they have increased their reputation to the level the client is seeking.

4) How is the Reputation Score calculated?

Reputation is an integer such that for every 100 points awarded by the game, the player earns a new star rating (1-4). So at 100 points, the player has a 1 star reputation, at 200 a 2 star, and so on.

Upon delivering all of the products in a contract, the game awards the player Customer Satisfaction - 40 reputation points. Customer Satisfaction is calculated by adding Quality Score + Timeliness Score + Customer Service Score, which are defined as such:

Quality Score: 30 - (Desired Quality – Average Delivered Quality)

These quality values are integers between 0 and 100. The maximum score a player may earn for quality is 40 (representing 40% of the total score).

Timeliness Score: 30 - (Completion Date – Due Date) * 10

This value is capped at 40 (representing 40% of the total score).

Players can lose up to one full reputation star (100 points) if the quality is extremely low and/or the contract is delivered late.

Customer Service Score: Average department skill rating (1-4 stars) of the employees’ station in the bidding section of the company. This value is capped at 20 (representing 20% of the total score).


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5) How does a player get a contract?

Contracts are won by a competitive bidding process. The player can view available work requests

from clients in the BIDDING & CONTRACTS area, and submit bids there. The player can adjust the

unit price and delivery time they are willing to offer. Clients will factor in price, delivery time, and

company reputation when deciding whether or not the player will get the bid. After submitting the

bid, the player will find out the following week whethertheir bid was accepted or rejected. Note

the number of bids a player can submit each turn will be limited. Hiring more workers in the

bidding and contracts area will increase the number of bids the player can put in during each turn,

but since the maximum number of open contracts is 6, players can only bid on 6 (or fewer)

contracts per turn.

6) How is the “bid accepted or rejected” decision calculated?

Bid Factors

There are four bid factors taken into account when deciding whether or not to accept a bid:

Price

Date of delivery

Reputation

Customer Service (the average skill of the workers in Bidding & Contracts)

Each client has their own priorities for deciding whether or not to accept a bid. For example,

Stallion Apparel only prioritizes price and date of delivery; they are a low reputation company

and care less about reputation or customer service. Each client has one bid factor which is

weighted twice as much as the others. This is the factor which is displayed as the company’s

priority in game.

Scoring Price

If the offered price is greater than or equal to the requested price, then the score for this bid is 1.0 - ( | 1.0 – Offered Price / Requested Price | ) / Client Leniency Price.

Otherwise, the score is 1 + (| 1.0 – Offered Price / Requested Price |) / Client Leniency Price * 0.375.

If the score is less than zero, then set the score to -2.0 * the number of bid factors for this client. Otherwise, the score is clamped at 2.0.

The final score is: (score * 0.5) * Weight - Weight * 0.5

Date of Delivery

If the offered date of delivery (measured in days - e.g. the first turn would have a value of 1) is greater than or equal to the requested price, then the score for this bid is 1.0 – (| 1.0 – Offered Due Date / Requested Due Date |) / Client Leniency Speed.

Otherwise, the score is 1 + (| 1.0 – Offered Due Date / Requested Due Date |) / Client Leniency Speed * 0.375.

If the score is less than zero, then set the score to -2.0 * the number of bid factors for this client. Otherwise, the score is clamped at 2.0.


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The final score is: score * Weight - Weight

Reputation

When scoring this bid factor, the value for reputation is defined as the smaller number between Company Reputation / 100 and 4.

The score is the smaller number between reputation – Preferred Reputation and 1. The final score is score * Weight.

Customer Service

The customer service score is defined as the average skill for employees in Bidding & Contracts

(a value between 0.0 and 4.0) / Preferred Customer Service * 4.0 - 2.0.

If the score is less than zero, the score is set to -2.0. If greater than or equal to 1.0, it is set to 2.

The final score is: score * 0.5 * Weight

Final Scoring

Each bid factor is scored using the algorithms described above, and added to an overall total. If

that total is greater than or equal to zero, the bid is accepted. Otherwise, the bid did not meet

the client’s standards, and was therefore rejected.

Variable Definitions

Weight: The weight of the bid factor (this is what accounts for client priority). This is a value of

either 1.0 (normal priority) or 2.0 (high priority). Each client will only have one bid factor of high

priority.

Client Leniency Price: This value is a percentage which defines the maximum deviation of an

offered price from the requested price. This value is currently set to 1.5.

Client Leniency Speed: This value is a percentage which defines the maximum deviation of an

offered delivery time from the requested delivery time (measured in days). This value is

currently set to 2.0.

Preferred Reputation: For companies who factor in reputation when scoring bids, this value

indicates their preferred reputation. This is an integer value between 1 and 4.

Preferred Customer Service: For companies who factor in customer service when scoring bids,

thisvalue indicates their preferred customer service . This is an integer value between 1 and 4.

7) How is a contract completed?

Contracts are completed when the player delivers the total quantity of products requested by the

client. The player needs to secure the appropriate raw materials, set up a production run for the

product, and then ship it out to the client. Once this is complete, the player receives a report on


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the financial details of the contract, and feedback on their performance which may increase or

decrease the reputation score. Delivering an on-time shipment that meets or exceeds the client’s

quality preferences is the best way to build the reputation score.

8) What do employees do?

Hiring employees in the HUMAN RESOURCES hub will increase the company’s capacity for work, in

exchange for increased labor costs. When an employee is hired, the player assigns them to one of

four departments: BIDDING & CONTRACTS, RECEIVING, PRODUCTION, or SHIPPING. Adding

employees to BIDDING & CONTRACTS increases the number of bids that can be submitted each

turn, and improves the player’s customer service. Adding employees to RECEIVING increases the

sorting capacity of raw materials. Adding employees to PRODUCTION increases the number of

simultaneous production runs the player can operate. By adding employees to SHIPPING, it

increases the number and size of shipments that can be sent out each turn.

9) What is the effect of training on employees?

Each employee has a skill level (1-4 stars) in three different areas: Receiving & Shipping, Machine

Operations, and Client Relations. When training an employee, the player must select one of these

areas to train in. When trained in a certain area, an employee gains bonuses for working in related

departments. In addition, the various choices for training employees have different effectiveness

values and costs.

Receiving & Shipping

Receiving: For each skill point per employee, the player is able to sort an additional 75 (scaled by

Productivity Deficit) materials per turn. For each worker, an additional 200 materials per turn

can be sorted.

Shipping: For each skill point per employee, an additional 500 lbs. (scaled by Productivity Deficit)

of product can be shipped per turn.

Machine Operations

Each employee on the production floor will allow for an additional simultaneous production run.

Client Relations

Each employee in Bidding & Contracts will allow for an additional bid to be placed, as well as

affecting points for customer service and client satisfaction.

Productivity Deficit: Some bonuses gained from your employees will be diminished during

training. This value is a scalar which gets lower based on the level of training purchased.

Level 2 - 0.50

Level 3 - 0.25

Level 4 - 0.00


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10) How do clients differ from one another?

Each client has its own specific personality traits. Clients are distinguishable from one another by

the products they request, the size of their orders, their priorities (low price, quality, timelines,

etc.), and their reputations. To get details on a client, players can visit the RESEARCH panel in the

BIDDING & CONTRACTS hub, and consider this information when bidding on contracts.

11) How are raw materials purchased?

Every product corresponds to one of six base materials. There are eight suppliers in the

marketplace, and these suppliers vary in terms of price, quality, reliability, and special discounts

offered. Once ordered supplies are delivered, the RECEIVING department will sort the packages

into their appropriate bins, so that they can be used by PRODUCTION. The number of packages that

can be sorted each turn is dependent on the number of employees in the RECEIVING department.

12) How does production work?

Production is where the raw textile materials in RECEIVING are transformed into finished products

ready to ship to clients. Production runs are set up by clicking MANAGE PRODUCTION in the

PRODUCTION hub. Each product has a set number of production processes it needs to go through

to be made. Each process corresponds to a machine on the production floor. Once a product moves

through the PACKING station on the production floor, it will move to the SHIPPING hub, where it is

ready to be sent to the client.

13) What determines the available work requests that will show up on a given turn?

Each turn the game will try to generate new work requests from each client (the clients can be

viewed from the RESEARCH section of the BIDDING & CONTRACTS Department). The game

generates a random number of work requests with a maximum of 4. Each work request has the

following properties:

Product

To select the product that the work request is for, the player looks at the current market cycle (cycles can be viewed in the RESEARCH area in the BIDDING & CONTRACTS Department). Each cycle has one top product, three hot products, and then some more normal products (the number of normal products per market cycle varies).

First, the game generates a random number to determine which product tier to choose from (top, hot, or normal). There is a 40% chance to select a top product, 40% for hot product, and 20% chance to generate a normal product. Once the game determines the bracket, it selects from the list of products in that bracket randomly with even distribution.

Quantity

The game starts with the following:

50 + random [400, 900] * Market Cycle Demand * Client Order Size Factor

Market Cycle Demand: Percentage indicating how much demand there is for the product (random number between 0 and 1)


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Client Order Size Factor: A percentage indicating the client’s personality with respect to order size. Some clients tend to order more products, while others tend to order fewer. This number varies by client, but is generally one of three values: 50%, 100%, 150%

Once this base number is determined, the software sets the final number to the nearest 25 so that all orders are in multiples of 25.

Price

To generate a price, the game starts at a product specific base price (which can be viewed in the Research section of the Bidding & Contracts Department under Average Sales Price).

Once we have the base price we adjust it according to customer personality with the following:

Base Price + random [Client Min Price Adjust, Client Max Price Adjust] * $0.25

The min and max vary per client and are generally between -6 and 6). Note: the game automatically sets lowest possible price at $0.25

Due Date

Due date is calculated by taking the current turn and adding a random number between 8 and 16.

Quality

Quality in Practice Operations is an integer between 0 and 100. To generate a quality for a work request, a random number is chosen between the client’s lowest accepted quality and highest desired quality. Each client’s values for these vary but are generally between 20 and 80.

14) How is Net Worth Calculated?

Each production station has a price that the player may sell it at, which can be viewed by clicking on the station and then clicking on “sell machinery”. To eliminate the incentive to “sell off” all equipment at the end of the game, the selling price is 50% of the purchase value of the equipment and selling equipment has no impact on net worth.

Net Worth = Current Account Balance + sum (Production Station Sell Price)

15) How is Score calculated?

Upon completing a sale, the game generates a customer satisfaction score. The score shown at the

top of the game is a sum of all the customer satisfaction scores. See #1

16) What determines how much of a given operation (ex. cutting) can be completed on a given turn?

In Practice Operations there are 2,400 minutes per turn (week) of available work time. Each

production station has a number of seconds it takes to perform a single operation. This number

can be seen by clicking on the production stations under Time per Operation. This means that each

station can perform 144000 / Time Per Operation operations in perfect conditions. Whenever

changing products to work on or setting one up for the first time, a production station needs extra

time to set up. During set up, no production operations are performed. The production time is

specified per-product, but all the products currently in-game have a setup time of 600 seconds,

which gives us:


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143400 / Time Per Operation in optimal conditions.

Total operations per turn are also determined by the number of production employees. By default,

all companies may produce one thing at a time, but to use two or more stations in parallel the

company must hire workers in the PRODUCTION DEPARTMENT. Each additional worker increases

the number of stations that can be run at the same time by 1.

Products may not be made unless the company has the prerequisite number of materials in the

sorted bins for that product. The sorted bins are the 6 individual pallets in THE RECEIVING

DEPARTMENT. When shipments arrive, they go into the unsorted bin at the bottom. Workers

assigned to that department then sort this bin each turn. The more workers assigned to this

department, the more materials can be sorted. Sorting capacity shows up in the top left when

viewing the Receiving Department. Once sorted, each product requires some number of raw

materials per product (these numbers can be seen in the RESEARCH section of the BIDDING &

CONTRACTS Department or by clicking on the product icon).

17) What does the player need to know about shipping?

Once the player has produced products, they will ship them to their clients in order to complete the

contracts. There are three shipping options, which differ in delivery time and cost. Each player’s

shipping capacity will vary based on the number of employees assigned to the SHIPPING

department.

Documents

Table of Contents - University of Phoenixmyresource.phoenix.edu/secure/resource/OPS571r6/Practice...Updated June 3, 2015 McGraw-Hill Practice Operations 1 Table of Contents Introduction