Decision rules

 Opt for contracts generating more revenue (Contracts 2 and 3)

 The decision of purchase of additional machinery to be based on-
1. Average revenue lost by carrying out a contact of lower quantity due to lack of available
machinery: machinery can be purchased when revenue lost is greater than the cost of the
machine
2. Bottleneck: the station which is the bottleneck of the process would be prioritized for
purchasing machinery, as this would reduce lead time
 Switch between contracts performed according to current lead time to accommodate the
required lead time of the contract: When the lead time is decreasing and is about 1, it would
be better to opt for contract 2. When lead time is about 0.5, opting for contract 3 would be
more profitable.
 Priority rule at station 2 to be adjusted to achieve minimum lead time
 Mean and standard deviation of demand to be calculated for inventory control
 Economic order quantity and reorder point for materials to be calculated every 50 days and
the values adjusted accordingly
 The order quantity and reorder point for materials are to be calculated for the final 100
simulated days such that inventory reaches zero by the end of the period