18792179 Manuelito Villalon

1.! What strategy did you use in Challenge 1? Please discuss and refer to your results. What
strategy did you use in Challenge 2? Please discuss and refer to your results. How
challenge 2 is different to Challenge 1? Please discuss by referring to your results.!

The simulation game has assigned me as a carwash operations manager to manage a working eight-hour
day, with the responsibility of distributing a budget of $3 million to the vacuuming, machine washing and
hand-drying stations. The goal is to maximise efficiency and enhance overall profitability by ensuring I
accurately allocate the budget between each station.!
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Challenge 1’s objective was to obtain capacity while acknowledging that demand would vary throughout the
day and each station would present specified performance of no variation. For the first run, I began
distributing the budget by allocating $1 million to each station which resulted in a $645 profit. I identified the
machine wash station as the bottleneck of the three stations due to the low 80% utilisation of the three
stations from the run while achieving high capacity. !

This meant I needed to invest more capital in the other stations to improve the overall capacity process. The
machine was station would be the lowest priority of budget allocation. I found the average of cars situated at
each station to be 37.5. I decided to calculate how the budget would affect each station’s capacity when
acknowledging the utilisation and capacity of cars per hour. I determined from calculating the upgrades for
each station, to balance capacity, the distribution must be $1 million to the vacuum station upgrading 1.5 cars
per hour, $500,000 to the wash station upgrading 7.5 cars per hour and $1.5 million to the hand dry station
upgrading 13.5 cars per hour. This resulted in the optimal result of $825 and a balanced 100% capacity
utilisation.!

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 18792179 Manuelito Villalon

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Identifying the one bottleneck of the process, as performed in challenge one, would not be
appropriate for the second challenge. Capacity would vary as the day progresses in challenge two
and variation is existent through the unpredictability of the demand forecasted. Challenge two
displayed that each station would not be balanced throughout the day shifting the bottleneck of the
process amongst the stations, creating difficulty in identifying it. Variation in this challenge results in
the throughput time and cycle time being longer and reduced profitability. The optimal result I
achieved was $680 profit by allocating $700,000 to the vacuuming station, $1.2 million to the
washing station and $1.1 million to the hand dry station.!
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 18792179 Manuelito Villalon

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The uncertainty of variability plays an integral role when distinguishing between challenge one and
two. Because of the inability to identify the bottleneck of the process and have a fixed strategy of
investing the budget in other stations as seen in challenge one, challenge two’s bottleneck shifts
through each station.Variability results in prevalent inefficient processes such as prolonged cycle
and throughput times. The balance seen in challenge one manifests how efficient the process is
through the unbiased spread of capacity. Challenge two however explores the possibilities of
factors affecting the process of capacity including equipment failures or maintenance issues. Profit
is additionally affected as seen I was able to achieve an optimal result of $825 while challenge two,
I achieved $680 which was not optimal. Variability must be heavily considered and acknowledged
as an fundamental component of balancing process capacity.!
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(520 Words)!
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 18792179 Manuelito Villalon
2.! How have the two challenges of simulation confirmed or changed your ideas on
capacity management? What really determines process capacity? Please discuss
by referring your results and all relevant concepts.!

The simulation game has confirmed the importance of acknowledging the significance of variability
into capacity management. The two challenges confirmed my idea of capacity management must
be run effectively through management of demand and balancing the spread of capacity to
maximise utilisation. Capacity in any process will always have a bottleneck which is seen as the
component in the process with the lowest capacity, which usually results in the need to reinvest in
other components of the process. Challenge one displayed this through the effective optimal result
and although finding the bottleneck was difficult in challenge two, it is important in order to increase
overall capacity utilisation. As Stevenson (2018) states that bottleneck management is one way by
which organisations can enhance their effective capacities, this will assist the performance of
managing capacity in a process. Process capacity is determined from the bottleneck due to
identifying the lowest capacity and utilising the information to determine how to spread the
distribution of demand. This allows an opportunity to balance each component of the process
capacity.!
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(174 Words)!
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(Total: 694 Words)!
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Reference List:!
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Stevenson, WJ 2018, Operations management, 13th edn, McGraw Hill Irwin, New York!
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