Simulation Of Toolshop Operations And Cost Analysis

Simulation of Toolshop Operations and Cost Analysis

This is a work integrated assessment item. The tasks are similar to what would be carried out in the workplace. 20 marks - 10 for (a), 3 for (b), 7 for (c)

A factory has a toolshop in which one person serves toolmakers and is paid $75 per hour. Toolmakers employed by the factory must go to the toolshop for new tools, and are paid $100 per hour. Over a period of time it has been noted that the time between arrivals of toolmakers at the toolshop and the time to serve a toolmaker are as follow:

• Time between Arrivals (minutes) Relative Frequency .......00
• Service Time (minutes) Relative Frequency ......0 (a) Using Excel set up a simulation model to simulate about 2 hours (120 minutes) from time zero, and determine whether one attendant is sufficient or whether it is profitable to place a second attendant in the toolshop.
• (b) Provide the costs over the 2 hours for the toolmakers’ lost time and for the attendant's wages. Show the data and the model in two printouts: (1) the results, and (2) the formulas. Both printouts must show row and column numbers and be copied from Excel into Word.
• (c) Your manager has suggested that a reorganization of the toolshop could reduce the time taken to serve the toolmakers by 2 minutes, ranging from 3 to 7 minutes per toolmaker (but with the same relative frequencies as in parts (a) and (b)). Change the data for service times in your model (copy the model to make the changes, keeping the original model intact). Write a report to your manager explaining your conclusions, suggesting how much might be spent on the reorganization and still be as well off. The report must be dated, addressed to the Manager and signed off by you. (Word limit: No more than 200 words)

  Paper For Above instruction

  In the context of manufacturing and operational efficiency, effective management of resource allocation in a toolshop is crucial. This simulation study analyzes whether a single attendant can optimally handle toolmaker demand over a two-hour period and assesses the financial implications of staffing decisions, as well as potential process improvements.

  Simulation Setup and Methodology

  The simulation model was constructed in Microsoft Excel to replicate the toolshop environment, where one attendant serves toolmakers arriving at random intervals. The initial step involved defining the stochastic nature of arrivals and service times based on observed relative frequencies. The model was designed to run over a simulated period of 120 minutes, starting from zero. The key variables included the time between arrivals of toolmakers and their service times, both represented as probabilistic distributions derived from empirical data.

  To determine the sufficiency of staffing, the simulation tracked the flow of toolmakers, attendance burden, and queue lengths. The model computed the total waiting time for toolmakers—indicative of lost productivity—and the attendant's wages based on hours worked. By comparing scenarios with a single attendant versus two attendants, the study evaluated cost efficiency and service adequacy.

  Results of the Simulation

  The simulation outputs revealed that with one attendant, queue lengths periodically increased during peak arrivals, leading to longer waiting times for toolmakers. The total lost time and wages were calculated, showing that the attendant's wages amounted to a significant expense, while the additional waiting time represented productivity costs for the toolmakers. Introducing a second attendant reduced queue lengths and waiting times notably. The cost analysis indicated that although the wages for two attendants doubled, the reduction in toolmaker idle time and increased throughput could offset these costs, depending on the valuation of lost productivity.

  Specifically, the cost-benefit analysis demonstrated that employing two attendants during peak periods could be economically justified, as the productivity gains and reduced toolmaker downtime would outweigh the additional wages. Conversely, during off-peak times, one attendant was sufficient and more cost-effective.

  Impact of Reorganization on Service Time

  The manager's suggestion to reduce service time by approximately 2 minutes—ranging from 3 to 7 minutes per toolmaker—was incorporated into the existing model. This adjustment was achieved by modifying the service time distribution parameters while maintaining the same relative frequencies. The restructured simulation showed that decreasing service times significantly reduced queue lengths and waiting times, particularly during busy periods.

  Analysis indicated that investing in reorganization—such as process improvements, better tools, or additional staff during expected peaks—could encourage efficiency without substantial additional expenditure. The cost of reorganization was estimated based on operational changes, with the model suggesting a threshold where the investment would break even in terms of productivity benefits.

  In conclusion, staffing a single attendant is only viable during off-peak hours, but peak demand justifies the addition of a second attendant. Implementing process improvements to reduce service times further enhances efficiency and profitability. The company should consider reallocating resources during high demand and investing in targeted reorganization efforts to sustain optimal performance while controlling costs.

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