Push-Pull Simulation (Harvard Business Publishing)

Question 1

1. Alter Scenario 2, so that workstation I has a 25-minute set-up time (all others with 20 minute set-up times and batches of 5 units for each of the three models, and all workstations set to PUSH). Before you run it,

a. Where is the bottleneck?

b. At which workstation(s) do you expect the lowest capacity utilization?

c. Will the process be able to keep up with demand?

a) Yes

b) No

c) Can't tell from the information provided

d. Where, if anywhere, will work-in-process inventory (WIP, shown as a workstation's "raw material") build up?

Now run the exercise. When you have a sense of how the process works, click on the fast forward button to run the exercise to the end of the week. How do you explain the results? How would you now answer the questions above?

e. The cost of WIP shown in the performance results seem to be far too high given the WIP that you can see. Where is this "hidden" WIP?

Question 2

Now click on the "push" arrow on the upper right to change all workstations to PULL. Answer questions (a) - (c) as in question #1, and follow the same directions. What is different? Why?

a. Where is the bottleneck?

b. At which workstation(s) do you expect the lowest capacity utilization? Do you expect the average capacity utilization to be (a) higher than in question 1; (b) lower than in question 1; (c) the same as in question 1; or (d) need more information to be able to answer.

c. Will the process be able to keep up with demand?

a) Yes

b) No

c) Can't tell from the information provided

d. Run the exercise again, two or three times. What changes? Why?

Questions 3 and 4

3. Go back to the values of question 1 (all PUSH). If you could change one workstation to PULL, which would it be to reduce total inventory cost without incurring stock outs? Simulate to test out various options. (From here on, if you like, you can choose "Run to End" rather than "Simulate") Which is best? Why?

4. Now set workstations C, I, M, and P to PULL, and run the process again. What happens? Why? Why is the WIP inventory cost so much higher?