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Littlefield Simulation

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ev ev Littlefield Simulation Report: Team A
Ending Cash Balance: $1,915,226 (6th Place)
Return On Investment: 549%
ROI=Final Cash-Day 50 Cash-PP&E ExpenditurePP&E Expenditure→ 1,915,226-97,649-280,000280,000=549%

Analysis of the First 50 Days
The Littlefield Technologies management group hired Team A consulting firm to help analyze and improve the operational efficiency of their Digital Satellite Systems receivers manufacturing facility. Upon the preliminary meeting with Littlefield management, Team A were presented with all pertinent data from the first 50 days of operations within the facility in order for the firm to analyze and develop an operational strategy to increase Littlefield’s throughput and ultimately profits.
Figure 1: Day 1-50 Demand and Linear Regression Model
Figure 1: Day 1-50 Demand and Linear Regression Model With little time to waste, Team A began by analyzing demand over the first 50 days of operations in order to create a linear regression model to predict demand into the future in order to make critical operational decisions; refer to Figure 1. In Littlefield, total operational costs are comprised of raw material costs, ordering costs and holding costs. Raw material costs are fixed, therefore the only way to improve the facility’s financial performance without changing contracts is to reduce ordering and holding costs. As such, the first decision to be made involved inventory management and raw material ordering. Inventory management is critical to Littlefield’s bottom line and as such Team A decided to employ the Economic Order Quantity (EOQ) model to determine the raw material ordering quantity that minimized the cost of ordering and holding inventory. The EOQ model was determined to be the appropriate means of calculating the optimal raw material ordering quantity as Littlefield management indicated that both

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