Questions to: Dr. Daniel Xing – [email protected]
ASSIGNMENT
The University of Liverpool Management School
2022 – 2023
(Semester 1)
EBUS504 (Postgraduates)
Operations Modelling and Simulation
DEADLINE: 12:00 PM (noon) August 7th, 2023
Lateness Penalty: Five percentage points shall be deducted from the assessment mark for
each working day after the due date up to a maximum of five working days; however, the
mark will not be reduced below the pass mark for the assessment (50%). Work assessed at
below 40% will not be penalised for late submission of up to five working days. Work received
more than five working days after the submission deadline will receive a mark of zero.
Cheating: You are encouraged to discuss your general understanding of the exercise with
colleagues of other groups, but, you must write up your project report based on the work
done by yourself only. University regulations about cheating – especially COLLUSION and
PLAGIARISM (copy from sources without acknowledgement) – apply.
Hand-in procedure: Hand your work electronically by submitting a copy through the TurnItin
link on VITAL. If your work is late for medical or other good cause, attach a copy of your
certificate and/or explanation.
Notes:
You must submit:
● One electronic copy (doc, docx or PDF) through CANVAS
(EBUS504_SMITH_20091234.doc)
● an electronic copy of the Witness, and Vensim developed through on CANVAS (all in
one zip or rar file with your name and ID as filename e.g.
EBUS504_SMITH_20091234.zip)
Questions to: Dr. Daniel Xing – [email protected]
1. Practical questions: Operations modelling (60 Marks)
Company ABC is a manufacturer of three products. Table 1 below describes the production details for
each of the products respectively.
Table 1. Production information
In addition, every new arrival material A batch (i.e. lot size is 2) will be split to one for Product
I and one for Product II. Company ABC has 2 M1, 3 M2, 1 M3 and 2 M4 in total. 2 operators
are hired to be responsible for all set-up activities and M1 is the machine with highest priority.
Considering this information, perform the following activities:
a. If only Product I&II are being produced, build up the Gantt chart for the current process described
in table 1 and identify the bottleneck of the overall production process. Your Gantt chart needs to be
properly represented with reaching a steady state and how the bottleneck is identified needs to be
elaborately explained. (25 marks)
b. Regarding above information, what is the best buffer configuration that takes the least amount of
buffers but encounters the least material flow disruptions. Your analysis needs to be explained in
detail with support of modelling results. (15 marks)
c. If the prices for Product I, II, & III are £20, £18, and £23 respectively, how would you plan your
production in 10,000 minutes to reach the maximal sales revenue? You cannot change any
parameter for all the entities but only can make decisions on how many numbers of Product I, II and
Inter arrival time Arrival lot size
Raw material A 2 2
Raw material B 10 5
Product I Sequence M1 M2 M4
Setup time 0 2 2
Production time 4 2 6
Input material 1 pc A 1 pc B 2 pcs A + 1 pc B
Product II Sequence M2 M3 M4
Setup time 3 0 1
Production time 5 2 4
Input material 1 pc B 1 pc A 2 pcs B + 1 pc A
Product III Sequence M2 M3
Setup time 2 1
Production time 2 4
Input material 1 pc B 1 pc B
Input
Processing
Questions to: Dr. Daniel Xing – [email protected]
III are going to be produced and how they are scheduled. Your solution should be supported with
rich explanations and analyses. (20 marks)
2. Practical questions: System Dynamics (40 Marks)
An e-commerce warehouse wants to manage its inventory for an item using system dynamics. The
item has sales and procurement rates which are well known. Warehouse manager believes that
system dynamics might help them plan inventory levels. It is very well known that if there is no
inventory, there can be no sales. In other words, items are sold from inventory. It is also known that
if there is no item procurement, there is no item inventory. Each item first goes into inventory once
they arrive.
Warehouse manager knows item procurement rate. Item procurement rate positively impacts
procurement (i.e. number of items procured). Warehouse manager also knows item sales rate. Sales
rate positively impact sales (i.e. number of items sold). The procurement (i.e. number of items
produced) is (=procurement rate*inventory level). The sales (i.e. number of items sold) is (=sales
rate*inventory level).
a) Draw the Causal-loop diagram, put the sign (positive or negative) for the whole model and write
equations for variables. (10 Marks).
b) Assume that the procurement rate is 0.05 items per month, while sales rate is 0.03 items per month.
And warehouse has an initial inventory level of 1000 items. (15 Marks).
– Establish complete model on Vensim and report model as screenshot in the report. Run this model
on Vensim for 100 months with time step of 0.25.
– Discuss results for inventory level and show graphs of results.
– What is the probability that inventory level will go below 500 items?
– Make recommendations to the warehouse.
c) Now assume that the item is a perishable item. If you are asked to solve this problem for a perishable
item, what would change in your model and in your parameters? Critically discuss this new setting.
(15 Marks).