Drum‑Buffer‑Rope Tuner — Balance flow, not capacity

💡 Goal: Optimize profit or cost while maintaining service.
Instructor notes
  • Shift the objective from “minimize cost” to “maximize profit = Revenue − (WIP + Lost‑sales costs).”
  • Discuss when raising buffers increases profit (prevents pricey stockouts) vs when it just adds carrying cost.
  • Ask: should we pace release to **BN** or to **market demand** when price (revenue/unit) is very high?
Bottleneck out Downstream out (C2) Buffer level (pre‑BN) Q2 level (BN→C2) Release in Demand

Avg Throughput

Avg WIP (buf1+Q2)

Service Level

Avg Lead Time*

Total Cost (H)

Cost / Hr

Total Revenue (H)

Profit / Hr

*Approx Little’s Law: Lead ≈ WIP / Throughput.

What’s happening under the hood?
  • The rope releases work at the chosen rate with random noise based on variability.
  • Work waits in the buffer; the drum (bottleneck) pulls up to its capacity each tick.
  • Output from BN flows into a finite Q2 before the downstream station C2. If Q2 is full, BN is blocked.
  • Demand is compared to shipped units to compute service level; excess demand counts as missed.
  • Costs & Profit: each tick adds WIP carrying cost and lost‑sales cost; revenue = shipped × price; profit = revenue − cost.