Derivcos

The Derivcos Entertainment Company is a video game production company that specializes in educational video games for kids.

The company’s R&D department is always looking for great ideas for new games.

On average, the R&D department generates about 25 new ideas a week.

To go from idea to approved product, the idea must pass through the following stages:

Paper screening (a 1–‐page document describing the idea and giving a rough sketch of

The design), prototype development, testing, and a focus group.

At the end of each stage, successful ideas enter the next stage.

All other ideas are dropped. The following chart depicts this process, and the probability of succeeding at each stage.

The paper screening for each idea takes 2 hours of a staff member’s time. After that, there is a stage of designing and producing a prototype. A designer spends 4 hours designing the game in a computer–‐aided–‐design (CAD) package. The actual creation of the mock–‐up is outsourced to one of many suppliers with essentially limitless capacity. It takes 4 days to get the prototype programmed, and multiple prototypes can be created simultaneously. A staff member of the testing team needs 2 days to test an idea. Running the focus group takes 2 hours of a staff member’s time per idea, and only one game is tested in each focus group. Finally, the management team meets for 3 hours per idea to decide if the game should go into

production.

Available working hours for each staff member are 8 hours per day, 5 days a week.

The current staffing plan is as follows:

A.      Paper screening: 3 staff members.

B.Design and Production: 4 staff members.

C. Testing: 6 staff members.

D. Focus Group: 1 staff member.

E. Final Decision: 1 management team.

A1.

How many new ideas would Gamer Co. approve for production per week if it had unlimited capacity (staff) in its R&D process?

A2.

Which stage is the bottleneck according to the current staffing plan?

A3.

With the current staffing plan, how many new ideas will be put into production per week?