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Little Field Case 2
Little Field Case 2
COLLEGE
Littlefields management would like to be able to charge the higher prices that customers would
be willing to pay for dramatically shorter lead times. However, management has found that
This case note was written by Samuel C. Wood and Sunil Kumar, assistant professors at the Stanford University
Graduate School of Business. Minor edits were made in 2005-2006 by Gregory Heim, Assistant Professor, Boston
College, for use at Boston College.
historic lead times during the first 50 days of production often extend into several days, and so
they have been unwilling to quote the shorter lead times to customers.
price = $750; quoted lead time = 7 days; maximum lead time = 14 days. (This is the
contract that the factory starts with.)
price = $1000; quoted lead time = 1 day; maximum lead time = 3 days.
price = $2000; quoted lead time = 0.5 days; maximum lead time = 1 day.
As before, when an orders lead time exceeds the lead time quoted to customers, then the
revenue for that order decreases linearly, from the prices above for the quoted lead time to $0 for
the maximum lead time. A pricing contract is assigned to an order as soon as the order arrives at
the factory, and that contract cannot be changed subsequently for that order. Pricing contracts for
future orders can be changed by clicking on the Edit Data button within the Customer Order
icons popup window.
You will also notice a few days where zero jobs are completed by the factory. On such days, the
daily average lead time and daily average revenues are meaningless, so a value of zero will
appear in the plots and downloaded data on those days.
Finally, as before, you are also allowed to buy and sell machines and to change the scheduling
rule at the tester (Station 2).
Assignment
The factory has been running for 50 simulated days. Littlefields management has recalled the
high-powered operations team (your team) to manage the capacity, scheduling, purchasing, lot
sizing, and contract quotations. Your teams objective is to maximize the cash generated by the
factory over the new products lifetime. Management is not providing any operating budget
beyond the cash generated by the factory itself. You will have control of the factory from day 50
to day 218. At 1 hour per simulated day, this translates to seven real days. At day 218, you lose
control of the factory, and the simulation will quickly run another 50 days of simulation. When
you lose control of the factory, management expects you to leave the factory parameters set to
maximize the factorys cash position when the factory shuts down on day 268. After the
simulation ends on day 268, you can check the status of your factory, but the factory will no
longer be running.
You will be allowed into the factory to analyze data starting Tuesday, March 28 at 5 p.m. The
Littlefield Technologies factory will be turned over to your capable hands at on Friday, March
31 at 12:00 noon. You can use your teams knowledge of inventory management, forecasting,
capacity management, and other concepts and tools from your textbook, to help LT managers
maximize their profit. Your access to the Littlefield factory will terminate one week later on
Friday, April 7 at 12:00 noon.
Team Deliverable
Your team should turn in one summary of what actions you took during the week you had access
to the factory, why you took those actions, and in retrospect whether you think you did the right
thing. Show analysis to justify your conclusions.
The top-performing team from each class will be invited to present their inventory management
approach during a subsequent class session.
Report Guidelines
Your report should be single-spaced, and should be written as a memo to the managers of
Littlefield Technologies. Your summary should be about 2-3 pages in length. A structure for a
good report will include the following sections:
Introduction
Problem Statement
Recommendations/Actions Taken
o This section may include data analysis, equations, etc.
Resulting Outcomes
Evaluation of Outcomes
Appendix (optional, but highly recommended)*
o Up to 2 pages of data analysis, equations, etc.
*You are allowed to include an appendix (up to two additional pages) that presents any data
analysis you perform during your control of the factory.
Grading
Your teams grade will be based on the content of your report. The top performing team in each
class will receive 10 points extra credit added to their case score, which includes credit for their
class presentation. The second and third best performing teams in each class will receive 4 and 2
points extra credit added to their case score, respectively.
Grading on your written report will be at the instructors discretion. Note that insightful, in-depth
analyses of why your team did or did not do well can bring up your grade, regardless of your
actual simulation performance.
Helpful Resources
Graduate assistant Kevin Phillips will hold office hours in Fulton 413 on Tuesday, March 28
(9:00 a.m. until 3:00 p.m.), on Thursday, March 30 (9:00 a.m. until 12:00 noon), and on Friday,
March 31 (9:00 a.m. until 2:00 p.m.). Teams and/or team leaders will be able to ask Kevin
questions about using the Littlefield Technologies online website, how to log into it, how to
buy/sell machines, how to change inventory policies, how to download data to Excel, and any
other question related to the Littlefield Technologies website. Kevin will not answer any
questions about how to solve the case he doesnt know the answer.