Capacity Management At Littlefield Technologies Case Study

932 Words 4 Pages
Register to read the introduction… However, in this assignment, you may split the incoming orders into smaller processing lots as they are released into the factory. Specifically, you may choose to release each order of 1 lot of 60 receivers, 2 lots of 30 receivers, 3 lots of 20 receivers, 5 lots of 12 receivers, or 10 lots of 6 receivers. Customers are willing to pay a premium for fast lead times, and you now have three pricing contracts to choose from: • 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 = 2 days. • price = $1250; quoted lead time = 0.5 days; maximum lead time = 1 day. A contract is assigned to an order as soon as it arrives at the factory, and that contract cannot be changed subsequently for that order. Contracts for future orders can be selected by clicking on “Edit Data” on the Customer Order icon. Once the market has matured on day 150, a bank is extending a line of credit to Littlefield Technologies at 20% annual interest compounded daily. In addition, a processing fee of 5% is incurred right after the loan is received. You can borrow and repay loans beginning on day 150 by clicking on “Cash” on the menu bar below the factory schematic, and then clicking on the appropriate button on the bottom of the resulting window. You are also allowed to buy and sell machines and change the scheduling rule at the …show more content…
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 386. At 1 hour per simulated day, this translates to 14 real days. At day 386, you lose control of the factory, and the simulation will quickly run another 100 days of simulation. When you lose control of the factory, management expects you to leave the factory parameters set to maximize the factory’ cash position when the factory shuts down on day 486. After the simulation s ends on day 486, you can check the status of your factory, but the factory will no longer be running. Team scores and ranking are based “cash balance,” which Littlefield Technologies defines as cash on hand minus debt. Your team should turn in one summary of what actions you took during the two weeks 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. Your team’ grade s will be partially based on your performance, but mainly based on your summary. The summary cannot exceed 4 pages in length, and no appendices are

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