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[pic] |BOSTON
COLLEGE |CARROLL SCHOOL OF MANAGEMENT

OPERATIONS & STRATEGIC MANAGEMENT | |

Managing Customer Responsiveness at Littlefield Technologies – Spring 2007(

Background

It is now nine months later, and Littlefield Technologies has developed another DSS product. This product also is expected to have a 268-day lifetime. Littlefield once again has contracted with your operations management consulting team to manage their operations for this new product.

Management Strategy

Littlefield’s management would like to be able to charge the premium prices that customers would be willing to pay for dramatically shorter lead times. However, management has found that historic lead times[1] 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. They want your team to look into why this is occurring, and hopefully remedy the situation.

Customer Demand

Based on initial management analyses, customer demand for this new product is expected to be random, but the average demand will be level over the product’s 268-day lifetime. Pre-production market research suggested that the average daily demand level would be somewhere between 10 orders/day and 14 orders/day. Closer to Day 50, shop floor space constraints are limiting the number of jobs being accepted into the factory. Management is concerned about this outcome.

At the end of this product’s lifetime, demand will end abruptly and factory operations will be terminated.

Process Flow and Technology

The new DSS product is manufactured using the same process flow as the first product – the processing sequence has not changed. To set up the new process, Littlefield bought new machines. The machines at each station again cost $100,000 per machine, with $10,000 recouped when they are sold after being

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