Littlefield Lab

Topics: Contract, Money, Profit Pages: 3 (826 words) Published: October 14, 2014
LITTLEFIELD LABS ANALYSIS

Global Strategy
Since the beginning the team decided to try an aggressive strategy to win the game, assuming a riskier position with higher potential benefits and costs. For that, it was necessary to identify key parameters of the process and design a dashboard to analyze the information and make decisions in a faster way. The key parameters we started monitoring were demand (jobs accepted), stations utilization and lead times of the entire process. The first goal was to balance the line and satisfying the demand.

Demand analysis and its relation to order kits
In order to predict the future flows of the demand and match the info with the kit orders we create a model in attempting to avoid stock breaks or overstocks and anticipate the purchase of machines. The model considered the median demand of last 2 weeks projected with the growth rate of those weeks.

Utilization of stations and its relation to purchase machines In order to to satisfy the demand, generate equilibrium in the capacity of the 3 stations, and avoid bottlenecks to get the maximum profit with the contract 3, the purchasing of new machines were made when utilization of any station was steadely over 80% and was justified by the cost-benefit analysis.

Cost-benefit analysis to purchase machines
Considering a demand of 30, 60 & 90, the pay back time will be 29, 15 & 10 days on ideal conditions. Changing the contracts
When the balance was achieved on the process, then we started to intervene contracts since contract 3 provides the best profitability when the Lab is able to accomplish a promised lead time of 0.5 days being careful of change to contract 2 or 1 if the promised lead time would not be accomplished due to the circumstantial conditions of the process. To optimize the profitability of the jobs received on the first day of every week, we began to modify the contracts according to the following criteria: - Contract 1: If machine 1 had more than 3 jobs...
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