Littlefield Laboratory Case Summary

Managing Customer Responsiveness at Littlefield Labs
Background
Littlefield Laboratories (LL) has opened another lab. The new lab uses the same process as the lab in the assignment “Capacity Management at Littlefield Labs” — neither the process sequence nor the process time distributions at each machine have changed. On day 0, the lab began operations with three preparers, one tester, and one centrifuge, and an inventory of 160 test kits. This left the lab with $1,000,000 in reserves. Customer demand continues to be random, but the long-run average demand will not change over the product’s 268-day lifetime. At the end of this lifetime, demand will end abruptly and lab operations will be terminated. At this point, all capacity and remaining inventory will
(This is the contract that the lab starts with). • price = $1000; quoted lead time = 1 day; maximum lead time = 3 days. • price = $1250; quoted lead time = 0.5 days; maximum lead time = 1 day. As before, if a customer order’s lead time exceeds the quoted lead time, 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 contract is assigned to a customer order as soon as it arrives at the lab, 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. You will also notice a few days where zero jobs are completed by the lab. 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. You are also allowed to buy and sell machines, change the scheduling rule at the tester, and change the lab’s maximum allowed number of jobs, called the WIP