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Unformatted text preview: Stanford University Graduate School of Business rev. August 2004 Managing Customer Responsiveness at Littlefield Technologies Background Littlefield Technologies (LT) has developed another DSS product. The new product is manufactured using the same process as the product in the assignment Capacity Manage- ment at Littlefield Technologies neither the process sequence nor the process time dis- tributions at each tool have changed. On day 0, the factory began operations with three stuffers, one tester, and one tuner, and a raw materials inventory of 9600 kits. This left the factory with $1,000,000 in reserves. Customer demand continues to be random, but the long-run average demand will not change over the products 268-day lifetime. At the end of this lifetime, demand will end abruptly and factory operations will be terminated. At this point, all capacity and remaining inventory will be useless, and thus have no value. Management would like to charge the higher prices that customers would pay for dramati- cally shorter lead times. However, historic lead times often extend into several days, so management has been unwilling to quote the shorter lead times....
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