Littlefield Technologies Case Study

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Problem Statement
Littlefield Technologies is a firm that has developed Digital Satellite Systems (DSS) product that has a product life of 268 days. The company’s strategy is to produce the product as per order and when the company has enough cash to pay the suppliers. This means that the company only produces goods as soon as orders are made and when there is enough money to support the production. In order to make this strategy successful, the following criteria should be met:
• Raw materials inventory should be less than the reorder in point,
• There should be no open orders, and
• There should be enough cash to pay the suppliers.
Contracts are based on different pricing contracts that have different lead times with the short lead times …show more content…

In addition, on day 105, the reorder quantity was 13,200. This approach was effective as it increased the number of inventory kits available for production. In total, the company used $2,059,000 to increase its inventory levels. The increased inventory levels and the readjustments of reorder points enabled the factory to increase the number of jobs accepted each day as well as to reduce the number of jobs waiting for kits. In addition, there was a high number of kits queued at station one from day 80 which was accompanied by increased utilization of station one. Besides, we were able to reduce the lead time for all the orders and this enabled the company to increase its revenues.
However, there were days when utilization of station one was below maximum capacity mainly because there was no inventory. For instance, there was no inventory between days 76 and 78 and days 84 to 86. This meant that the company was losing revenues because the machines were functioning below capacity as there were not enough raw materials. If I could play the game again, I would further increase the reorder point and quantity to ensure that there was inventory at all

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