Kendall crab and lobster

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BERTSIMAS - FREUND
CASE MODULES
KENDALL CRAB AND LOBSTER, INC.
I
It was shortly before noon. Jeff Daniels, director of Overnight Delivery Operations at
Kendall Crab and Lobsters, Inc. (KCL) in Kendall Square, Cambridge, Mass.,
anxiously watched the Weather Channel on his office television. A fall storm was
rapidly moving alongthat Atlantic coast toward Boston. If thestorm front continued
to move north at its current speed, the storm would hit Boston at around 5 P.M.
However, many such storms change direction and move out to sea before they reach
Boston, leaving Boston with only minor precipitation. The weather forecaster
predicted a 50% chance that the storm would hit Boston (at around 5 P.M.), and a
50% chance that the storm would move out to sea andmiss Boston and the rest of
the northern Atlantic states. Jeff Daniels was not the only employee in Kendall
Square watching the Weather Channel so attentively. Because there was a chance
that Boston's Logan International Airport might have to shut down operations if the
storm hit, many business travelers were nervously awaiting further weather
information as well. Historically, whenstorms of this magnitude hit Boston, one in
fíve are accompanied by severely strong winds that force Logan to close down its
operations almost immediately.
Kendall Crab and Lobster, Inc.
Kendall Crab and Lobster, Inc. (KCL) was founded in Cambridge, Massachusetts, in
1962, as a cab and lobster wholesale and delivery company for the Boston area. By
1985, KCL had largely eliminated its crabbusiness and had expanded its operations
to include on-demand overnight delivery of lobsters to restaurants, caterers, and
consumers in the Northeastern United States, with customers from Washington, D.C.
1:0 Presque Isle, Maine. By 1998, KCL's annual sales had reached $22 million. KCL
attributed its success to great customer service, focused direct-mail marketing and
advertising of itsproduct, and the enormous popularity of lobster as a menu item
for special occasions. KCL knew that customer service was critical for the success of
any business in the food service sector of the economy, and maintaining an excellent
reputation for customer service has always been a very high priority.
leff Daniels had worked for KCL part-time while a student at the Sloan School ofManagement at MIT, and had joined KCL's staff full-time after graduation. He rose
quickly through the organization to his current position as director of Overnight
Delivery Operations, which has been the cornpany's most profitable department. He
knew that the senior management were keeping an eye on him, and he had his mind
set on becoming a senior vice-president in the next year.

LobsterLobster is a very popular menu item. This popularity stems from its exquisitely rich
taste as well as its striking appearance, which decorates any dínning table
beautifully. People typically díne on lobster to celebrate a special occasion, and the
experíence of eatíng lobster is fun and excíting. Furthermore, lobster is extremely
simple to cook: One simple places the live lobster in a potof boiling water for 15
minutes, and it is ready to eat!
However, lobster is so perishable that it must be cooked live. After death, an
uncooked lobster's meat rapidly deteriorates. For this reason, lobsters must always
be transport by packing the lobster in a corrugated box with an insulating foam
insert, and covering the lobster with frozen non-toxic gel packs inside the insulatingfoam. A lobster can live in this special box for 36 to 48 hours. It is always necessary
to transport lobster by overnight air or truck delivery to ensure that is delivered live
to its recipient.
Overnight Delivery Operations
Customers can order lobsters for next-day delivery any time prior to 5 P.M. on the
day before delivery. A typical day's orders amount to approximately 3,000...
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