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Kristin's Cookie Company Production Process and Analysis
Kristin's Cookie Company Production Process and Analysis
This presentation will evaluate the preliminary design for the Company’s
production process to make policy and pricing decisions, equipment
needed, how many orders can be accepted.
Case
Kristen and her roommate have planned the Kristen’s Cookie Company
(KCC) as a joint venture to create and operate a successful business
operated in a college campus apartment, with potential to grow in the
future. The core competency is providing made-to-order fresh cookies
after standard business operating hours.
Ingredient cost per dozen .60 dollar and box price .10 dollar ,They receive
order through e.mail,and steps involve to make the cookies are ;
Order and Reply (Roommate) 0 minutes
Wash and Mix (kristen) 6 minutes
Spooning 2 minutes
Heat Oven
1 minutes
Baking (Oven)
9 minutes
Hold
Cooling 5 minutes
Pack/Collect Money 3 minutes
Q#1. How long will it take to
fill a rush order?
It take a 26 min to fill a rush order
Q#2. How many orders can you fill in a night (4 hours)?
• All costs of ingredients and boxes for each dozen are the same. With that
said, total valuable time is 6 (wash and mix) + 2 (spooning) + 1 (set timer
on oven) + 2 (packing time) + 1 (process payment) = 12 minutes. For a
two dozen order, total time is 6 + 2 + 1 + 2 x 2 + 1 = 17 minutes. For a
three dozen order, total time is 6 + 2 + 1 + 2 x 3 + 1 = 22 minutes.
We can also solve this problem by calculating labor
costs
• Let’s assume $10 per hour
• = $0.16667 per minute
Wash,mix,spoon 6+2
total 8
Roommate
Activity Cycle time
Total 4
Question # 5
How many food processor and baking trays
will you need?
The food processor is idle for a long time
during the production process, so only one
is needed. Because the processor can only
contain 3 dozen of ingredients , during the
whole process, at least 3 trays are needed
Question#6
• Are there any changes you can make in your production plans
that will allow you to make better cookies or more cookies in
less time or at lower cost?
Load &
bake
Mix &
spoon Pack & pay
Cool
Load &
bake
Conti…..
• Bottleneck:
The bottleneck is the oven, which means there is no point in
looking at expanding the capacity of any other resource unless the
operations Baking capacity is expanded first.
Question#7
• What is the effect of adding another oven?
Ans: To decide how much we would be willing to pay for another oven
,we would have to do some complicated analysis including:
What the distribution of orders would look like.
How many for 1dozen,how many for 2 dozen….
Cont….
Present value analysis
Premixing in advance:
Eliminates the mixing steps for these cookies.
work_in_process inventory would eliminate mixing step for those cookies
and thus increase capacity to 12 dozen per hour.