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OPERATIONS MANAGEMENT 1
‘A C A S E S T U D Y A N D A N A L Y S IS
K R IS T E N ’S C O O K IE C O M P A N Y
AIM
SUBMITTED BY :
ADREENA LIKHAN
CHOTON ROY
MANALI BHAGAWATI
MOMI BORAH
NIJARA DAS
INTRODUCTION
Two students are planning to start a cookie business with the name Kirsten's Cookie
Company in their on-campus apartment to cater to starving students late at night within the
campus. The objective is to provide fresh baked cookies which are customised to the needs
of the buyers. The entire process includes -
EQUIPMENTS : 1 Oven, 1 Food Processor( mixing bowl), Cookie trays and Spoons.
PRODUCTION PROCESS :
• Add ingredients as per requirement
• Mix ingredients
• Spoon out the cookie dough into the tray
• Put the tray inside the oven
• Let it bake
• Take it out of the oven
• Let it cool
• Take the cookies out of the tray
• Pack it for delivery
COST :
Variable cost includes - cost of ingredients (Rs.60/dozen)
cost of packing box (Rs.10/each)
Cost of electricity is taken care of by the landlord of the apartment
DELIVERY
Mixing Ingredients
*
Ingredients check
*
Dish up cookies 2
*
Take cookies in the -- --
oven *
Put cookies in the -- --
oven *
Set up thermostat & -- 1
timer *
Backing the cookies -- 9
*
Remove from oven --
*
Inspection of --
cookies
*
Keep to cool down -- 5
*
Packaging the -- 2
*
ASSAM INSTITUTE OF MANAGEMENT
PRODUCTION AND
OPERATIONS MANAGEMENT 1
cookies
Accepting the
payment * -- 1
Delivery
* --
Total 26
Oven Set up 1 9
Baking Oven 9 18
Cooling 5 23
Packaging 2 25
Collecting Money 1 26
= 26 MINUTES
The resources required for different orders would be different depending on the type of
orders. Therefore two orders can be prepared simultaneously which would minimize the
time required for the second order. It would no more require twice as much as time as for
the first order. It can be done in the following way:
Time taken for preparation of a single order can be divided into 3 parts:
Therefore if someone can get the tray ready for the second order while the first order is in
the oven for baking, it would save 8 minutes of time for the subsequent orders. Because
when the first order is already in process in baking, the pre baking session for the second
order will take place for 8 minutes, thus these 8 minutes have been saved. But it has to
undergo both baking and post-baking sessions taking 18 (10+8) minutes.
Therefore total time required for the second order while the first order is in progress
=(18 – 8)
=10 minutes
In fact subsequent orders will take 10 minutes each for preparation. Therefore time taken
for the preparation of ' additional x' orders of 1 dozen would be:
(26 + 10x) minutes
Thus if business is carried out for maximum of 4 hours (i.e. 240 minutes) the maximum no.
of orders Kirsten Cookies can take in 1 day would be:
X = 1 + [(240-26) ÷ 10]
= 1 + 21 (approx.)
= 22 (approx.)
Total price in 1 day for maximum 22 orders (72 x 22) = Rs. 1584
Total cost in 1 day for maximum 22 orders (70 x 22) = Rs. 1540
Here it can be stated that price of Rs.72 for 1 dozen cookies would be a bit higher for the
students as customers. So, minimizing the cost and price should be the objective of the
business for a stable growth.
1. Capacity constraints: They have only one OVEN, the number of which cannot be
increased as there is not enough space for accommodation as well as their Budget is
limited.
2. Budget: As they are students, their budget is limited. They cannot afford to buy new
equipment for their business and also cannot afford any extra expenditure.
3. Price : As the business is Made-to-order making cookies fresh and hot, they cannot
compromise on the quality and price cannot be increased ABNORMALLY as the
customers are basically students from the campus.
RECOMMENDATION
Cost Reduction:
• Firstly it would be more feasible to buy Brown Paper Packets which cost only
Rs.2/each, instead of cookie boxes which cost a sum of Rs.10/each. This
would reduce our cost by Rs.8.
• The Brown paper packets should be of a standard size which can carry upto a
dozen cookies each.
Time Reduction:
• The actual dishing up time for the cookie tray was 2 mins, which can be
reduced to 1 min by efficiency of work.
• The packaging time can also be reduced from 2 min to 1 min because it
takes lesser time to pack it in a paper packet rather than a box.
Total price in 1 day for maximum 22 orders (65 x 22) = Rs. 1430
Total cost in 1 day for maximum 22 orders (62 x 22) = Rs. 1364
As they are saving 2 min in both the above process, therefore they are getting a total of 44
min extra in a day for maximum 22 orders.
Therefore they can utilize these 44 extra min in producing 4 more orders. Therefore
maximum number of orders that can be taken in a day becomes = 22+4 = 26 orders
CONCLUSION
Thus by reducing the material cost and time we can state that this business would be
profitable to carry on. And also they can attract more students to buy their cookies as the
price of cookies will be reduced to Rs.65.
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