Kristen Cookies - Giovani Da Silveira

Question 1: How long does it take to fill a rush order?

First: Draw Process Flow Diagram with Processing Times

You

Mate [

Oven

WASH BOW AND

MIX INGR (6)

UNLOAD AND
COOL (5)

SPOON
INTO TRAIN (2)

PACK
(2)

PUT IN
OVEN (1)

HOLD

BAKE
(9)

RECEIVE
PAYMENT (1)

] Mate

] Mate

Second: Calculate Throughput Time = Sum of all processing times

TT = 6 + 2 + 1 + 9 + 5 + 2 + 1 = 26 minutes
Answer: It will take 26 minutes to fill a rush order
Question 2: How many orders can you fill if you are open 4 hours?
First: Find Bottleneck and Cycle Time
Since different stages of the process can process different orders in parallel, the
throughput time is not the relevant time to calculate capacity.
The capacity of the process as a whole equals the capacity of the slowest operation. This
is called bottleneck.
The bottleneck is in the oven: prepare + baking = 10 minutes. This is the cycle time.
Second: Calculate Process Capacity
1

 The oven capacity is 6 trays/hour. Since we work 4 hours, the process capacity = 4 X 6
= 24 trays/day, assuming that the first 8 minutes before baking and the last 8 minutes
after baking are carried out during closing time.
Otherwise, the real capacity would be 3,73 hours X 6 trays/hour = 22.4 trays. 3,73 hours
= {[(60 X 4) - 8 minutes] / 60}

Question 3: How much of your and your mates time will it take to fill each order?
First: Calculate Labor Time
You: 6 minutes (wash and mix) + 2 minutes (spoon) = 8 minutes
Mate: 1 minute (prepare oven) + 2 minutes (pack) + 1 minute (payment) = 4 minutes
Assumptions:

* Capacity is 100% occupied

* Each order equals 1 tray
(if one order = 3 trays, the first operation counts only once)

Second: Calculate Idle Time (If you work 8 minutes per order and your mate works 4
minutes per order, how long have you two got for studying?)
Cycle Time = Oven Time, i.e. the time taken for completing each new order = 10 minutes
Idle Time = Cycle Time - Labor Time = 2 minutes (you) and 6 minutes (mate)
Question 4: Should you give discount for 2 or 3 dozen-cookie orders? Will it take
any longer to fill 2 dozen than 1 dozen cookie orders?
First: Calculate Production Cost
Production Cost = Material Cost + Labor Cost
Material Cost = $ 0.60 (ingredients) + $ 0.10 (box) = $ 0.70 / dozen
Labor Cost: How much labor time it takes to fill a 1-dozen and a 2-dozen order?
Activity

Type

Time

Wash and Mix

(you)

Setup

6 Minutes

Spoon (you)

Operation

2 Minutes

Put in oven (mate)

Operation

1 Minute

Pack (mate)

Operation

2 Minutes

Setup

1 Minute

Payment (mate)

 So, for 1 dozen, we have to count all the activities once, that is 12 minutes labor time.
For 2 dozens, we should count the set-up activities only once, and the operations activities
twice, that is 7 (setup) + 5 (operation) + 5 (operation) = 17 minutes.
For 3 dozens, the time would be 22 minutes.
For 4-6 dozens, we need to repeat the wash and mix, since the mixing bowl can only
hold material for up to 3 dozens.
Assuming we charge $ 0.20 / minute to labor cost,
Cost 1 dozen = $ 0.70 (material) + ($ 0.20 * 12) = $ 3.10
Cost 2 dozens = $ 1.40 + ($ 0.20 * 17) = $ 4.80
Cost 3 dozens = $ 2.10 + ($ 0.20 * 22) = $ 6.50
Attention: we are assuming we should not pay for labor idle time; they should be doing
some other productive work, e.g. studying!

Gantt Chart
Look at the Gantt Chart. How long does it take to fill a 1-dozen and a 2-dozen order?
Answer: 26 and 36 minutes.
Where does the difference come from? Why is it 10 minutes only rather than 26 minutes?
The difference is in the oven time (bottleneck). The difference is only 10 minutes
because mixing and paying takes the same time for 2-dozens, while spooning,
cooling and packing can be performed while the oven is still operating.
Could you run the operation alone?
Only with 2 or more-dozen orders. Not with 1-dozen orders.
Remember the cycle time and labor time for 1 and 2-dozen orders:

Order
Size
1 dozen +
1 dozen
2 dozens

Cycle Time

Labor Time

20 minutes
24 minutes (2 x 12; 7 minutes for mix
(2 x 10 at oven) and pay, 5 minutes for spoon, prepare
oven and pack)
20 minutes
17 minutes (mix and pay occurs only
(1 x 20 at oven) once; we have 7 + 5 + 5 minutes)

 If you worked alone, with 1-tray orders you would be the bottleneck. You would
only deliver 1 dozen each 12 minutes. Capacity would fall from 6 dozens/hour to 5
dozens/hour.
In terms of money, you could save 4 minutes of your mates time. This is $ 0.20 x
4 = $ 0.80/tray. Whether this is a good idea, depends on how much you charge for
the cookies, remembering that the cost of 1 dozen is $ 3.10.
For example, assume the price for one dozen was $ 3.50. In the present situation,
income in one hour would be $ 3.50 x 6 = $ 21.00. Profit would be $ 0.40 x 6 = $
2.40. Working alone, income in one hour would be $ 3.50 x 5 = $ 17.50. Profit
would be $ 1.20 x 5 = 6.00. So, it would be much better working alone.
To find the price at which it is better working with your mate we need to find the
value of P (price) at which (P 3.10) x 6 > (P 2.30) x 5, i.e. profit in the first
situation (working with mate) is greater than profit in the second situation
(working alone). Thus, P must be > 7.10 to justify working with mate.

Question 5: How many food processors and baking trays will you need?
Look at the Gantt Chart. Since baking is the bottleneck, you need only one food
processor. However, you will need more than one tray, assuming that the cookies will be
on trays during the spool (raw cookies) and cool (baked cookies) stages. Hence, you will
need at least three baking trays.

Question 6: What improvements can be suggested to improve quality, cost, or

speed?
The first and most obvious suggestion is to buy or rent a new oven, which is also capable
of holding one tray at a time. Thus, baking capacity would increase from 6 to 12
trays/hour.
If we double the oven capacity, what happens to the system capacity?
If we look at the individual capacities, we will discover that the bottleneck will transfer
from the oven to the mix and spoon stage. Therefore, system capacity will increase to 7.5
trays per hour, assuming orders of 1dozen.
Operation
Mix and
Spoon
Oven
Cool
Pack
Payment

Time

Capacity/hour

8 minutes

7.5 trays

10 / 2 = 5 minutes
5 minutes
2 minutes
1 minute

12 trays
12 trays
30 trays
60 trays

 If we have 2-dozen orders, mix and spoon would take 10 minutes for a 2-dozen (mix is
performed only once). Therefore, system capacity would increase to 12 trays-hour.
For 3-dozen orders, mix and spoon will take 12 minutes (i.e. 4 minutes for each tray).
Bottleneck would be oven and cooling; system capacity would stay in 12 trays-hour.
Therefore, system capacity depends on the size of individual orders.

Further Questions
1. How can you define the operations strategy in terms of quality, flexibility/customization,
cost, dependability, and speed? What is the importance of these different objectives?
2. How is the performance of these objectives now?
3. What trade-offs can we identify between these objectives in the case?
4. How these following changes would affect the performance of those objectives?
4.1. Building inventories of finished products;
4.2. Building inventories of work-in-process, not yet customized products;
4.3. Selling only standard products (e.g. chocolate cookies);
4.4. Improving the process technology;
4.5. Hiring a third person;
4.6. Working along, i.e. dismissing your mate.
5. What of these changes would you advocate?
6. What other improvements can you suggest?