Professional Documents
Culture Documents
Kristen's Cookies (Handout)
Kristen's Cookies (Handout)
Examples of a Process
in Service Companies
Concepts
This case will familiarize you with the following concepts:
PROCESS FLOW DIAGRAM
THROUGHPUT TIME FOR AN ACTIVITY
THROUGHPUT TIME FOR THE PROCESS
CAPACITY OF AN ACTIVITY
CYCLE TIME OF AN ACTIVITY
BOTTLENECK
CAPACITY OF THE PROCESS
CYCLE TIME OF THE PROCESS
UTILIZATION OF A RESOURCE
GANTT CHART
PROCESS
INCREASING THE CAPACITY OF A PROCESS
Question 1
Assume that Kristens most important customer has just submitted an
order for one dozen cookies, and that she wants to give the highest
priority to this order. How long will it take to fill this order?
Question 2
Assuming that Kristens Cookie Company is open for four hours each
night, how many orders can be filled each night?
Question 2 (continued)
Assuming that Kristens Cookie Company is open for four hours each
night, how many orders can be filled each night?
Question 2 (continued)
Assuming that Kristens Cookie Company is open for four hours each
night, how many orders can be filled each night?
Question 2 (continued)
Assuming that Kristens Cookie Company is open for four hours each
night, how many orders can be filled each night?
NOTE: The process completes its first dozen after 26 minutes, and, thereafter, the process completes a
dozen every 10 minutes. That is, process completes a dozen at the following times:
26, 36, 46, 56, , 216, 226, 236
So, Kristens nightly capacity is actually __ dozen.
Question 3
During each night, what percentage of time will
Kristen be busy, and what percentage of time will
Kristens roommate be busy?
Recall that the processs cycle time is 10 minutes.
KRISTEN
Mix
Spoon
ROOMMATE
Total
Busy Time
Within
=
Each
10-minute
Cycle
Kristen's Utilization =
8/10
Load
= 80%
Pack
Pay
Total
Busy Time
Within
=
Each
10-minute
Cycle
Roommate's Utilization =
4/10
= 40%
10
Question 3 (continued)
From the previous slide, we know that Kristen will
be idle 20% of the time, and her roommate will be
idle 60% of the time.
What can a worker do when he/she would
otherwise be idle?
11
Question 4
Assume that Kristen pays herself and her roommate $12 per hour.
If Kristen and her roommate are not paid for idle time, what is the minimum
amount Kristen should charge for one dozen cookies?
If Kristen and her roommate are paid regardless of whether they are busy or idle,
what is the minimum amount Kristen should charge for one dozen cookies?
From the previous slide,
recall that, in each 10minute cycle, Kristen and
her roommate work a
total of
8 + 4 =12 minutes
24 dozen
TOTAL
($0.20/min)(12 min) =
$0.70
$2.40
$3.10
$0.70
TOTAL
$0.70
$4.00
$4.70
12
Question 5
How many food processors and baking trays will Kristen need?
13
14
Question 6
What is the effect of adding a second oven?
If Kristen could lease a second oven, how could she compute the
maximum daily rate she would pay for the lease?
15
Question 6 (continued)
What is the effect of adding a second oven?
If Kristen could lease a second oven, how could she compute the
maximum daily rate she would pay for the lease?
The processs new bottleneck is Mix & Spoon.
The processs new hourly capacity is the new bottlenecks
hourly capacity 7.5 dozen per hour.
Question 6 (continued)
What is the effect of adding a second oven?
If Kristen could lease a second oven, how could she compute the
maximum daily rate she would pay for the lease?
With the acquisition of the second oven, the processs hourly
capacity increases from 6 to 7.5 dozen per hour.
So, the processs nightly (4 hour) capacity increases from 24
to 30 dozen per night an increase of 6 dozen per night.
17
Question 7
Besides adding a second oven, are there other
process improvements Kristen should consider?
Because Load & Bake is the bottleneck, only
adding a second oven can increase the processs
capacity.
However, improvements to a non-bottleneck activity
are worth considering.
Examples of an improvement to a non-bottleneck
activity:
18
Question 7 (continued)
Besides adding a second oven, are there other process
improvements Kristen should consider?
Even if a process improvement to a non-bottleneck activity
cannot increase the processs capacity, it can do one or more of
the following:
19
Question 8
Assuming there is only one oven, what would
happen if Kristen attempted to run her business
without her roommate?
There are two clues that, if Kristen attempted to
run her business without her roommate, the
processs capacity would decrease:
Clue #1:
20
Question 8 (continued)
Assuming there is only one oven, what would
happen if Kristen attempted to run her business
without her roommate?
Clue #2:
21
Question 8 (continued)
Assuming there is only one oven, what would happen if Kristen
attempted to run her business without her roommate?
As indicated by the Gantt Chart below, if Kristen must work alone,
the processs cycle time is 12 minutes, equivalent to an
hourly
capacity of 5 dozen (a decrease from 6 dozen.)
22
Summary of Concepts
PROCESS FLOW DIAGRAM. A diagram depicting the activities of a
process and the flows between them.
THROUGHPUT TIME FOR AN ACTIVITY. The time it takes to
perform an activity.
THROUGHPUT TIME FOR THE PROCESS. The total amount of
time a unit spends in the process from beginning to end, including
the time spent being actively work on at the activities of the process
as well as any time spent waiting between activities.
PROCESS. A collection of activities and resources that transforms
various inputs into more valuable outputs.
23
Summary of Concepts
(continued)
BOTTLENECK. The activity or resource that limits the capacity of the
overall process. The bottleneck is usually the activity with the
minimum capacity, but the bottleneck can sometimes be the labor
available at a particular activity or set of activities.
CAPACITY OF THE PROCESS. The maximum rate of output of the
process, measured in units of output per unit of time (e.g., 4 dozen
per hour).
CYCLE TIME OF AN ACTIVITY. The time that elapses between the
activitys completion of successive units, assuming the activity
operates continuously. (For example, if an activity has a capacity of 4
dozen per hour, then the activitys cycle time is 15 minutes.)
CAPACITY OF AN ACTIVITY. An activitys maximum rate of output,
measured in units of output per unit of time (e.g., 4 dozen per hour).
24
Summary of Concepts
(continued)
CYCLE TIME OF THE PROCESS. The time that elapses between
completion by the process of successive units, assuming the process
operates continuously. (For example, if a process has a capacity of 4
dozen per hour, then the cycle time of the process is 15 minutes.)
UTILIZATION OF A RESOURCE. The ratio of the time that the
resource is actually used to the time that the resource is available to
be used.
GANTT CHART. A chart that depicts for the process the times
during which each activity is being performed and during which each
resource is being utilized.
INCREASING THE CAPACITY OF A PROCESS. To increase the
capacity of a process, you must increase the capacity of the
bottleneck.
25