Solution to Kristen's Cookie Company (A

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Before answering specific questions, it is useful to make a diagram of the overall process:
Order Entry Wash Bowl, Mix Ingredients Resource: Self Capacity: 3 Cycle Time: 6 minutes Fill Tray Resource: Roommate Capacity: 1 Cycle Time: 2 minutes

Start Oven Resource: Roommate, Oven Capacity: 1 Cycle Time: 1 minute

Bake Resource: Oven Capacity: 1 Cycle Time: 9 minutes

Cool Resource: none Capacity: 1 Cycle Time: 5 minutes

Remove Resource: Roommate Capacity: 1 Cycle Time: 0 minutes

Pack, Collect Money Resource: Roommate Capacity: 1 Cycle Time: 3 minutes

Note that in this diagram, activities are arranged in columns to indicate which resources are being used. Inside each activity symbol are written the capacity (in dozens of cookies) and the cycle time (in minutes).

How long will it take for you to fill a rush order? Assuming this order is for one dozen cookies.1. We can illustrate the sequence of events with a Gantt chart: Competitive Advantage from Operations 2 Professor Juran . Collect Money Resource E-mail Self Self Roommat e Oven Roommat e None Roommat e Cycle Time 0 minutes 6 minutes 2 minutes 1 minute 9 minutes 0 minutes 5 minutes 3 minutes Start Time 00:00 00:00 06:00 08:00 09:00 18:00 18:00 23:00 Finish Time 00:00 06:00 08:00 09:00 18:00 18:00 23:00 26:00 Therefore. Mix Fill Tray Prepare Oven Bake Remove Cool Pack. we will need to do the following: Activity Order Entry Wash Bowl. the minimum time to fill an order is 26 minutes.

How many orders can you fill in a night. It doesn't take twice as long to produce two batches as it does to produce one batch.2. Collect Money Total This is assuming all orders are for one dozen cookies. because you can start mixing the second batch without having to wait for the whole first-batch process to be completed (you can start washing out the bowl as soon as you finish filling the tray). Mix Fill Tray Total Cycle Time 6 minutes 2 minutes 8 minutes Cycle Time 1 minute 0 minutes 3 minutes 4 minutes For your roommate: Activity Prepare Oven Remove Pack. How much of your own and your roommate's valuable time will it take to fill each order? For yourself: Activity Wash Bowl. It is possible to produce two batches in 36 minutes. assuming you are open four hours each night? Here is a Gantt chart for two batches of one dozen cookies each. In general. Competitive Advantage from Operations 3 Professor Juran . a formula for the number of minutes to produce n onedozen batches is given by this expression: 16+ 10 n 3.

let's consider costs. Collect Money Resource E-mail Self Self Roommat e Oven Roommat e None Roommat e Self Roommate Total Labor Minutes Cycle Time 0 minutes 6 minutes 2 minutes 1 minute 9 minutes 0 minutes 5 minutes 3 minutes Start Time 00:00 00:00 06:00 08:00 09:00 18:00 18:00 23:00 Finish Time 00:00 06:00 08:00 09:00 18:00 18:00 23:00 26:00 8 4 12 Two Dozen Activity Order Entry Wash Bowl. Should you give any discount for people who order two dozen cookies. Because your baking trays can hold exactly one dozen cookies. how much? Will it take any longer to fill a two-dozen cookie order than a one-dozen cookie order? First. Mix Fill Tray 1 Fill Tray 2 Prepare Oven 1 Bake 1 Remove 1 Cool 1 Prepare Oven 2 Bake 2 Remove 2 Cool 2 Pack 1 Resource E-mail Self Self Self Roommat e Oven Roommat e None Roommat e Oven Roommat e None Roommat e Cycle Time 0 minutes 6 minutes 2 minutes 2 minutes 1 minute 9 minutes 0 minutes 5 minutes 1 minute 9 minutes 0 minutes 5 minutes 2 minutes Start Time 00:00 00:00 06:00 08:00 08:00 09:00 18:00 18:00 18:00 19:00 28:00 28:00 23:00 Finish Time 00:00 06:00 08:00 10:00 09:00 18:00 18:00 23:00 19:00 28:00 28:00 33:00 25:00 Competitive Advantage from Operations 4 Professor Juran . Mix Fill Tray Prepare Oven Bake Remove Cool Pack. no matter how many dozen you bake. you will produce and sell cookies by the dozen.4. So the only resource that might differ with the size of the batch is labor. three dozen cookies. or more? If so. One Dozen Activity Order Entry Wash Bowl. The cost of ingredients and the box are the same.

Mix Fill Tray 1 Fill Tray 2 Fill Tray 3 Prepare Oven 1 Bake 1 Remove 1 Cool 1 Prepare Oven 2 Bake 2 Remove 2 Cool 2 Prepare Oven 3 Bake 3 Remove 3 Cool 3 Pack 1 Pack 2 Pack 3 Collect Money Resource E-mail Self Self Self Self Roommat e Oven Roommat e None Roommat e Oven Roommat e None Roommat e Oven Roommat e None Roommat e Roommat e Roommat e Roommat e Cycle Time 0 minutes 6 minutes 2 minutes 2 minutes 2 minutes 1 minute 9 minutes 0 minutes 5 minutes 1 minute 9 minutes 0 minutes 5 minutes 1 minute 9 minutes 0 minutes 5 minutes 2 minutes 2 minutes 2 minutes 1 minute Start Time 00:00 00:00 06:00 08:00 06:00 08:00 09:00 18:00 18:00 18:00 19:00 28:00 28:00 28:00 29:00 38:00 38:00 23:00 33:00 43:00 45:00 Finish Time 00:00 06:00 08:00 10:00 08:00 09:00 18:00 18:00 23:00 19:00 28:00 28:00 33:00 29:00 38:00 38:00 43:00 25:00 35:00 45:00 46:00 Self Roommate Total Labor Minutes 12 10 22 Let's assume your time is worth $12 per hour. Your labor costs would be: # Cookies in Minutes Cost Cost per Competitive Advantage from Operations 5 Professor Juran .Pack 2 Collect Money Roommat e Roommat e 2 minutes 1 minute 33:00 35:00 35:00 36:00 Self Roommate Total Labor Minutes 10 7 17 Three Dozen Activity Order Entry Wash Bowl.

The Gantt chart shows that we are using at most three trays in the filling activity Competitive Advantage from Operations 6 Professor Juran .and threedozen orders.4 0 $3.Batch 1 dozen 2 dozen 3 dozen 12 17 22 $2.40 $1. and that the real bottleneck is the oven.4 0 Dozen $2. How many food processors and baking trays will you need? The number of baking trays ought to equal the maximum number of trays you will be using at any one time. There are only three kinds of activities that require a tray: filling the tray. A two-dozen order doesn't cost twice as much as a onedozen order. and we ought to be able to see that the processor is idle for long periods of time. a scenario depicted in this Gantt chart: It's hard to read the activities along the left axis because they are jammed together.47 It looks like you could afford to give a discount for two.70 $1. 5. The highest volume production imaginable would be if we produced three-dozen orders continuously.4 0 $4. Buying another food processor won't improve the productivity of the system at all. and cooling. baking (including preparing the oven). but the food processor is only used in the mixing stage.

or ten. There is never more than one tray in the oven at any given time. Fill Tray (yourself) Prepare Oven & Bake (oven) Prepare Oven. after which two of them sit waiting for an opportunity to get into the oven). which means there is no point in looking at expanding the capacity of any other resource unless the operation's baking capacity is expanded first. whether that means five. etc. is there a bottleneck operation in your production process that you can expand cheaply? What is the effect of adding another oven? How much would you be willing to pay for an additional oven? The bottleneck is the oven. we would have to do some more complicated analysis (including finding out what the distribution of orders would look like — how many for one dozen. trays are cheap. for 3 dozen 30 min. the oven stage will still be the bottleneck. To decide how much we would be willing to pay for another oven. Competitive Advantage from Operations Professor Juran 7 .). or whatever. and maybe four or even three if we adjust the mixing and filling part of the operation. Mix. If we had two ovens. Pack. It is reasonable to have "plenty" of trays on hand. 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? For example. how many for two dozen. Collect Money (roommate) * all in one order Time 12 min. we could make cookies faster. nor is there ever any more than one tray cooling. 6. On the other hand. So we could certainly get by with five trays. Then we could project the increase in revenue and perform some present value analysis on the incremental improvement in our revenue.at any given time (and in fact this is only because this particular plan calls for filling three trays in rapid succession. But how much faster? This gets complicated. per 3 dozen 10 min. per 3 dozen* Dozens per Hour (1 Oven) 15 per hour 6 per hour 18 per hour Dozens per Hour (2 Oven) 15 per hour 12 per hour 18 per hour Even with the second oven. but we can think about it by looking at the capacities of the various stages in our process: Stage Wash Bowl. and it would be a shame if we ever had to keep the oven (the bottleneck) waiting for lack of a tray.

Here is a Gantt chart for one two-dozen order: Competitive Advantage from Operations 8 Professor Juran .

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