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Quality Improvement in DVinias Buko Pie

Through Reduction of Burnt Pie Crust


Dangue, Ruth Esther1, Lijauco, Irene Isabella2, Manalo, Renzo Robert3
Department of Industrial Engineering, University of the Philippines Los Baos
Los Baos, Laguna, Philippines
1druthiesther@gmail.com
2irene.lijauco@gmail.com
3renzorobertm@gmail.com

Abstract This study utilizes statistical analysis and quality


control tools to investigate the recurrence of burnt pie crust in the
daily batch production of special buko pie in DVinias Buko Pie
and Food Products. Following the analysis, the mitigation of the
quality problem can be sought by purchasing new ovens, laying
out a maintenance schedule for the ovens and modifying aspects
related to baking.

I. INTRODUCTION
A. Company Background
DVinias Buko Pie and Food Products is a family-owned
bakeshop founded during 1990 by Divinia Baclig and Emma
Baclig. The business started by renting a stall, formerly owned
by Mr. Tito Barreto, in Bucal, Calamba, Laguna. By 1991, the
occupants decided to buy another available stall in Pansol,
Calamba, Laguna which became the location of their main
branch. DVinias was formally established during the same
year and is currently a registered food producing unit [1].

Fig.1.Logo of DVinias Buko Pie and Food Products [1]

At present, there are two outlets of DVinias Buko Pie and


Food Products: the main branch and a second outlet which
happens to be situated on Bucal. Apart from Divinia Baclig,
there are fourteen (14) employees currently working in the
bakeshop. DVinias mainly produce buko pies as well as other
products such as cassava cakes, ube macapuno pies, buko tarts,
pineapple cake, espasol and sapin-sapin. Most of its materials
are sourced from Prime PBS Bakery Supply, MWC Enterprise
and local vendors of coconut meat.
DVinias is currently a supplier of buko pies in a
cooperative situated in Enchanted Kingdom (EK), an
amusement park in Sta. Rosa, Laguna. In addition, buko pies

are also delivered to some allied peddlers outside EK and


around Mayapa Bus Terminal.
B. Background and Significance of the Study
With the onset of a stable business operation in DVinias
Buko Pie and Food Products, the management noted in a
personal interview that the quality of their goods has to be
consistently in par with their customers expectation as to
sustain leverage on todays market. However, it proves to be
difficult as the business is continually facing some problems
that risk the level of quality of their products.
The recurring incidence of baked pies with slightly burnt
crust is one of the quality problems that DVinias is recently
encountering. During the same interview, the management has
pointed that the special buko pie, having the greatest profit
contribution to the business, dates the most number of
occurrences of burnt crust. The sales account, however, is kept
in confidence thus no numerical value can be affixed with the
profit contribution in the past accounting period.
The identified problem has resulted to special buko pies
being reworked by scraping the burnt region. In consequence,
the buko pie decreases in size and is sold at PhP120. This marks
sales opportunity loss amounting to PhP80 per reworked pie
sold.
Data collected in the last three weeks (see Appendix A)
show that the daily production of special buko pies averages
two to three batches each day, with each batch amounting to 45
pies. The expected number of special buko pie with burnt crust
is 23.28 per cent of the total inspected, or approximately 23 pies
reworked on a day-to-day basis.

expected annual revenue of the business, and to some extent,


weakened its leverage on the food industry.
With
burnt
crust
Without
burnt
crust

34

The study aims to effect quality improvement in the


production of special buko pies in DVinias Buko Pie and
Food Products, specifically;
To reduce the proportion of special buko pies with
burnt crust to 11.65 per cent, marking a 49.96 per cent
down shift in the proportion defective per daily
production
To level the capability of the shops baking ovens in
the production of non-defective buko pies

135

(i)

E. Scope and Limitations

With
burnt
crust
Without
burnt
crust

D. Objectives of the Study

39
92

(ii)
Fig.2.Graphical summary of inspected special buko pies
from (i) oven A and (ii) oven B

Projecting operation on annual timeline, the business would


accumulate significant amount of losses on their sales revenue,
approximately equivalent to PhP671, 600 which is 10.13 per
cent of the expected annual revenue for the sale of special buko
pies. To some extent, this also results to the gradual decrease of
their customer base.

The study focuses only on quality improvement of special buko


pies, exclusive of those delivered to Enchanted Kingdom.
Moreover, the study is only interested in reducing the number
of pies with burnt crust, not with other dimensions of food
quality. Most importantly, the study assumes the following to
simplify the system under study:
o The management has a strict policy that upon inspection of
special buko pies, those classified as defective are
reworked instantaneously.
o All baked special buko pies, even those reworked, are sold
at the end of the day
F. Date and Place of the Study
The study takes place in DVinias main branch located in
Pansol, Calamba, Laguna from September to November 2014.

The study is intended to effect improvement in the quality


of DVinias buko pie products through reduction of burnt pie
crusts using statistical process control tools. This involves
systematic identification and analysis of the factors which lead
to the problem presented. The management stated that the
workers performance level and the working condition of the
ovens dictate whether the baked pie would have slightly burnt
patches. Employing quality control measures will address this
incident, reducing the percentage of buko pies baked with
defects per batch on a daily production and potentially, gaining
hard savings and positive customer appraisal.
Fig.3.Location of DVinias Buko Pie and Food Products (Google Maps)

C. Statement of the Problem


G. Roadmap/Milestone
The recurrence of baked special buko pies with burnt pie
crust, with weighted average equivalent to 23 pies per daily
production, has cost DVinias Buko Pie and Food Products
opportunity loss of PhP671, 600 which is about one tenth of the

Fig.4 shows the schedule for the activities performed during


the conduct of the study.

Fig.4.Gantt chart for study conducted

II. METHODOLOGY
A. Procedures

TABLE I
DEFINITION OF TERMS

Term

After seeking approval from DVinias as the company of


interest for the study, a one-week familiarization of how the
business operates is conducted. Through an interview with
Divinia Baclig, the common quality problems encountered by
the business are identified, however, the study narrows its
scope to the reduction of the number of pies with burnt crust.
Also, historical data on production level, sales and incidence
rate of the quality defect are asked. However, with the absence
of past records, the figures are experience-based estimates
provided through correspondence with the management.

Binomial capability
analysis

The data are gathered every weekend on their main branch


in Pansol. The floor layout of the area where the special buko
pies are baked is drawn. With each batch of pies produced, the
number of pies with burnt pie crust is noted according to a set
metric.

Defective

Capital investment
Cash flow
Controllable factor
Cumulative
percentage

Experimental factor

Factor rating

The data collected are further analyzed. To identify the root


causes of the problem identified, an Ishikawa diagram is
constructed. The root causes are then classified whether they
are controllable, non-controllable and experimental. Statistical
analysis is employed to investigate whether there are assignable
causes of variability in the companys production.

Flow diagram
FPC

Gantt chart

Based on the conclusions drawn from the analysis,


corrective measures are recommended to address the current
situation of the company. Areas for further study are elaborated
to give leeway to improvement of the experimental design.

Hypothesis

B. Definition of Terms and Symbols


Ishikawa diagram

To better understand the underlying concepts, the following


terms and symbols are defined in the following table.
Job description

MARR

Definition
Analysis tool used to generate process
capability reports for attribute data that
follow the binomial distribution [2]
Money invested in a business with the
expectation to gain profit [3]
The amount of cash generated and used by a
company in a given period [4]
Existing parameter in a system that can be
adjusted usually with an acceptable impact
on cost [5]
Percentage of the cumulative frequency
within each interval; expresses frequency
distribution [6]
A product that has one or more
nonconforming quality characteristics to its
specification
Factor with no current solution and is
gradually resolved through the formulation of
trials
Method that evaluates alternatives based on
comparison after establishing a composite
value for each alternative [7]
Tool used to illustrate the movement of men,
materials, etc. in a given process [8]
Tool that defines and documents changes in a
process through the use of symbols
representing different types of activities [8]
Tool that visually outlines the tasks involved
in a project and their order shown against a
timescale [9]
An assumption about certain characteristics
of a population or probabilistic mechanism to
be tested using the generated observations
[10,11]
Diagram that identifies potential factors
causing an overall effect by analyzing
sources of variations from man, method,
machine, material, management, and
environment [12]
A detailed overview of what a given job is,
what it is about and how it is supposed to be
done [13]
Minimum attractive rate of return; the
reasonable rate of return to be met for an
alternative to be economically viable [14]

Non-controllable
factor

OPC

Opportunity loss

p-chart

Present worth
Production

Proportion defective

Revenue

Rework

Salvage value

Stability

A source of variability, either internal or


external to the system that may either be
unchangeable or too costly to alter [15]
A tool used to shows an entire process along
with the points at which materials are
introduced, the sequence of inspections, and
all operations not involved in material
handling [16]
The payoff difference incurred from giving
up an alternative to achieve something else
[17,18]
Attributes control chart used to measure the
stability of data collected in subgroups of
varying sizes; shows a proportion on
nonconforming items rather than the actual
count [19]
Present day value of an amount that is
received at a future date [20]
The creation and distribution of goods to
consumers, aimed to satisfy human wants
[21]
The ratio of the number of nonconforming
items in a given population to the total
number of items in that population [22]
Total amount of money that a company gains
through its business activities, exclusive of
deductions such as costs and discounts [23]
The modification of a defective or nonconforming item during or after inspection
[24]
The estimated value each asset will have
after it is no longer going to be used in the
operation of a business [25]
Total variation in the measurements obtained
with a measurement system on the same
master or parts when measuring a single
characteristic over an extended time period.

TABLE II
DEFINITION OF SYMBOLS [26]

Symbol

Term

Operation

Inspection

Storage

Transport

Delay/Temporary
storage

Description
A main step
wherein a part,
product or material
is transformed
Indicates
examination or
checking for quality
or quantity
Controlled storage
in which material is
received into or
issued from a store,
or an item is
The movement of
workers, materials
or equipment
Indicates a delay in
the process or an
object set aside
until it is required

III. SYSTEMS DOCUMENTATION


A. General Processes of the Company
DVinias produces various pastry products such as buko
pies cassava cakes, ube macapuno pies, buko tarts, pineapple
cake, espasol, and sapin-sapin. The table below shows the price
for each product.
TABLE III
PRICE LIST

Item
No.
1
2
3
4
5
6
7

Product Name
Buko Pie
Buko Tart
Cassava Cake
Espasol
Pineapple Pie
Sapin-sapin
Ube Macapuno Pie

Price
(in PhP)
200
200
180
80
180
150
220

All of these products are baked in a single production area.


Hence, the management schedules the baking of each product,
accounting the demand of the customer. The flow diagram (see
Appendix B) illustrates the flow of production within the
vicinity.
Currently, there are fourteen (14) employees working in the
bakeshop. Below is a list showing the job descriptions and the
number of employees delegated to each task.
TABLE IV
JOB LIST

Job
No.
1
2
3
4

Description
Sell product, assist customers
Bake pies, tarts, etc.
Manage product delivery
Manage financial records and
accountabilities during fiscal period

Number of
employees
2
8
2
2

In contract with the cooperative, DVinias is able to market


its products in Enchanted Kingdom. The park, by which a
significant number of people visit in, provides DVinias the
strategic advantage to gaining an expansive range of potential
customers. The management noted, however, that only 70 per
cent of the total sales go to the business in accordance with the
signed agreement.
B. Subject under Study
Given the wide range of products offered by DVinias, the
study would limit its scope to the production of special buko
pies with the objectives as stated above.

Mentioned during the interview with Divinia Baclig are the


suppliers of the raw materials for baking special buko pies. The
manager affixed an estimated cost of purchasing each
ingredient and material, some expressed in bulk.
TABLE V
SUPPLIER OF RAW MATERIALS

Item

Supplier

Box
Flour
Sugar
Baking
powder
Lard
Coconut
meat
Milk

MWC Enterprise

Prime PBS Bakery Supply

Cost
(in PhP)
890/batch
1000/sack
2150/sack
1180/bag
2000/40-kg

Local suppliers

90-105/kg

N/A

7500/25-kg

To illustrate how the baking process simulates, attached are


the operations process chart (OPC) and flow process chart
(FPC).
The OPC (see Appendix C) provides the chronology of the
operations and inspections performed in the production of
special buko pies. It shows the materials used and the time
taken by worker to carry out the action. However, this does not
explicate the material handling and storage of the buko pies.
The FPC (see Appendix D), on the other hand, contains a
more detailed account of baking special buko pies which
includes the main operation, transferring of materials, possible
delays in production, inspection, and storage time. From the
FPC, the interest of the study covers the time that the product
is transferred from the production area to its final inspection.
The management stated that the preparation of raw materials
is the first step to production. The next process is the
preparation of the filling and the dough. After which, the pie is
prepared by laying a mantle of dough on the mold, followed by
the filling and topped with a layer of dough. The pies are placed
on the oven for approximately 30 minutes. The pies are
disembarked from the oven, ready for inspection and delivery
to satellite stores.
IV. RESULTS AND DISCUSSION
A. Problem Identification
The main problem observed in the firm is its production of
buko pies with burnt crusts. The difference between the
defective and non-defective pies are presented in the figure
below.

(a)
(b)
Fig.5. The buko pies that are (a) non-defective, and (b) have burnt crust.

Buko pies are considered good if they have evenly golden


crusts, however for this study, if one-eighth or more of a pies
crust is burnt as shown above, it is considered defective and is
thus reworked.
Using this measure, samples were gathered and hypothesis
testing is first conducted in order to determine whether the
proportion defective in machine 1 is statistically equivalent to
that in machine 2. Setting the level of significance at 5%, the
hypotheses to be considered in the test are as follows:
Ho
Ha

The expected proportion defective in machine 1 is


equal to that of machine 2 (P1 = P2).
The expected proportion defective in machine 1 is
not equal to that of machine 2 (P1 P2).

Using the summarized data, the test result for the test of two
proportions is shown below.

Fig.6. Result from test and CI for machine 1 and machine 2 in Minitab.

Since p-value is equal to 0.056, which is greater than the set


=0.05, we therefore fail to reject Ho, meaning it can be
concluded that the proportion defective obtained from machine
1 is statistically equivalent to that of machine 2. This being
established, it would also mean that it is necessary to consider
both machines for the solutions to be formulated in this study.
After testing the statistic equivalence of the two machines,
the stability in the process currently followed in Dvinias Buko
Pie is to be measured and validated. Both the data from oven A
(Machine 1) and oven B (Machine 2) were evaluated using
binomial capability analysis. Data points were subgrouped per
week, therefore each machine has three subgroups. It must be

noted however that it is generally recommended in binomial


capability analysis to use at least 25 subgroups, and so the
number of subgroups used in the study may be insufficient.

After analyzing the process in machine 1, results for the data


obtained from machine 2 are as follows.

Setting the acceptable value at 11.65%, the corresponding


results for each machine are presented below.

Fig.9.P-chart of pies with burnt crust per week for oven B (machine 2).

Fig.7.P-chart of pies with burnt crust per week for oven A (machine 1).

Based from the p-chart provided by Minitab, it is shown that


the process in machine 1 is stable as there are no points that are
out of control. However, it can also be seen that the percentage
defective for machine 1 is 20.12%, as shown in the graph
below.

From the p-chart for the samples gathered from Machine 2,


it can be observed that an unusually low proportion of burnt
pies were gathered in week 1 while an unusually high
proportion of burnt pies were obtained from week 2. This may
suggest that the process used for Machine 2 is out of control.
To validate this, the percentage defective in the machine was
also calculated.

Fig.10. Cumulative percentage of pies with burnt crust per week produced in
oven B (machine 2).
Fig.8. Cumulative percentage of pies with burnt crust per week produced in
oven A (machine 1).

This value exceeds the maximum acceptable percentage


defect of 11.65 %. Also, p-value was computed to be 0.84.
Since p>, we can conclude that the percentage defective in
machine A is not acceptable.

Percentage defective for the data is 29.77%, which is higher


than the accepted value 11.65%. Furthermore, it was calculated
that p=0.53. Since p>, it can then be concluded that for
Machine 2, the percentage of defective pies are higher than
11.65%.

B. Analysis
Attached is the Ishikawa diagram for the effect DVinias
Buko Pie produces pies with burned crusts (see Appendix E).
There are two categories considered in the diagram
construction, namely MATERIAL and METHOD. Branching
from the diagram are the first-level causes, further elaborated
in the why-why analysis for respective domains (see Appendix
F.1, F.2).
Controllable
For the method, the root causes identified as controllable
factors are the following: (i) there is no defined delegation of
work, (ii) they lack bakers, and (iii) the baking area is not
properly lit
The first two root causes are hypothesized to be attributed
to the number of available workers. Since the baker shoulders
other responsibilities aside from baking, the study included the
absence of delegation of work to be a root cause. However,
based from the interview, each worker has a specific task to do,
assigned to him/her by the management. Hence, it can be
controlled by adhering to the task delegation, effective during
working hours. Meanwhile, the second root cause presumes
that the bakers are seemingly low in number. However,
observation shows that the baker has extra times which he
devotes to other activities. Such activities include shouldering
other task, idling, etc. Therefore, this is not a true root cause.
For the third root cause, it observed that the light intensity
in the working area is insufficient with only one light bulb
present. This can be controlled by following the guidelines on
illimunation as provided by the Occupational Safety and Health
Association (OSHA). Baking which necessitates moderate
discrimination of detail would require a minimum light
intensity of 200 lux [27]. This can be achieved by increasing
the number of luminaires inside the area.
For the material, only one root cause is identified to be a
controllable factor, that is, the use of available amount of dough
needs to be maximized in par with the volume of demand. This
results to inconsistent thickness of pie crust where thin pies are
significantly produced. This can be controlled by adhering to
an existing standard measure from recipes made available for
commercial purposes.
Experimental
The root causes identified as experimental are the following:
(i) no one is assigned for maintenance, (ii) there is no defined
or specific method for maintenance of machine, and (iii) the
temperature reader has already exceeded its useful life.

Since the method of baking is very sensitive to temperature


[28], the crust would likely burn if baked in high temperature
relative to the allowed range. The baker has no mean of
adjusting the temperature with the reader broken. The study
attributes this to the maintenance of the oven, or the
components useful life.
The maintenance of the oven can either be lacking or not
well-defined, as the study implicated. Based from the
interview, it is determined that there exists a maintenance for
the oven thus the absence of maintenance due to unavailability
of personnel is not a true root cause. However, although the
management claims that the maintenance for the machine is
present, the machines still yield a significant number of defects
based from the data gathered. This is attributed to how effective
the maintenance schedule affects the performance of the oven.
The ovens useful life is sixteen years [29] whereas the
ovens used in DVinias has been operational for more than
twenty-four years. This proves that the oven has indeed
exceeded its economic life which warrants either replacement
or overhaul.
Other experimental factors include (i) the spatula is made of
metal and (ii) the area where the pie is held is too small. During
data gathering, it is observed that the spatula used for placing
the pies inside the oven is operationally unstable. The lack of
stability is caused by the slippery surface of the metal and its
small surface area. The metal spatula, when contact with the
metal mold becomes more slippery. While placing the pies, it
is likely to slip off and touch the sides of the oven which is,
according to the baker, very hot.
Noise
Two non-controllable factors are identified which are as
follows: (i) there is a defined delegation of work but the
employees do not follow it, and (ii) company is not willing to
enlist assistance from external entities
Baking time is influenced by the amount of attention which
the baker devotes to. During data gathering, the worker is
unable to keep his full attention to baking as he shoulders other
responsibilities. This is attributed to the employees will to
disobey the prescribed task division. Meanwhile, the effectivity
of the maintenance schedule depends on the managements
decision to enlist assistance external to the business.However,
this unwillingness is beyond the control of the study as this
relies on the managerial decision of the business owner.

V. RECOMMENDATIONS
Exceeding the useful life of the in-house thermometer is
among the identified root causes during the analysis of the
diagram. The study proposes the replacement of the oven by
purchasing at a cost of PhP45,000. This is assumed to cover the
installation of the equipment, as well. The oven would have the
following specification [30, 31]:
o Model No: XXX-XX
o Type: Electric bread oven
o (Capacity: 1 Tier /2 Tray)
o Size: 1330mm x 930mm x 630mm
o Power Supply: 220V/50Hz
o Power: 60W
o Color: Silver
o Materials: Stainless Steel
Furthermore, it is assumed that the oven would be able to
produce the desired performance level, as suggested by the goal
of the study. That is, the percentage defective from the new
oven would be nearly 11.65 per cent. Also, it would not
implicate maintenance unless it exceeds its useful life of sixteen
years.
Meanwhile, in response to the lack of effective maintenance
schedule, the study proposes to lay out a maintenance routine
as alternative to oven replacement. The maintenance would
cover the cleaning of the oven, thorough parts inspection and
provision of recommendations upon detection of mechanical
defect.
LBC Bakery Equipment suggested that during cleaning, it
is imperative to use proper cleaners and tools such as alkaline,
alkaline chlorinated or non-chloride containing cleaners with
soft cloths, soft bristled brushes, plastic scrapers and plastic
scouring pads. Adopting LBCs manual for LRO equipment
weekly cleaning, the actions below should be followed:
Let unit cool
Sweep floor with heat resistant broom
Clean both sides of oven window with mild soap and
water
Clean control panel with mild soap and water
Clean handle with mild soap and water
Clean interior stainless steel surfaces with a stainless
safe cleaner such dish soap, ammonia, detergent and
medallion [32]
Apart from cleaning, maintenance would include the
checking of the oven door seal and calibration of the ovens
temperature. If the door is not sealed properly, the heat can
escape from the oven, thus expending longer baking time and
increasing utility bills. Personal inspection is sufficient to
ensure properly sealed oven doors. As for the ovens

temperature, additional equipment, such BakeWATCH, can


be employed to monitor temperature for accuracy.
BakeWATCH is a profiling kit designed to measure, record
and document temperature variations in both baked goods and
oven. Further details are provided in their website where the
user can request a quotation for purchasing the software [33].

Fig.11.BakeWATCH [32]

The maintenance would cover three hours per day, a day per
week and each week per month. In conjunction with the
interview, the management specified that production is lightest
on Monday, thus it would be optimal to implement the schedule
during this day. The estimated maintenance cost, projected on
annual planning horizon, is equal to PhP8,388.
Shown below is the illustration of the cash flow between
two alternatives, helpful in assessing the economic impact of
both actions.
TABLE VI
CASH FLOW FOR SPECIFIED ALTERNATIVES

Capital investment
Expected annual
revenue
Maintenance cost
Salvage value at end
of useful life (N=16)
AW (15%)

Retain old oven


9,000

Replace oven
45,000

6,628,400

6,949,600

8,388

9,000

6.62M

6.94M

Computing for the annual worth of both alternatives,


replacing the oven would yield a higher annuity compared to
that of retaining the old oven. The difference between the
equivalences amounts to PhP323,704.70.
In the evaluation of both alternatives, the study considers
three criteria, namely, revenue increase (RI), defect reduction
(DR) and implementation cost (IC). Attached is the detailed
breakdown of each criteria (see Appendix G).
The revenue increase is measured by ratio of the expected
annual revenue with the new alternative over status quo. The
defect reduction pertains to the percentage down shift of baked
pies with burnt crust. While, the implementation cost refers to

cost projected as annuities over the ovens useful life with the
marginal attractive rate of return set at 15%.
TABLE VII
FACTOR RATING FOR SPECIFIED ALTERNATIVES

Alternative
Maintenance
Schedule
New Oven

DR
(25%)

IC
(35%)

RI
(40%)

Total

1.35

2.60

Table VII shows the factor rating for the alternatives


presented. Note that this considers one oven, however since it
is statistically proven that both exhibit the same performance,
the number of ovens would not significantly influence the
decision to which alternative would be implemented. Note that
the amount of revenue increase has the greatest weight, having
been implicated in the interview with the management.
For maintenance schedule, the study supposes that it would
not be able to reduce the percentage defect however would not
worsen it either, thus it remains the same. The implementation
cost is equal to PhP9,899.10. There is no expected revenue
increase with performance level remaining the same.

VII. AREAS FOR FURTHER STUDY


Aside from investigating the recurrence of burnt pie crust in
the daily batch production of special buko pie in Dvinias
Buko Pie and Food Products, it is suggested that the study focus
on other defects or products within the bakeshop. Possible
nonconformities include unfinished or incomplete products,
non-uniform weights or sizes among same goods, or even signs
of contamination such as molds, detection of small insects,
rocks, hair in the product, etc. In line with this, the quality of
service within the stores can be evaluated as well in which most
of their business significantly depends on.

VIII. REFERENCES
[1]

[2]

[3]

[4]

On the other hand, replacing the oven would mean a


reduction of baked pies with burnt pie crust by 49.96%. The
implementation cost is equal to PhP7,394.40. The expected
annual revenue is expected to be increase to PhP6,949,600
which is one and one-twentieth of the former revenue.

[5]

[6]

[7]

Summing the weighted ranks for both alternatives, it is


concluded that purchasing new ovens would be the preferred
alternative. It is expected to lower the percentage defective to
11.95% if the assumptions are met and that no external source
of variability factors in.

[8]
[9]
[10]

VI. SUMMARY AND CONCLUSION


DVinias Buko Pie and Food Products is a bakeshop
situated in Laguna which sells special buko pies, among other
baked goods, to their outlet stores. However, data for the last
three weeks show that significant percentage of the baked pies
have burnt pie crust which is attributed to the ovens capability
and human factors.
In conjunction with the factor rating, it is recommended that
the management replace the ovens, with budget limited to
PhP45,000. The ovens would decrease the proportion of burnt
pies by 49.96% and level the performance between the ovens.
If the alternative follows through as expected, the mean annual
revenue would equal to PhP6,949,600. Moreover, improved
quality of buko pies can also be translated to soft savings with
increased customer patronization and sustained market
leverage.

[11]
[12]

[13]

[14]

[15]

[16]

[17]
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2014
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http://www.investopedia.com/terms/c/cashflow.asp.
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from
http://stats.oecd.org/glossary/detail.asp?ID=3675.
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http://www.businessdictionary.com/definition/opportunitycost.html#ixzz3LK7mXaXD.
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8,
2014
from
http://www.pqsystems.com/qualityadvisor/DataAnalysisTools/p_c
hart.php.

[20] Retrieved
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8,
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from
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[21] Retrieved
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from
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[25] Retrieved
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[26] M.A. Ramirez. (July, 2013). Manufacturing engineering. [Lecture
handout].
[27] Occupational Safety and Health Center. (May, 2013). Occupational
safety and health standards. [PDF].
[28] Haedrich, K., Pie: 300 Tried-and-True Recipes for Delicious
Homemade Pie, The Harvard Common Press, 2004. Retrieved

[29]

[30]

[31]

[32]
[33]

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9,
2014
from
http://books.google.com.ph/books?id=20FzM91fMI0C&pg=PA39
7&lpg=PA397&dq=baking+pie+sensitivity+to+temperature&sour
ce=bl&ots=fXdnM4Wk3B&sig=OrDYCWHzDefEJ9jtxyE8ak5M
PXU&hl=fil&sa=X&ei=UJqGVN6rGcv98QWxjIF4&ved=0CCk
Q6AEwAQ#v=onepage&q=baking%20pie%20sensitivity%20to%
20temperature&f=false.
(2)
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2014
from
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g,Position,1-16,16.
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Retrieved December 7, 2014 from http://www.bakewatch.com/

APPENDIX A
SUMMARY OF DATA COLLECTED FOR THREE (3) WEEKS

Sample Number
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18

Time
4:00
4:15
4:23
4:27
4:29
4:30
4:35
4:40
4:45
4:48
4:50
4:56
5:00
5:03
5:05
5:10
5:12
5:20

Sample Number
1
2
3
4
5
6
7
8
9
10
11

Time
4:28
4:30
4:36
4:48
4:50
4:53
4:59
5:05
5:10
5:19
5:22

Sample Number
1
2
3
4
5
6
7
8
9
10

Time
4:13
4:15
4:38
4:40
4:48
5:00
5:02
5:04
5:19
5:23

MACHINE 1
12-Oct-14
Number of Inspected Pies
8
8
6
4
3
1
3
1
4
4
4
4
4
7
1
6
1
4
18-Oct-14
Number of Inspected Pies
4
2
3
4
4
6
2
8
4
2
6
25-Oct-14
Number of Inspected Pies
7
8
2
6
8
8
3
5
3
1

Number of Pies with 'Defect'


0
1
1
0
0
0
1
0
0
0
3
0
1
1
0
4
1
3
Number of Pies with 'Defect'
1
0
0
0
0
1
2
0
0
0
1
Number of Pies with 'Defect'
0
0
0
0
2
0
3
5
2
1

APPENDIX A (contd)
SUMMARY OF DATA COLLECTED FOR THREE (3) WEEKS

Sample Number
1
2
3
4
5
6
7
8

Time
4:15
4:18
4:20
4:35
4:40
4:42
4:50
4:56

Sample Number
1
2
3
4

Time
n/a
4:43
4:58
5:01

Sample Number
1
2
3
4
5
6
7

Time
4:24
4:27
4:52
4:56
5:02
5:18
5:27

MACHINE 2
12-Oct-14
Number of Inspected Pies
8
6
2
7
6
1
8
7
18-Oct-14
Number of Inspected Pies
7
8
12
2
27-Oct-14
Number of Inspected Pies
8
8
8
8
8
4
13

Number of Pies with 'Defect'


0
0
0
1
0
0
1
1
Number of Pies with 'Defect'
3
4
11
2
Number of Pies with 'Defect'
3
2
1
0
2
3
5

APPENDIX B
FLOW DIAGRAM

APPENDIX C
OPERATIONS PROCESS CHART

APPENDIX D
FLOW PROCESS CHART

APPENDIX E
ISHIKAWA DIAGRAM

APPENDIX F.1
WHY-WHY ANALYSIS (METHOD)

APPENDIX F.2
WHY-WHY ANALYSIS (MATERIAL)

APPENDIX G
CRITERIA FOR FACTOR RATING

Revenue increase
Let X be the ratio of the new annual revenue from the selected alternative to the current alternative
Criteria
Rating
0X<1
1
1X<2
2
2X<3
3
3X<4
4
4X<5
5
Implementation cost
Criteria
The annual implementation cost within 16 years ranges from 10,000-12,000
The annual implementation cost within 16 years ranges from 8,000-10,000
The annual implementation cost within 16 years ranges from 6,000-8,000
The annual implementation cost within 16 years ranges from 4,000-6,000
The annual implementation cost within 16 years ranges from 2,000-4,000

Rating
1
2
3
4
5

Defect reduction
Description
The alternative has been able to reduce the percentage defective by 20% or below
The alternative has been able to reduce the percentage defective by 40% or below, but above 20%
The alternative has been able to reduce the percentage defective by 60% or below, but above 40%
The alternative has been able to reduce the percentage defective by 80% or below, but above 60%
The alternative has been able to reduce the percentage defective by 100% or below, but above 80%

Rating
1
2
3
4
5

APPENDIX H
PERTINENT COMPUTATIONS

Average daily production


300
=
= 100

3
Expected proportion defective
1 % 1 + 2 % 2 =
39(34169) + 19(39131)
= 0.2328
39 + 19
Expected annual revenue (in PhP)
365 + 365 =
23(120)(365) + 77(200)(365) = 6,628,400
Expected annual losses (in PhP)
365 =
23(80)(365) = 671,600
Percentage of losses from annual revenue

671,600
=
= 0.1013
6,628,400
Percentage shift in defective items

0.2328 0.1165
=
= 0.4996
%
0.2328
Maintenance cost (in PhP)
3 1 4 12
(
)(
)(
)(
)=
8

466
(3)(1)(4)(12) = 8,388
8
Expected annual revenue1 (in PhP)
365 + 365 =
12(120)(365) + 88(200)(365) = 6,949,600
Goal
0.2328 0.7(0.2328 0.0667) = 0.1165 (~11.65%)

With new oven

Annual Worth (Retain old machine)

9,000 ( , 15%, 16) + 6,628,400 8,388 = 6,618,500.90

Annual Worth (Replace machine)

45,000 ( , 15%, 16) + 6,949,600 + 9,000 ( , 15%, 16) = 6,942,205.60

Implementation Cost (Retain old machine)

8,388 + 9,000 ( , 15%, 16) = 9,899.10

Implementation Cost (Replace machine)

45,000 ( , 15%, 16) 9,000 ( , 15%, 16) = 7,394.40