BA 451 Case 1 Questions

Please answer ALL questions in the Case report.

Presentation assignment: Group A – Questions 1~5;

Group B – Questions 6~9;
Group C – Questions 10~12;
Group D – Questions 13~15.

1. Draw the flow chart of your business.

2. Assume that you only take one-dozen cookie orders. Use the template to draw the
Gantt chart for the first three orders.

3. Suppose that you have enough demand. How many cookies can you sell in a night,
assuming that you are open for exact four hours each night?
- 4 * (60 minutes / 1 hour) = 240 minutes
 - Bottleneck is the baking portion (10 minutes). So capped at 1 dozen/ 10 minutes
* 60 minutes / 1 hour = 6 dozen per hour.
- Time to initially prepare for all operations is 8 minutes (Mixing, cleaning, and
loading) + the last 8 minutes
- 4 * 60 - 16 / 10 = 22.4 (round down because can’t have .4 of a dozen) so 22
orders of a dozen each
4. How much time do you spend on each order? How about your roommate? How
about other resources, i.e., a tray, the mixer, and the oven?

Resource Kirsten Roommate Idle Time

Mixing 6 minutes

Scooping/Load 2 minutes

Setting Oven up 1 minute

Baking 9 minutes

Cool Down 5 minutes

Packing/Boxing 2 minutes

Payment 1 minute

Time per person 8 minutes 4 minutes 14 Minutes

Total Time: 26 minutes per dozen order of cookies

5. Since mixers and baking trays are cheap. At least how many electric mixers and
baking trays will you need?

One electric mixer and three baking trays. Since one electric mixer can mix up
three dozens cookies and having three trays can make the spooning process
more efficient once the orders come in.

6. If your roommate is sick, draw the Gantt chart for the first three orders. How many
cookies can you sell in a night?
36 mins first order
12 mins the rest of the orders
240-36 = 204 mins
204/12 = 17 + 1 = 18 dozens per night x 12 = 216 cookies
7. You are considering rent a second oven. With two ovens, draw the Gantt chart for
the first three orders.

8. With two ovens, how many cookies can you sell in a night? Suppose that you have
enough demand.

4 * (60 minutes / 1 hour) = 240 minutes

Bottleneck is the baking portion (10 minutes). So capped at 1 dozen/ 10 minutes
* 60 minutes / 1 hour = 6 dozen per hour.
Time to initially prepare for all operations is 8 minutes (Mixing, cleaning, and
loading) + the last 8 minutes
4 * 60 - 16 / 10 = 22.4 (round down because can’t have .4 of a dozen) so 22
22*2(using two ovens) = 44 orders of a dozen each

9. You charge $10 for each dozen. What is your budget to rent the second oven?
 22 dozens * $10 = $220
$220 - (($0.60*22) + ($0.10*22) = $204.60

10. Assume that you have one oven and you only take two-dozen orders. Draw the
Gantt chart for the first two orders. Suppose that you have enough demand. How many
cookies can you sell in a night, assuming that you are open for exact four hours each
night?

-4hrs*60min=240min
-36min to complete the first order
-20min to complete following orders
-240-36=204 204/20=10.2 10.2+1(initial order)=11.2
-11 orders because you can’t make .2

11. For one-dozen orders, you charge $10 for each dozen. Without considering the labor
cost, only focusing on the number of cookies you can make per night, will you give
discounts to two-dozen orders? If yes, how much?
-You can complete 11 two-dozen orders in a night
-Revenue would be $20*11=$220
-Expenses would be $0.7*(11orders*2dozen)=$15.4
-Net Income = $204.6, the same as if you were to only sell to customers who bought
only 1-dozen orders
-No, you will not

12. If you consider the labor cost of $20/hour each person, will you give discounts to two-
dozen orders? If yes, how much?
-1hr of work=$20 or $0.33 per minute
-One-dozen order number of minutes worked:
Kristen: 8minutes*22batches=176minutes/3=$58.67 for work
Roomate: 4minutes*22batches)=88minutes or $29.33 for work
For a total of $88
-$204.6-88=$116.60 profit
-Two-dozen order number of minutes worked:
-Kristen: 10minutes*11batches=110minutes or $36.67
-Roomate: 7minutes*11batches=77minutes or $25.67
For a total of $62.33
-$204.6-62.33=$142.27 profit
-22x-(22(.6+.1)-62.33=the smaller amount which = $116.60
x=$8.83
$10-$8.83=$1.17
-you can offer a discount of $1.17

13. Assume that you have one oven and you only take three-dozen orders. Draw the
Gantt chart for the first two orders. Suppose that you have enough demand. How many
cookies can you sell in a night, assuming that you are open for exact four hours each
night?

4 hrs * 60 mins = 240 minutes

46 minutes to complete the first order
30 minutes to complete the following orders
240-46=194 194/30=6.47 6.47+1(initial order)=7.47
7 orders because you can’t do .47

14. For one-dozen orders, you charge $10 for each dozen. Without considering the labor
cost, only focusing on the number of cookies you can make per night, will you give
discounts to three-dozen orders? If yes, how much?

Since the maximum capacity of Kristen and his roommate is 4 hours a night,
which they can produce 264 cookies per night. It is more beneficial for us to not
give discounts to larger order as it only decreases our income with the same
amount of time spent producing the cookies. Most importantly bottleneck
operation capacity is independent of the order size

15. If you consider the labor cost of $20/hour each person, will you give discounts to
three-dozen orders? If yes, how much?
- Because the mixer can make three dozen and scooping takes the same amount
of time for one dozen as it does for three, the only variable that increases the
time in minutes spent is the packaging time which is 2 minutes per dozen.
 Order Sizes

Minutes spent on 1 dozen 2 dozen 3 dozen

each order

Kirsten 8 10 12

Roommate 4 7 10

Total 12 17 22
If labor costs are $20 per hour per person, Find labor costs per min = 20 / 1 hour *(1 hour/
60min) = $0.3333 per minute. Now we can calculate the cost per dozen

# dozens of Minutes $$ Cost in labor $$ per dozen Discount

Cookies in oven

1 12 $8 $8 $0.00

2 17 $11.33 $5.67 $2.33

3 22 $14.66 $4.87 $3.13

We could probably offer a 10-20% discount for orders of 3 dozens