© Randolph Kirchain and Frank R Field, Materials Systems Laboratory, Massachusetts Institute of Technology

PIZZA MAKING PROCESS-BASED COST MODEL

MIT - Materials Systems Laboratory
Jump to Sensitivity Analysis

PIZZA DESIGN
Pizza Thickness 8 mm
Pizza Diameter 30 cm
Pepperoni Thickness 0.25 cm
Pepperoni Coverage 80%
Cheese Density 0.3 g/cm2
Sauce Density 0.25 g/cm2

EXOGENOUS DATA
Annual Production Volume 50 (000/yr)
Facility Production Capacity 100 (000/yr)
Product Life 5 yrs
Direct Wages (w/ benefits) $15.00 /hr
Working Days/Yr 240
Downtimes
No (i.e., none NOT No.) Operations 16 hrs/day
Planned Paid 0.5 hrs/day
Planned Unpaid 1 hrs/day

Discount Rate 10%

Price, Building Space $1,500 /sq m

Building Recovery Life 30 yrs
Price of Electricity $0.080 /kWh
Price of Nat Gas $6.500 /MMBtu
Accounting Life of Machine 20 yrs
Overhead Burden (% fc) 35.0%

PROCESS INPUTS
Unplanned Downtime 1.50 hrs/day
Material Scrap Rate 2.0%
Baking Reject Rate 1.0%
Oven Cost $75,000

Capacity in Parallel 2 pizzas

Load / unload time 30 sec
 Pan Cost $ 50.00

Floor space 15 m2
Energy Consumption (baking) 240,000 btu/h
Cooking Target Centerline Temperature 60 C
Dough Temp 20 C
Oven Temp 225 C

Direct Laborers Per Prep 1

Dedicated Equipment (1/0) 1 (1=y;0=n)

Auxiliary Equip. Cost (% mmch) 50.0%

Installation Cost (% mmch) 20.0%
Maintenance Cost (% invc) 5.0%

Overrides
Total Cycle Time 0 sec

Food Characteristics
Pepperoni Stick Length 60 cm
Pepperoni Stick End Trim 1 cm
Pepperoni Diameter 2.5 cm
Pepperoni Cost $1.00 /stick

Dough Density 0.8 g/cc

Dough Cost $ 0.25 /kg $ 0.50
Dough Thermal Diffusivity 1.50E-08 0.5
Cheese Cost $8 /kg
Sauce Cost $3 /kg
 PIZZA MAKING - COST SUMMARY
MIT - Materials Systems Laboratory

VARIABLE COSTS per piece per year percent

Material Cost $3.48 $173,963 24.52%
Energy Cost $0.54 $26,920 3.79%
Labor Cost $2.85 $142,364 20.06%
Total Variable Cost $6.86 $343,246 48.38%

FIXED COSTS per piece per year percent investment

Main Machine Cost $3.17 $158,570 22.35% $1,350,000
Auxiliary Equipment Cost $1.32 $66,071 9.31% $562,500
Tooling Cost $0.02 $1,187 0.17% $4,500
Fixed Overhead Cost $1.83 $91,571 12.91%
Building Cost $0.72 $35,802 5.05% $337,500
Maintenance Cost $0.26 $13,082 1.84%
Total Fixed Cost $7.33 $366,283 51.62% $1,692,000

Total Fabrication Cost $14.19 $709,529 100.00%

RELATED VARIABLES

Material Requirements:
Pizza Area 706.86 cm2
Pepperoni Area 565.49 cm2
Pepperoni per Stick 236.00 slices/stick
1,158.46 in2/stick
Annual Pepperonit Required 28,560,470 in2 Production
24,654 sticks
$24,653.78 /year

Pizza Dough 3,648.29 cm3

2,918.64 g
Annual Dough Required 147,409 kg/year
$36,852.15 /year

Cheese 212.06 grams/pizza

Annual Cheese Required 10,710.18 kg/year
$ 85,681.41

Sauce 176.71 grams/pizza

Annual Sauce Required 8,925.15 kg/year
 $ 26,775.44

Process Calculations
Effective Production Volume 50,506
Effective Capacity 101,011
Capacity and Volume are Consistent? 1
Available Operating Time 1,200 hours / year

Effective Cycle Time (from below) 615 secs / part

Required Operating Time (produced) 8,628 hours / year
Required Operating Time (capacity) 17,256 hours / year
Run-Time for One Machine (produced 719%
Run-Time for One Machine (capacity) 1438% Other Fixed
Number of Parallel Streams 15.00

Paid Operating Time (available in yea 1,320 hours / year

Actual Paid Operating Time (allocated 9,491 person-hours / year

Number of tools required 90

Required Building Space 225 sq m

Annual Energy Consumption 2,071 MMBtu

Cycle Time Calculations

Predicted Used
Cooking Time 1200
Total Cycle Time (sec) 1230.0 1230.0

Calculation workspace for estimating cycle time

x 3 mm
t 360 sec

Dough Temp 20 C
Oven Temp 225 C

Target Temp 60 C
Time to temp 1200 sec
thickness 6 mm
alpha
 ρpotato = 1050 kg/m3 1050
cp,potato = 3.64 kJ/kgK 3.64
kpotato = 0.55 W/mK 0.55
αpotato = 1.5×10-7 m2/s 3.00E-08
h = 400 W/m2K

Temp (x,t) 20.02203979123

erf 0.999892488823

Table for looking up cycle time

20.02203979123
10 20.02 10
20 20.02203979123 20
30 20.02203979123 30
40 20.02203979123 40
50 20.02203979123 50
60 20.02203979123 60
70 20.02203979123 70
80 20.02203979123 80
90 20.02203979123 90
100 20.02203979123 100
110 20.02203979123 110
120 20.02203979123 120
130 20.02203979123 130
140 20.02 140
150 20.02 150
160 20.02 160
170 20.02 170
180 20.02 180
190 20.02 190
200 20.02 200
210 20.02 210
220 20.02 220
230 20.02 230
240 20.02 240
250 20.02 250
260 20.02 260
270 20.02 270
280 20.02 280
290 20.02 290
300 20.02 300
310 20.02 310
320 20.02 320
330 20.02 330
340 20.02 340
350 20.02 350
360 20.02 360
370 20.02 370
380 20.02 380
390 20.02 390
400 20.02 400
410 20.02 410
420 20.02 420
430 20.02 430
440 20.02 440
450 20.02 450
460 20.02 460
470 20.02 470
480 20.02 480
490 20.02 490
500 20.02 500
510 20.02 510
520 20.02 520
530 20.02 530
540 20.02203979123 540
550 20.02203979123 550
560 20.02203979123 560
570 20.02203979123 570
580 20.02203979123 580
590 20.02203979123 590
600 20.02203979123 600
610 20.02203979123 610
620 20.02203979123 620
630 20.02203979123 630
640 20.02203979123 640
650 20.02203979123 650
660 20.02203979123 660
670 20.02203979123 670
680 20.02203979123 680
690 20.02203979123 690
700 20.02203979123 700
710 20.02203979123 710
720 20.02203979123 720
730 20.02203979123 730
740 20.02203979123 740
750 20.02203979123 750
760 20.02203979123 760
770 20.02203979123 770
780 20.02203979123 780
790 20.02203979123 790
800 20.02203979123 800
810 20.02203979123 810
820 20.02203979123 820
 830 20.02203979123 830
840 20.02203979123 840
850 20.02203979123 850
860 20.02203979123 860
870 20.02203979123 870
880 20.02203979123 880
890 20.02203979123 890
900 20.02203979123 900
910 20.02203979123 910
920 20.02203979123 920
930 20.02203979123 930
940 20.02203979123 940
950 20.02203979123 950
960 20.02203979123 960
970 20.02203979123 970
980 20.02203979123 980
990 20.02203979123 990
1000 20.02203979123 1000
1010 20.02203979123 1010
1020 20.02203979123 1020
1030 20.02203979123 1030
1040 20.02203979123 1040
1050 20.02203979123 1050
1060 20.02203979123 1060
1070 20.02203979123 1070
1080 20.02203979123 1080
1090 20.02203979123 1090
1100 20.02203979123 1100
1110 20.02203979123 1110
1120 20.02203979123 1120
1130 20.02203979123 1130
1140 20.02203979123 1140
1150 20.02203979123 1150
1160 20.02203979123 1160
1170 20.02203979123 1170
1180 20.02203979123 1180
1190 20.02203979123 1190
1200 20.02203979123 1200
 PIZZA MAKING - Sensitivity Analysis
MIT - Materials Systems Laboratory

Prod Volume Var. Cost Fixed Cost Total Cost

$3.97 $7.33 $5.44 Effect of Production Volume
1 $3.98 $366.28 $77.23
5 $3.98 $73.26 $18.63 $20.00
10 $3.98 $36.63 $11.30
$18.00
15 $3.97 $24.42 $8.86
20 $3.97 $18.31 $7.64 Var. Cost
$16.00
Total Cost
25 $3.97 $14.65 $6.90
$14.00

Unit Cost ($ / piece)

30 $3.97 $12.21 $6.42
40 $3.97 $9.16 $5.81 $12.00

50 $3.97 $7.33 $5.44 $10.00

60 $3.97 $6.10 $5.20 $8.00
70 $3.97 $5.23 $5.02
$6.00
80 $3.97 $4.58 $4.89
90 $3.97 $4.07 $4.79 $4.00
100 $3.97 $3.66 $4.71
$2.00
110 #N/A #N/A #N/A
120 #N/A #N/A #N/A $0.00
130 #N/A #N/A #N/A 0 10 20 30 40 50 60 70
140 #N/A #N/A #N/A
Production Volume (thousands)
150 #N/A #N/A #N/A

Unit Cost Capacity

$5.44 100 200 300 400 500
Effect of Production Vol & Capac
Production 1 $77.23 $126.07 $174.91 $223.75 $272.59
Volume 25 $6.90 $8.86 $10.81 $12.77 $14.72 $20.00
50 $5.44 $6.42 $7.39 $8.37 $9.35
$18.00
75 $4.95 $5.60 $6.25 $6.90 $7.56
100 $4.71 $5.20 $5.68 $6.17 $6.66 $16.00
125 #N/A $4.95 $5.34 $5.73 $6.12 $14.00
Unit Cost ($/part)

150 #N/A $4.79 $5.11 $5.44 $5.77

$12.00
175 #N/A $4.67 $4.95 $5.23 $5.51
200 #N/A $4.59 $4.83 $5.07 $5.32 $10.00
225 #N/A #N/A $4.73 $4.95 $5.17 $8.00
250 #N/A #N/A $4.66 $4.85 $5.05
275 #N/A #N/A $4.60 $4.77 $4.95 $6.00
300 #N/A #N/A $4.54 $4.71 $4.87 $4.00
325 #N/A #N/A #N/A $4.65 $4.80
$2.00
350 #N/A #N/A #N/A $4.60 $4.74
$0.00
0 100 200 300 400 500
 $4.00
$2.00

375 #N/A #N/A #N/A $4.56 $4.69 $0.00

400 #N/A #N/A #N/A $4.52 $4.65 0 100 200 300 400 500
425 #N/A #N/A #N/A #N/A $4.61 Production Volume (parts/year)
450 #N/A #N/A #N/A #N/A $4.57

Cost Breakdown @ 50,000

Unit Costs
Material $3.48 Cost Breakdown By Element
Other Var $0.50
2500%
Equip $0.90
Tooling $0.00
Other Fixed $0.56
Fraction of Total Cost

Other Fixed
Total Cost $5.44 Tooling
Equip
Other Var
Material

0%

$14.19
1 373.1534
5 80.12197
10 43.49372
15 31.28385
20 25.17925
25 21.51623
30 19.07443
40 16.02202
50 14.19058
60 12.96961
70 12.09749
80 11.44341
90 10.93467
100 10.52768
110 #N/A
120 #N/A
130 #N/A
140 #N/A
150 #N/A
160 #N/A
170 #N/A
180 #N/A
190 #N/A
200 #N/A
210 #N/A
220 #N/A
230 #N/A
240 #N/A
250 #N/A
260 #N/A
270 #N/A
 Unit Cost Pizza Thickness
lume $14.19 6 6.5 7 7.5 8
Past 10 $11.08 $11.08 $11.09 $11.09 $11.10
Mass 13 $11.33 $11.34 $11.35 $11.36 $11.36
16 $11.65 $11.66 $11.67 $11.69 $11.70
19 $12.03 $12.05 $12.07 $12.09 $12.11
Var. Cost 22 $12.48 $12.51 $12.53 $12.56 $12.58
Total Cost
25 $13.00 $13.03 $13.06 $13.10 $13.13
28 $13.58 $13.62 $13.66 $13.70 $13.74
31 $14.23 $14.28 $14.33 $14.38 $14.43
34 $14.94 $15.00 $15.06 $15.12 $15.18
37 $15.72 $15.79 $15.86 $15.93 $16.00
40 $16.57 $16.65 $16.73 $16.81 $16.90

6 6.5 7 7.5 8
10 $11.08 $11.08 $11.09 $11.09 $11.10
50 60 70 13 $11.33 $11.34 $11.35 $11.36 $11.36
16 $11.65 $11.66 $11.67 $11.69 $11.70
usands)
19 $12.03 $12.05 $12.07 $12.09 $12.11
22 $12.48 $12.51 $12.53 $12.56 $12.58
25 $13.00 $13.03 $13.06 $13.10 $13.13
28 $13.58 $13.62 $13.66 $13.70 $13.74
31 $14.23 $14.28 $14.33 $14.38 $14.43
oduction Vol & Capacity
34 $14.94 $15.00 $15.06 $15.12 $15.18
37 $15.72 $15.79 $15.86 $15.93 $16.00
40 $16.57 $16.65 $16.73 $16.81 $16.90

100
200
300
400
500

200 300 400 500

 200 300 400 500

n Volume (parts/year)

Old New
1 28.39702 373.1534
5 8.858801 80.12197
10 6.416918 43.49372
15 5.602694 31.28385
20 5.195779 25.17925
25 4.951473 21.51623
30 4.788733 19.07443
40 4.58521 16.02202
50 4.951473 14.19058
60 4.788667 12.96961
70 4.672378 12.09749
80 4.585161 11.44341
90 4.517325 10.93467
100 4.707245 10.52768
110 4.640645 #N/A
120 4.585144 #N/A
130 4.538182 #N/A
140 4.497929 #N/A
150 4.625836 #N/A
160 4.585136 #N/A
170 4.549225 #N/A
180 4.517303 #N/A
190 4.488742 #N/A
200 4.585131 #N/A
210 4.55606 #N/A
220 4.529632 #N/A
230 4.505502 #N/A
240 4.585128 #N/A
250 4.560708 #N/A
260 4.538167 #N/A
270 4.517296 #N/A
 Working Area
x

Dough Temp
8.5 9 9.5 10 10.5 11 Oven Temp
11.10302 11.10814 11.11326 11.11838 11.1235 11.12861
11.3733 11.38195 11.3906 11.39925 11.4079 11.41655 Target Temp
11.71408 11.72718 11.74028 11.75339 11.76649 11.77959
12.12537 12.14384 12.16232 12.1808 12.19927 12.21775 thickness
12.60716 12.63193 12.6567 12.68148 12.70625 12.73102 alpha
13.15946 13.19145 13.22344 13.25543 13.28742 13.31941
13.78227 13.82239 13.86252 13.90265 13.94278 13.98291 ρpotato = 1050 kg/m3
14.47558 14.52477 14.57395 14.62314 14.67233 14.72152 cp,potato = 3.64 kJ/kgK
15.2394 15.29857 15.35773 15.4169 15.47607 15.53524 kpotato = 0.55 W/mK
16.07372 16.14379 16.21386 16.28394 16.35401 16.42408 αpotato = 1.5×10-7 m2/s
16.97856 17.06045 17.14234 17.22424 17.30613 17.38802 h = 400 W/m2K

8.5 9 9.5 10 10.5 11

11.10302 11.10814 11.11326 11.11838 11.1235 11.12861
11.3733 11.38195 11.3906 11.39925 11.4079 11.41655 60
11.71408 11.72718 11.74028 11.75339 11.76649 11.77959 120
12.12537 12.14384 12.16232 12.1808 12.19927 12.21775 180
12.60716 12.63193 12.6567 12.68148 12.70625 12.73102 240
13.15946 13.19145 13.22344 13.25543 13.28742 13.31941 300
13.78227 13.82239 13.86252 13.90265 13.94278 13.98291 360
14.47558 14.52477 14.57395 14.62314 14.67233 14.72152 420
15.2394 15.29857 15.35773 15.4169 15.47607 15.53524 480
16.07372 16.14379 16.21386 16.28394 16.35401 16.42408 540
16.97856 17.06045 17.14234 17.22424 17.30613 17.38802 600
660
720
780
840
900
960
1020
1080
1140
1200
1260
1320
1380
1440
1500
1560
1620
1680
1740
1800
 1 mm

t 9 sec
20 C erf 1.00
225 C Temp (x,t) 20 C
Target Temp @ 300 sec
60 C

5 mm

20 2 4 6 8 10
1050 60 113.4916 47.88761 25.1962 20.58817 20.03976
3.64 120 142.6231 79.82731 43.33849 27.17807 21.72364
0.55 180 156.7257 99.83186 60.32465 37.4643 26.44199
7.50E-09 240 165.4246 113.4916 74.02826 47.88761 32.79352
300 171.4709 123.5219 85.04865 57.3966 39.59404
360 175.9859 131.2745 94.06864 65.82629 46.27005
420 179.5227 137.4933 101.5951 73.25827 52.58604
480 182.3902 142.6231 107.985 79.82731 58.46463
540 184.7759 146.9476 113.4916 85.66485 63.89883
20 600 186.8011 150.6571 118.2975 90.88461 68.91153
20.58817 660 188.5483 153.8845 122.5378 95.5811 73.53668
27.17807 720 190.0758 156.7257 126.314 99.83186 77.81079
37.4643 780 191.4261 159.2519 129.7044 103.7004 81.76907
47.88761 840 192.631 161.5173 132.77 107.239 85.44391
57.3966 900 193.7149 163.5638 135.5591 110.4908 88.86438
65.82629 960 194.6967 165.4246 138.1108 113.4916 92.05631
73.25827 1020 195.5915 167.126 140.4567 116.2716 95.04244
79.82731 1080 196.4115 168.6896 142.6231 118.8561 97.84281
85.66485 1140 197.1665 170.133 144.6316 121.2668 100.475
90.88461 1200 197.8646 171.4709 146.5004 123.5219 102.9546
95.5811 1260 198.5128 172.7156 148.245 125.6375 105.2953
99.83186 1320 199.1166 173.8773 149.8785 127.627 107.5092
103.7004 1380 199.6809 174.9649 151.4121 129.5026 109.607
107.239 1440 200.2099 175.9859 152.8558 131.2745 111.5983
110.4908 1500 200.707 176.9469 154.2178 132.9519 113.4916
113.4916 1560 201.1753 177.8535 155.5056 134.5429 115.2945
116.2716 1620 201.6176 178.7107 156.7257 136.0546 117.014
118.8561 1680 202.0362 179.5227 157.8838 137.4933 118.656
121.2668 1740 202.433 180.2935 158.985 138.8647 120.2263
123.5219 1800 202.8099 181.0264 160.0337 140.1738 121.7297
125.6375
127.627
129.5026
131.2745
132.9519 2 4 6 8 10
134.5429 60 113.4916 47.88761 25.1962 20.58817 20.03976
136.0546 120 142.6231 79.82731 43.33849 27.17807 21.72364
137.4933 180 156.7257 99.83186 60.32465 37.4643 26.44199
138.8647 240 165.4246 113.4916 74.02826 47.88761 32.79352
140.1738 300 171.4709 123.5219 85.04865 57.3966 39.59404
360 175.9859 131.2745 94.06864 65.82629 46.27005
420 179.5227 137.4933 101.5951 73.25827 52.58604
480 182.3902 142.6231 107.985 79.82731 58.46463
540 184.7759 146.9476 113.4916 85.66485 63.89883
600 186.8011 150.6571 118.2975 90.88461 68.91153
660 188.5483 153.8845 122.5378 95.5811 73.53668
720 190.0758 156.7257 126.314 99.83186 77.81079
780 191.4261 159.2519 129.7044 103.7004 81.76907
840 192.631 161.5173 132.77 107.239 85.44391
900 193.7149 163.5638 135.5591 110.4908 88.86438
960 194.6967 165.4246 138.1108 113.4916 92.05631
1020 195.5915 167.126 140.4567 116.2716 95.04244
1080 196.4115 168.6896 142.6231 118.8561 97.84281
1140 197.1665 170.133 144.6316 121.2668 100.475
1200 197.8646 171.4709 146.5004 123.5219 102.9546
1260 198.5128 172.7156 148.245 125.6375 105.2953
1320 199.1166 173.8773 149.8785 127.627 107.5092
1380 199.6809 174.9649 151.4121 129.5026 109.607
1440 200.2099 175.9859 152.8558 131.2745 111.5983
1500 200.707 176.9469 154.2178 132.9519 113.4916
1560 201.1753 177.8535 155.5056 134.5429 115.2945
1620 201.6176 178.7107 156.7257 136.0546 117.014
1680 202.0362 179.5227 157.8838 137.4933 118.656
1740 202.433 180.2935 158.985 138.8647 120.2263
1800 202.8099 181.0264 160.0337 140.1738 121.7297
100

90

80

70

60

6
50
8
10

40

30

20

10

0
0 200 400 600 800 1000 1200
 Impact of Design Changes ($/pizza)

40

37

34

31 10
13
28 16
19
22
25
25
28
22
31
34
19 37
40
16

13

10

6 6.5 7 7.5 8 8.5 9 9.5 10 10.5 11 Pizza Diameter

Pizza Thickness