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2. How many orders can you fill in a night, assuming you are open four hours each night?
This equation is based on the bottleneck which is the baking process that can only handle a
dozen per 10 minutes:
3. How much of your own and your roommate’s valuable time will it take to fill each
order?
Time spent by me
= 6 minutes (mixing and baking) + 2 minutes (spooning)
= 8 minutes
6. 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 lower cost? For example, if there is a
bottleneck operation in your production process that you can expand cheaply? What is the
effect of adding another over? How much would you be willing to pay to rent another
oven?
The oven step is a bottleneck – it takes 10 minutes to process 1 dozen cookies, limiting
production to 6 dozens an hour. Using thinner cookies or a different recipe might make the
cookies bake faster, which would expand cookie production cheaply.
Adding an extra oven would be a more expensive way to increase production. It would increase
the baking step’s capacity to two dozen cookies every ten minutes. However, this would not
automatically double the overall production.
The cooling, packaging, and collecting payment steps can process two dozen cookies in (5 + (2 *
2) + 1) or 9 minutes, so this should not bottleneck the process.
The mixing and spooning steps are capable of matching the oven’s production of two dozen
cookies per ten minutes (6 minutes mixing, 2 minutes spooning per dozen). However, it can only
do this if both the cookie dozens contain the same ingredients. If each dozen contains different
ingredients, it will take 16 minutes to mix and spoon them both, making these steps the new
bottleneck. For this reason, discounts should be given to orders of two dozen cookies, so that
production can be maximized.
For the worst-case scenario of a 16-minute bottleneck:
= ((240 – 26) / 16) + 1 = ~14 orders of two dozen cookies, or 28 dozens
This is a 27% increase over the original maximum production of 22 dozens.
To calculate how much we’d be willing to pay for another oven, let’s look at how much
additional profits we could make. If we sell cookie dozens for $10.00 USD, we make around
$9.30 of profit per dozen. The worst-case scenario of 6 extra cookie dozens will produce $55.8
of extra profit per day.
A $3000 oven will pay for itself in just 54 working days, even in the worst-case scenario.
Because of this, $3000 is a reasonable price to pay for a new oven.