Operations Management Assignment

Submitted By:
Group 6

Ankit Bhargava 2021EPGP006

Karan Sehgal 2021EPGP021
Ravi Kumar 2021EPGP037
Suchit Agarwal 2021EPGP050
Vikram S Tiwari 2021EPGP055

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Overview
Swami and his roommate, Mani are preparing to start Malgudi Biscuits Company
(MBC) in his college hostels. The company will provide fresh Biscuits to starving
students late at night. Swami need to evaluate the preliminary design for the
company’s production process to figure out many variables, including what
prices to charge, whether Swami will be able to make a profit and how many
orders to accept.

To launch the business, Swami need to set prices and rules for accepting orders.
Some issues will be resolved only after Swami get started and try out different
ways of producing the Biscuits. Before Swami start, however, Swami at least
want a preliminary plan with as much as possible specified so that Swami can do
careful calculation of how much time Swami will have to devote to this business
each night and how much money Swami can expect to make. For example, when
Swami conduct a market survey to determine the likely demand, Swami will
want to specify exactly what your order policies will be. Therefore, answering he
following operational questions should help Swami:

Beginning our analysis by developing a process flow diagram of the Biscuits–

making process.

Process Flow Diagram

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Q.1) How much time it will take for Swami to fill an order of any
customer?

The total time taken to fill an order is

Time
taken (In
Steps Mins)
Taking order 0
Washing and Mixing ingredients 6
Dishing up 2
Baking 10
Cooling 5
Packing 2
Payment 1
Total 26 Min

So total time Swami will take to fill the order is 26 Min.

Q.2) How many orders can Swami fill in a night, assuming MBC is open
four hours each night?

Steps Time taken (Min) Cycle Time (Min)

Swami Tasks 8 8
Baking 10 10 (Bottleneck)
Cooling 5 5
Mani Tasks 3 3
Total 26 Min

Bottleneck – Baking with CT = 10 min

However, as the process is setup in the way that 8-8 min are required at the
staring and end of the process, and that time the other guy is forced to sit idle,
he can not do any work. So, the maximum number of orders per day are

16 + 10 N < = 240

N < = 22

So maximum number of orders Swami can fill is 22 dozen.

Q.3) How much of Swami’s and Mani’s valuable time will it take to fill each
order?

The valuable time of Swami & Mani are the actual time they were indulge in any
activity.

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 Below is the table to indicate the valuable time

Person Valuable Time (Min)/dozen Total time (Min) for 22 dozen

Swami 8 176
Mani 4 88
Total 12 Min 264

So, the total valuable time per day taken by Swami & Mani is 176 Min & 88 Min.

Q.4) Because your baking tray can hold exactly one dozen Biscuits, Swami
will produce and sell Biscuits by the dozen. Should Swami give any
discount for people who order two dozen Biscuits, three dozen Biscuits or
more? If so, how much? Will it take Swami any longer to fill a two-dozen
Biscuits order than one–dozen Biscuit’s order?

Let’s check that if anyone gave order of 2 dozen, will the total time to fill the order
decrease.

The cycle time for the whole process is 10 min. Taking single dozen or 2-3 dozen
order will not affect the cycle time of the process.

So, there is no optimisation in the process in case taking 2 or 3 dozen order. So,
no discount should be provided to such orders.

Q.5) How many foods processor and baking trays will Swami need?

The food processors required is 1 and the trays required are 3 (One for dishing,
one for baking and one for cooling).

Q.6) Are there any changes Swami can make in his production plans that
will allow him to make better Biscuits or more Biscuits in less time or at
lower cost? For example, is there a bottleneck operation in production
process that Swami can expand cheaply? What is the effect of adding
another oven? How much would Swami be willing to pay to rent an
additional oven from outside contactor?

Let’s analyse this assuming only singe dozen order is received throughout the day

Adding an oven will change the Cycle Time of Baking as 5 Min.

Now the Bottle neck is mixing + dishing (CT = 8 Min)

The total order can be filled after introducing 1 more oven = 240/8 = 30 dozen

So, introducing 1 more oven will help to produce extra 8 dozen.

The money Swami can rent for extra oven should be less than the contribution of
8 dozen of biscuits.

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Q.7) What happens if Swami is trying to do this by himself without his
roommate, Mani?

If swami will try to do all the work by himself that he will take 12 min and will
become the bottleneck for the process.

Total time of Swami = 6min(washing) + 2 min (dishing up) + 1 min (thermostat

setting) + 2 min (Packaging) + 1 min(payment) = 12 min.

But if order is for 2 dozen, total time requirement is 18 min of baking while 17
min of manual work by Swami. Hence bottleneck (order of 2 dozen or 3 dozen)
will be baking process.

Q.8) Should Swami offer special rate for rush orders? Suppose Swami
has just put a tray of Biscuits into the oven and someone call up with a
“priority” order for a dozen Biscuits of a different flavour. Can Swami fill
the priority order while still fulfilling the order for the Biscuits that are
already in the oven? If not, how much of a premium should Swami
charge for filling the rush order?

Let’s assume order received at the moment when Swami was just staring the
baking process of older order

As it will take 8 min for washing, mixing and dishing, Swami can continue with
the baking (older order) hence it will take 10 min to bake while at the same time
8 min to prepare priority biscuit raw material. So, a delay of 2 minute in overall
order fulfilling.

Previous order can be fulfilled on time, no need to offer special price.

Q.9) When should Swami promise delivery? How can Swami look quickly
at his order board (list of pending orders) and tells a caller when his or
her order will be ready? How much of a safety margin for timing should
Swami allow?

Swami can check the order board and find out when he would finish older order
and become idle.

They can promise the delivery by the finish time + 26 Min (time to finish 1 dozen
order).

Safety Margin: We can give safety margin of maximum 8 min, suppose the
order came, then in worst case Swami has to stop older order and process the
new order. The previous order would be delayed by maximum 8 Min (In case the
orders are coming in a dozen only).

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Q.10) What other factors should Swami consider at this stage of
planning your business?

Below factors can be considered at the stage of planning

 Product to be offered
 Increase operating efficiency
 Expand to acquire more market share
 Reducing Order time
 Price per order
 Compliance with industry norms

Q.11) MBC products must be made to order because each order is

potentially unique. If Swami decide to sell standard Biscuits instead,
how should Swami change the production system? The order-taking
process?

The changes in production system if swami change from made to order to

standard by

 Create a comprehensive Menu

 Take orders in advance through mail/SMS/Voice Call
 Bake cookies in advance as per Menu
 Freezer to store pre mixed ingredient and prepared cookies
 More trays & Mixer to avoid bottleneck

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