Kristen's Cookie Company Case write-up
Process flow diagram

Inputs Basic Dough, Ingredients
Output Cookies packed in boxes
Flow Units Cookies
Resources Kristen and her roommate, Oven, Spoons, Trays, Food Processor

Assumptions
1. An order is for a dozen cookies of any one type.
2. Kristen and her roommate work for 4 hours per day.

Q1. Time Taken for a rush order = Sum of time taken for Activities 1,2,3,4,5,6, and 7 for an order = 6 + 2 + 1 + 9 + 5 + 2 + 1 = 26 minutes

Q2. Process Capacity = minimum of time taken for all process steps. Process step capacity = # of resources / Activity Time ( The values for each step are mentioned in the process flow diagram above.) Hence Process Capacity = minimum ( 40,120,240,26.6,48,120,240) = 26.6 orders/day Or in other words, Kristen and her roommate can fill in 26.6 orders in four hours.

Q3. Time taken by Kristen for one order = Time taken by Kristen to perform activity 1 and 2 = 6 minutes + 2 minutes = 8 minutes.

Time taken by her roommate for one order = Time taken to perform activities 3,6, and 7 = 1 minute + 2 minute + 1 minute = 4 minutes.

Q4. Discounts can be given to people who order two dozen or more cookies. This is because, Activity 1 (wash bowl, add and mix ingredients) that is performed by Kristen will take only 6 minutes per order for a maximum order size of 3 dozen cookies. So Kristen will spend the same 6 minutes for activity 1 regardless of whether the order quantity is 1,2, or 3 dozens. Similarly, Activity 7 performed by Kristen's roommate will take 1 minute per order regardless of the order size.

So, The time taken for activity 1 and 7 together is 7...

...Kristen’s Cookies - Key Issues
Product Differentiation/ Core Competencies
n
Product features
n n n
variety/customization freshness convenience Low overhead Flexible labor - can study during idle time Location - access to targeted market
n
Competitive Advantages
n n n
What are the bottlenecks?
mix (6) spoon (2)
load (1) bake(9)
cool (5)
pack (2)
pay (1)
Resource Activity You mix spoon Oven bake R-mate oven load packing payment
Time 6 min 2 min 10 min 1 min 2 min 1 min
1 Doz. 7.5 6 15
2 Doz. 12 6 17.14
3 Doz. 15 6 18
QUESTIONS: • Who is the bottleneck for 1 Doz. orders? • Who is the bottleneck for 2 Doz. orders? • Who is the bottleneck for 3 Doz. orders?
How should we price the cookies?
Order Size Labor per Order Labor per Dozen* $10/hr (flexible) $8/hr (inflexible)
1 Doz 12 min 12 min $2.00 $2.66
2 Doz 17 min 8.5 min $1.42 $2.66
3 Doz 22 min 7.3 min $1.22 $2.66
Flexible labor can be reallocated to other work when not needed for cookie baking. Therefore, we only incur an opportunity cost for the time that flexible labor is activated for cookies. Inflexible labor cannot be re-allocated. Thus, we must pay workers their hourly wage whether they are activated or not.
If our unit costs are lower when we make more than one dozen at a time, perhaps we should pass on the savings to the customers
What if we had another oven?
load (1) bake(9)
mix (6)
spoon...

...4. Because your baking trays hold exactly one dozen cookies, you will produce and sell cookies by the dozen. Should you give discount for people who order two dozen cookies, three dozen cookies, or more? If so, how much? Will it take you longer to fill a two-dozen cookie order than a one-dozen cookie order?
• Discounts would be based on labor costs, not raw material cost since the case did not indicate that there are volume discounts for ingredient purchases
• There are no overhead costs – utilities are covered by landlord
• Assuming each cookie order (whether 1, 2 or 3 dozen) is for the same type of cookie:
i. 1 Dozen
• Requires 12 total labor minutes to produce
a. 8 minutes by Kristen: prepare (6 minutes) and spoon (2 minutes per dozen)
b. 4 minutes by roommate: set oven (1 minute per dozen), package (2 minutes per dozen), and accept payment (1 minute per order)
• This represents 1 labor minute per cookie (12 labor minutes / 12 cookies)
ii. 2 Dozen
• Requires 17 total labor minutes to produce
a. 10 minutes by Kristen: prepare (6 minutes) and spoon (4 minutes)
b. 7 minutes by roommate: set oven (2 minutes), package (4 minutes), and accept payment (1 minute)
• This represents 0.71 labor minutes per cookie (17 labor minutes / 24 cookies)
• This means that there was a 29% reduction in labor (1 – 0.71), which means that it cost us 29% less in labor. Therefore, we can discount...

...Kristen'sCookieCompanyKristen'sCookieCompany is a good example where the success or failure of the company depends directly on the process planning adopted by the company, i.e., the company can maximize its productivity by utilizing its resources effectively. One major aspect of process analysis is to identify the major bottlenecks in the process and trying to mitigate their effects with least possible level of costs and resources. The following flowchart shows the overall process adopted by the company: (Exhibit 1)
Filling a rush order:
Process Resource(s) Process Time Cumulative Time Consumed
Taking Order E-mail 0 minutes 0 minutes
Washing and Mixing Self 6 minutes 6 minutes
Filling Tray Self 2 minutes 8 minutes
Preparing Oven Roommate 1 minute 9 minutes
Baking Oven 9 minutes 18 minutes
Removing the tray Roommate 0 minutes 18 minutes
Cooling None 5 minutes 23 minutes
Packaging & Collecting Money Roommate 3 minutes 26 minutes
Thus, it requires minimum 26 minutes to fill a rush order.
Production Capacity (4 hours):
Since the resources required for the different processes are not common everywhere, there can be two orders (of one dozen each, for simplicity) being processed simultaneously. Thus, it would not require twice as much time for the second order (of one dozen) to be completed as it requires for the first...

...Kristen’sCookieCompany
We have studied Kristen’sCookie Company’s planned production process, and have drawn a number of conclusions based on our analysis. The understanding of our analysis will be facilitated by the following flow chart, which shows each step along the production process. The coloration denotes work performed by each member of the two-person workforce, and capacity and timing are specified below for each step:
From the above chart, we see that when the process is continuing at maximum efficiency, filling one order of a dozen cookies will take 26 minutes.
The oven will be a source of bottlenecking since its portion of the process lasts ten minutes while the preceding and ensuing steps require a total of eight minutes each. Below is a Gantt chart which clarifies this bottlenecking phenomenon. For simplicity, we have combined the removing and cooling step with the packaging step:
If we choose to consider the pure capacity of this production process (neglecting startup and finishing time), we see that, once the production is underway, each batch will add another ten minutes to production time. However, we see that from the moment the first batch goes into the oven (eight minutes after beginning operations), if we use the oven at maximum capacity without pause, and allow for the eight minutes required for cooling, packaging, and completing the transaction after taking...

...
OPIM 902 – Operations Management Case Analysis –
Kristen’sCookieCompany
Arif Durak, İlker Koç, Nihat Alpin Mütevellioğlu, Uğur Günal, Ersan Bilik
31 May 2014
1) How long will it take you to fill a rush order?
For an order that is for 1 dozen (or less) cookies with the same ingredients, it takes 26 minutes assuming the customer pays after packing. If they pay during the cooling period, a minute could be saved.
Time (minutes)
Operation
0
Take Order
6
Wash & Mixing
2
Spoon
1
Set Temp/Time
9
Bake
0
Remove from oven
5
Cool
2
Pack
1
Payment
26
Total
2) How many orders can you fill in a night, assuming you are open four hours each night ?
Max # of the orders that can be filled is related with the slowest operation which is baking due to both operation time & oven capacity (bottleneck)
Time (minutes)
Operation
Batch Per hour
6
Mixing
7,50
2
Spoon
1
Set Temp
6,00
9
Bake
5
Cool
12,00
2
Pack
30,00
1
Payment
60,00
Because operations for the next batch could be done in parallel with the current batch, the time required for a number of orders is 26 + 10 * (# orders – 1).
Therefore, for 1 order 26 minutes are required, for 2 orders 36 min.s are required, for 3 orders 46 minutes are required and so forth. (Assuming orders are for a dozen cookies and payment is made after packing)
4 hours = 240 minutes =...

...Kristen'sCookieCompany
1. How long does it take to fill a rush order [from mix and spoon, Load oven, bake, cool pack, and receive payment] ? (For orders of one dozen, and for orders of two dozens-same ingredients.)
Answer: (a) for orders of one dozen __________ minutes According to the specified work arrangements, a Gant Chart (Basic case 1) is developed as follow:
As obviously indicated from the above chart, it takes 26 minutes to fill a one dozen rush order.
Page 3 of 10
DSME2030A ASSIGNMENT 1 (b) for orders of two dozens __________ minutes Assuming the work arrangement has not been adjusted, a Gant Chart (Basic case 2) for two dozens orders is developed as follow.
Therefore, it takes 36 minutes to finish a two dozens rush order. 2. For orders of one dozen, how many orders can you fill in a night? Assuming 4 hours
per night Answer: We can find from basic case 1 that we will spend 10 more minutes with one more dozen ordered, because the oven has already been fully utilized and become bottleneck under this circumstance. We know that the roommate can prepare oven for baking the second dozen just after finishing baking the first dozen, during the 10 minutes when the oven is prepared and the second dozen is baking, the first dozen can be cooled and packed in 7 minutes, and the remaining 3 minutes are enough for collecting money, moreover washing, mixing and spoon for the second dozen can be finished during the...

...Kristen’sCookieCompany
Key Questions
1)
Washing & Mixing | 6 min |
Dishing Up | 2 min |
Setting the oven | 1 min |
Baking | 9 min |
Cooling | 5 min |
Packing | 2 min |
Accept Payment | 1 min |
Total | 26 min |
2) The oven holds only one tray (one dozen of cookies) => at full utilization we can cook only 6 dozen of cookies per hour, for example after washing and mixing we have two more minutes to wait before oven will free.
26 + 10(x-1)=240
X=22.4
22 orders per night
3)
My own | Roommate |
Washing & Mixing 6 min | Setting the oven 1 min |
Dishing Up 2 min | Packing 2 min |
| Accepting Payments 1 min |
8 min | 4 min |
4) Our variable costs are only ingredients (.60 per dozen) and boxes (.10 per dozen), no fix costs, because we don’t pay for electricity
Time consume
To produce 1 dozen we need 12 minutes (8+4), two dozen in same time 17 minutes (8.5 per 1 dozen), 3 dozen 22 minutes (7 min 20 seconds per one dozen)
Our working time decrease, when we produce 2 or 3 dozen, => we can give discount
The price of discount depends on how much we assess our time
5) Capacity of food processor is 10 dozen per hour, but oven’s capacity is only 6 dozen=> there is no need to buy one more food processor. We use tray, when we dishing cookies onto tray till packing. It takes 19 minutes. But if we decide to prepare 2 dozen, we need one more tray.
6) According to the...

...Case Report : Kristen’sCookieCompany (A1)
[pic]
Key Questions
1. To know the time it will take us to fill a rush order, we have to know how many dozens the rush order requires. If it is only one dozen, we need 6 minutes for the washing and mixing steps, 2 minutes for the spooning, 10 minutes for the whole baking, 5 minutes to cooling down, 2 minutes for the packing and 1 minute for the payment. That is to say : 26 minutes.
If we consider the order requires N dozens : we always need the first 8 minutes to do the washing and mixing steps and the spooning. As long as the oven can only contain 1 dozen, we need 10xN minutes for the baking of all of the N dozens. I can use the time my roomate needs to bake 1 dozen to produce new cookies (washing + mixing + spooning) if the next dozen order requires a different flavour or if I already made 3 dozens. Finally, my roomate can use the 9 minutes of each baking (except the first one) to do the cooling packing and payment of the previous dozen order. That is why, the time needed to fill a rush order of N dozens is : 8 + 10xN + 5 + 2 + 1 = 16 + 10xN minutes.
2. We assume we are open 4 hours each night. Using Question 1, we know we need 16 + 10xN minutes to fill a N dozens rush order. We want to maximize N knowing we have to have 16 + 10xN < 240. We easily find N = 22. We can fill 22 orders in a night.
3. For me : I only wash the mixer, mix ingredients and spoon the...