Kristen's Cookie Company

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Kristen’s Cookie Company
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Sunset Team 4|

A. Dobo, F. Montoya, L. Lie, A. Bustamante, M. Chitipiralla, E. Dzelzkalns 1/21/2013
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Process Chart

Figure 1: Kristen’s Cookie Co. Process Flow Chart
1. How long will it take you to fill a rush order?
A rush order will take 26 minutes to fulfill, as illustrated in the Gantt chart below.

Figure 2: Rush-order Gantt chart
2. How Many Orders can you fill in a night assuming you are open four hours each night? a. Assuming steady state at the beginning of the period and no limitation on the number of trays and mixers: * Order time of first order is 26 minutes.

* Second order is fulfilled by the 36th minute
* Steady-state rate is 1 dozen per 10 minutes
* Hourly steady-state production is 6 dozen per hour
* Production per night is 24 dozen per night

b. Assuming a start at the beginning of the period and no limitation on the number of trays and mixers: * Order time of first order is 26 minutes.
* Second order is fulfilled by the 36th minute
* Steady-state rate is 1 dozen per 10 minutes
* First hour production is 3 dozen.
* Hourly production thereafter is 6 dozen per hour
* Production per night: (240-26) / 10 = 21 dozen per night

3. How much of your own and your roommate’s valuable time will it take to fill each order? Based on the table below of resource utilization per order:
* Kristen – 8 minutes per order
* Roommate – 4 minutes per order
Process| Order| Mix| Spoon| Load and Bake| Cool| Pack| Pay|  | Flow Time| 0| 6| 2| 10| 5| 2| 1|  |
Hourly Capacity|  | 10| 30| 6| 12| 30| 60|  |
 |  |  |  |  |  |  |  |  |
Resource|  |  |  |  |  |  |  | Total Mins|
Kristen| 0| 6| 2| 0| 0| 0| 0| 8|
Roommate| 0| 0| 0| 1| 0| 2| 1| 4|
 |  |  |  |  |  |  |  |  |
Mixer| 0| 6| 2| 0| 0| 0| 0| 8|
Spoon| 0| 0| 2| 0| 0| 0| 0| 2|
Oven| 0| 0| 0| 10| 0| 0| 0| 10|
Tray| 0|  | 2| 10| 5|  |  | 17|

4. Because your baking trays can hold exactly one dozen cookies, you will produce and sell cookies by the dozen. Should you give any discount for people who order two dozen cookies, three dozen cookies, or more? If so, how much? Will it take any longer to fill a two-dozen cookie order than a one-dozen cookie order?

a) A discount could be given for orders of two and three dozen cookies. Larger orders will reduce the amount of time Kristen needs to spend in the mixing part of the process. However, all other costs are the same. The savings may not be that significant, but if Kristen wants to offer the promotion, especially at the beginning stage of her business when she is trying to attract new customers, we offer the discount rates below, based on the amount of labor put into the process. However, we also note that the entire flow time for two dozen cookies is 36 minutes (which is the same as if we had 2 different orders, assuming orders were in queue), and for three dozen it is 46. This because of the oven bottleneck. In fact, she may actually want to discourage larger orders at an early stage of her business, so that more new customers can try (and fall in love with) her cookies. If Kristen gets a second oven (or determines that all she needs is a second oven rack), then it would be more beneficial to offer the discount rate, because then her hourly capacity would be 60/10 x 2 = 12 dozen cookies versus the 10 dozen per hour capacity she currently has.

b) The table below presents our proposed discount structure, while maintaining a 15% profit margin.  | One Dozen| Two Dozen| Three Dozen|
Resource|  |  |  |
Kristen (mins)| 8| 10| 12|
Roommate (mins)| 4| 7| 10|
Ingredients| 1| 2| 3|
Box| 1| 2| 3|
TOTAL Cost| $3.10 | $4.80 | $6.50 |
Non-discounted Price| $3.10 | $6.20 | $9.30 |
Discounted Price (15% margin)| $3.65 | $5.65...
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