Kristen's Cookies Company

Topics: Rate equation, Discount rate, Baking Pages: 7 (1795 words) Published: September 25, 2008
Process Flow Diagram

Case Questions

1.How long will it take you to fill a rush order?

Time taken to fill a rush order= MLT
= 6 + 2 + 10 + 5 + 2 + 1
= 26 minutes

2.How many orders can you fill in a night, assuming you are open four hours each night?

4 hours per each night= 4 hours * 60 minutes
= 240 minutes

Cycle Time= The Duration of the bottleneck
= (Setting thermostat and Timer) + (Baking Cookies)
= 1 minute + 9 minute
= 10 minutes

Maximum no of orders we can fill in a night= (No of minutes per night-Duration of First Setup) /
Cycle Time + 1
= ((240 – 26) / 10) + 1
= 22.4 orders
~ 22 orders

Explanation: This is because the first order takes 26 minutes for the first batch of cookies to finish and each subsequent batch takes 10 minutes because it has reached steady state. Thus, we take 4 hours worth of time, minus off 26 minutes for the first batch and then divide by ten to get the number of orders.

3.How much of your own and your roommate’s valuable time will it take to fill each order?

Own Time:

Mixing Ingredients6 minutes
Dishing out cookies onto tray2 minutes

Total Time8 minutes

Roommate’s Time:

Setting thermostat and timer1 minutes
Packing the cookies2 minutes
Collecting payment1 minutes

Total Time4 minutes

Explanation: Our group defines valuable time as time that can be used to do other kinds of productive work. Hence, processes carried out by me, mixing the ingredients and dishing the cookies onto the tray, takes up 8 minutes of my valuable time. This is because I have to be physically present and be doing “work”. However, only 4 minutes of my roommate’s valuable time is used because the 9 minutes (baking of cookies) and 5 minutes (cooling the cookies) can be used to do other more productive work.

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 you any longer to fill a two-dozen cookie order than a one-dozen cookie order?

It depends whether the two-dozen cookie order and three-dozen cookie orders are of the same flavor or different ones. However, we assume that orders that are more than one-dozen cookies are of the same flavor. This is because if the orders are of more than one-dozen cookies but of different flavours, each batch will come out exactly 26 minutes later because we have to re-mix the ingredients again.

Given that the orders of more than one-dozen cookies are of the same flavor, we should give a discount. Our discount is based on how much of our valuable time identified in part (c) that we have used in the process of baking the cookies.

Both my roommate and I have decided to value our own time at $10/hr.

My TimeRoommate’s TimeTotal Time
One-dozen cookies8412
Two-dozen cookies10717
Three-dozen cookies121022

Therefore, we decided that we will offer the discount based on the amount of time it saves us. We will be using this formula to offer the discount rate tn

Discount Rate =n*p + tn
n*p + n*t

Wheren=number of boxes
p= cost price of 1 box of cookies
tn= time-value of money used to make n boxes of cookies
t= time-value of money used to make 1 boxes of cookies

Therefore, our final discounted rate would be

Percentage Reduction
(%)Old Price (per box)New Price (per box)
One-dozen cookies0$2.70$2.70
Two-dozen cookies21.48$2.70$2.12
Three-dozen cookies28.88$2.70$1.92

5.How many food processors and baking trays will you need?

We will need 1 food processor and 6 baking trays. This is because even if we increase the number of food processors, the bottleneck is still the oven and this will only cause an excess on the number of...
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