Topics: Cost, Costs, Variable cost Pages: 3 (897 words) Published: September 11, 2007
Kristen's Cookie Company  Case write-up
Process flow diagram

Inputs  Basic Dough, Ingredients
Output  Cookies packed in boxes
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...