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• Christian Haenseler

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Kristen’s cookie company 1. How long will it take you to fill a rush order?

The first production step is done by myself and consists to wash out the mixing bowl, prepare all of the ingredients and mix them in my food processors. I’m able to prepare ingredients for three dozen in this step, but it takes always six minutes if I cook one or three dozens. Secondly, I must dish up the cookies onto a tray, and this takes two minutes. As I can’t prepare several trays in the same time, it takes me two minutes per tray. Then, the next step is done by my roommate. He puts the cookies into the oven and sets the thermostat at timer, the whole takes a one little minute. Then, the cookies cook alone in the oven for nine minutes. After these nine minutes, the roommate removes the cookies from the oven and they cool outside for five minutes. When they are cool, the roommate takes two minutes to pack them in a box. Finally, for the last minute he accepts the payment and gives the cookies to the customer. To conclude, in adding every steps of the process production we can see that the Theoretical Flow Time is twenty-six minutes long. 2. How many orders can you fill in a night, assuming you are open fours hours each night? First we can see with this table the resource capacity of our resources. The oven has the weakest capacity (6 dozen per hour at full utilization). Therefore, the oven is the bottleneck of the process which means that the oven’s capacity represents as well the capacity of the whole process. Indeed, the entire process is done according to the oven. For example, when the washing and the mixing have been prepared, we must still wait that the oven is free. We represent that with a buffer time two minutes long. Finally, after a short observation we get to the conclusion that the cycle time is ten minutes long. We finish the first dozen and ten minutes late the second. To answer the question, we found this equation

26 + 10 (x-1) = 240  x = 22,4 26 minutes represents time required for the first dozen. 10 minutes is the cycle time multiply by x who is number of orders which could be filled in a night or the number of batches. But minus one because the first dozen is already counted in the 26 minutes. And 240 minutes is the time while the Kristen's Cookies is opened,

As we found 22,4, we can assume 22 orders per night. 3. How much of your own and you roommate’s valuable time will it take to fill each order? The steps done by ourselves are wash bowl, mix and put the mixture in the tray and take respectively six and two minutes. Then, the steps done by our roommate are preparation of the oven, leave the tray from oven and collect the money and take respectively one, zero and three minutes. These two sums represent our cycle time and this of our roommate. 4. Because your baking trays can hold exactly one dozen cookies, you will produce and sell cookies by the dozen. Should you give a discount for people who order two dozen cookies, or more? If so, how much? … First of all, to give a discount for people who order an extra dozen cookies (in this case 2 or 3 dozen) we have to analyze the production cost. And if we found that the production cost per dozen decrease when we produce at the same time more dozen cookies, then we can give a discount per extra dozen cookies produced. We don’t pay any fixed cost because is the landlord who pays the electricity. The variables costs are always the same (ingredients and boxes), so it doesn’t matter if we produce one or three dozen cookies at the same time because we always pay the same quantity per dozen produced. That’s mean that the only cost per dozen that change when we produce some dozens at the same time is the valuable working time. Like we said at the third question, our working time is 12 minutes to produce one dozen. When we produce two dozens at the same time we need 8.30 minutes per dozen produced (17min in total); and when we produce three dozens at the same time we need 7.20 minutes per dozen produced (22minutes in total): Washing & mixing Dishing up Setting the oven Baking Cooling Packing Payment

Resource 1 Dozen 2 Dozen 3 Dozen Myself 6min 6min 6min My self 2min 4min 6min Roommate 1min 2min 3min Oven 9min 18min 27min — 5min 10min 15min Roommate 2min 4min 6min Roommate 1min 1min 1min

In the first step where we wash and mix we always work for 3 dozens (even if we need to produce just one dozen), that’s why the work time doesn’t increase. In the same way, when our roommate receive the money he spends always 1 minute. So we know that the valuable working time per dozen decrease when we produce two or three dozens at the same time, that’s mean that we can give a discount in relation to the working minutes that we win when we produce two or three dozens at the same time. When we produce two dozens at the same time we win 3.30 minutes per dozen produced and 4.40 minutes dozen produced when we produce three dozens at the same time, that if we compare with the 12 minutes if we produce just one dozen.

Then we just have to give a value per hour to our work time to know how many dollars less we are going to sell one dozen when produce two or three at the same time. For example let say that we decide 20 dollars per hour (0.333333 per minute):

1 Dozen 2 Dozens 3 Dozens

Minutes 12 17 22

Cost 4 5.67 7.33

Per dozen 4 2.81 2.44

5. How many food processors and baking trays will you need? We use only the food processor during six minutes to mix ingredients. As the capacity is ten dozen per hour and this is more than the oven which is six dozen per hour, therefore adding one more would be useless. We need a baking tray from dishing the cookies onto the tray until packing each dozen, it lasts nineteen minutes. While the first tray is in the oven, we can prepare the second batch which needs also one tray. Right when the baking of the first dozen finishes, my roommate removes the cookies from the oven and replaces them with the second dozen. The use of the first tray will end after the cooling and the packing, which would be seven minutes later. The first tray is then available for the third batch. Like this we can see that it’s possible to turn with just two. But it would be useful to have a third if we have an ironic problem. 6. Are there any change you can make in your production plans that will allow you to make better cookies or more cookies in less time or at lower costs?... The oven is the bottleneck. That means that even if some resources would be added somewhere else (like buying additional food processors, trays or employing new staff), the oven would still be the bottleneck and it wouldn’t increase the production capacity. So, there is no way to make more cookies at low cost. By adding another oven, the total capacity for the ovens becomes 12 dozen / hour instead of 6. It remains the weakest, so the ovens are still the bottleneck, but capacity of the whole process has doubled. That means also that the cycle time has been reduced by half: 5 minutes per dozen instead of 10 minutes per dozen. So if the demand is so strong that it can't be met, the production capacity is insufficient and it would be quite interesting to rent an additional oven. What if the ingredients are different for each dozen? For the mixing stage, preparing 3 dozen with the same ingredients at one time was possible, but if the orders are such that 3 successive dozen have different ingredients, you can't prepare it at one time; you must do the mixing stage 3 times. Therefore, the total capacity for the food processor would be 10 dozen/hour instead of 30. In the same way, the total capacity for “myself” would be 7.5 dozen/hour instead of 15. Consequently, it's no more the oven's capacity which is the weakest, but it's “myself”. I become the bottleneck and the whole process capacity would be then 7.5 dozen / hour. That means that the cycle time would be 8 minutes. In this case, an additional oven means a cycle time of 8 minutes instead of 10, and a capacity of 7.5 dozen/hour instead of 5. That looks not so more interesting to rent an oven. So before taking a decision, I would recommend to examine carefully the demand and determine if there are many people who order several dozen with same ingredients at one time or not.