Kristen Cookies - Giovani Da Silveira

Question 1: How long does it take to fill a rush order?

First: Draw Process Flow Diagram with Processing Times

You

Mate [

Oven

WASH BOW AND

MIX INGR (6)

UNLOAD AND
COOL (5)

SPOON
INTO TRAIN (2)

PACK
(2)

PUT IN
OVEN (1)

HOLD

BAKE
(9)

RECEIVE
PAYMENT (1)

] Mate

] Mate

Second: Calculate Throughput Time = Sum of all processing times

TT = 6 + 2 + 1 + 9 + 5 + 2 + 1 = 26 minutes

Answer: It will take 26 minutes to fill a rush order

Question 2: How many orders can you fill if you are open 4 hours?

First: Find Bottleneck and Cycle Time

Since different stages of the process can process different orders in parallel, the throughput time
is not the relevant time to calculate capacity.

The capacity of the process as a whole equals the capacity of the slowest operation. This is called
bottleneck.

The bottleneck is in the oven: prepare + baking = 10 minutes. This is the cycle time.

Second: Calculate Process Capacity

1

The oven capacity is 6 trays/hour. Since we work 4 hours, the process capacity = 4 X 6 = 24
trays/day, assuming that the first 8 minutes before baking and the last 8 minutes after baking are
carried out during closing time.

Otherwise, the real capacity would be 3,73 hours X 6 trays/hour = 22.4 trays. 3,73 hours = {[(60
X 4) - 8 minutes] / 60}

Question 3: How much of your and your mates time will it take to fill each order?

First: Calculate Labor Time

You: 6 minutes (wash and mix) + 2 minutes (spoon) = 8 minutes

Mate: 1 minute (prepare oven) + 2 minutes (pack) + 1 minute (payment) = 4 minutes

Assumptions:

* Capacity is 100% occupied

* Each order equals 1 tray
(if one order = 3 trays, the first operation counts only once)

Second: Calculate Idle Time (If you work 8 minutes per order and your mate works 4 minutes per
order, how long have you two got for studying?)

Cycle Time = Oven Time, i.e. the time taken for completing each new order = 10 minutes

Idle Time = Cycle Time - Labor Time = 2 minutes (you) and 6 minutes (mate)

Question 4: Should you give discount for 2 or 3 dozen-cookie orders? Will it take any longer to fill
2 dozen than 1 dozen cookie orders?

First: Calculate Production Cost

Production Cost = Material Cost + Labor Cost

Material Cost = $ 0.60 (ingredients) + $ 0.10 (box) = $ 0.70 / dozen
Labor Cost: How much labor time it takes to fill a 1-dozen and a 2-dozen order?
Activity
Wash and Mix (you)

Type

Time

Setup

6 Minutes

Spoon (you)

Operation 2 Minutes

Put in oven (mate)

Operation 1 Minute

Pack (mate)

Operation 2 Minutes

Payment (mate)

Setup

1 Minute

So, for 1 dozen, we have to count all the activities once, that is 12 minutes labor time.

For 2 dozens, we should count the set-up activities only once, and the operations activities twice,
that is 7 (setup) + 5 (operation) + 5 (operation) = 17 minutes.

For 3 dozens, the time would be 22 minutes.

For 4-6 dozens, we need to repeat the wash and mix, since the mixing bowl can only hold
material for up to 3 dozens.

Assuming we charge $ 0.20 / minute to labor cost,

Cost 1 dozen = $ 0.70 (material) + ($ 0.20 * 12) = $ 3.10

Cost 2 dozens = $ 1.40 + ($ 0.20 * 17) = $ 4.80

Cost 3 dozens = $ 2.10 + ($ 0.20 * 22) = $ 6.50

Attention: we are assuming we should not pay for labor idle time; they should be doing some
other productive work, e.g. studying!

Gantt Chart

Look at the Gantt Chart. How long does it take to fill a 1-dozen and a 2-dozen order?

Where does the difference come from? Why is it 10 minutes only rather than 26 minutes?

Answer: 26 and 36 minutes.

The difference is in the oven time (bottleneck). The difference is only 10 minutes because
mixing and paying takes the same time for 2-dozens, while spooning, cooling and
packing can be performed while the oven is still operating.

Could you run the operation alone?

Only with 2 or more-dozen orders. Not with 1-dozen orders.

Remember the cycle time and labor time for 1 and 2-dozen orders:

Order Size
1 dozen +
1 dozen
2 dozens

Cycle Time

Labor Time

20 minutes
24 minutes (2 x 12; 7 minutes for mix and
(2 x 10 at oven) pay, 5 minutes for spoon, prepare oven and
pack)
20 minutes
17 minutes (mix and pay occurs only once;
(1 x 20 at oven) we have 7 + 5 + 5 minutes)
If you worked alone, with 1-tray orders you would be the bottleneck. You would only
deliver 1 dozen each 12 minutes. Capacity would fall from 6 dozens/hour to 5
dozens/hour.

In terms of money, you could save 4 minutes of your mates time. This is $ 0.20 x 4 = $
0.80/tray. Whether this is a good idea, depends on how much you charge for the cookies,
remembering that the cost of 1 dozen is $ 3.10.

For example, assume the price for one dozen was $ 3.50. In the present situation, income
in one hour would be $ 3.50 x 6 = $ 21.00. Profit would be $ 0.40 x 6 = $ 2.40. Working
alone, income in one hour would be $ 3.50 x 5 = $ 17.50. Profit would be $ 1.20 x 5 =
6.00. So, it would be much better working alone.

To find the price at which it is better working with your mate we need to find the value of
P (price) at which (P 3.10) x 6 > (P 2.30) x 5, i.e. profit in the first situation (working
with mate) is greater than profit in the second situation (working alone). Thus, P must be >
7.10 to justify working with mate.

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

Look at the Gantt Chart. Since baking is the bottleneck, you need only one food processor.
However, you will need more than one tray, assuming that the cookies will be on trays during the
spool (raw cookies) and cool (baked cookies) stages. Hence, you will need at least three baking
trays.

Question 6: What improvements can be suggested to improve quality, cost, or speed?

The first and most obvious suggestion is to buy or rent a new oven, which is also capable of
holding one tray at a time. Thus, baking capacity would increase from 6 to 12 trays/hour.

If we double the oven capacity, what happens to the system capacity?

If we look at the individual capacities, we will discover that the bottleneck will transfer from the
oven to the mix and spoon stage. Therefore, system capacity will increase to 7.5 trays per hour,
assuming orders of 1dozen.
Operation
Mix and Spoon
Oven
Cool
Pack
Payment

Time
8 minutes
10 / 2 = 5 minutes
5 minutes
2 minutes
1 minute

Capacity/hour
7.5 trays
12 trays
12 trays
30 trays
60 trays

If we have 2-dozen orders, mix and spoon would take 10 minutes for a 2-dozen (mix is performed
only once). Therefore, system capacity would increase to 12 trays-hour.

For 3-dozen orders, mix and spoon will take 12 minutes (i.e. 4 minutes for each tray). Bottleneck
would be oven and cooling; system capacity would stay in 12 trays-hour.

Therefore, system capacity depends on the size of individual orders.