Kristen's cookie company

Operations Management- Kristen's cookie company Case Study

1. Kristen’s Cookie Company Team Members: Akrati Chauhan Girish Khatri Arpan Chhabra Rachna Gupta Dheriya Shrinivas Vaikunth Kossambe

2. PROCESS FLOW: KRISTEN'S COOKIE COMPANY

3. CASE STUDY ASSUMPTIONS Kristen and roommate have 1 oven and 3 oven trays. Spooning on tray of next batch is done simultaneously when baking of previous batch happens. When oven gets idle after removing previous batch, next batch cookies go in. K risten sells cookies at $1.5 /dozen. No additional delays other than mentioned in the case. Rush order is same as one dozen cookie order. Kristen and her roommate work simultaneously wherever possible. Efficiency of all resources especially of equipment is 100%. No additional costs incurred other then mentioned in assumptions or main question. Additional assumptions which are question specific are mentioned in solutions.

4. Questions & Solutions Process Description Time Taken Mixing the ingredients in a bowl (includes washing utensils from previous orders) 6 Taking out dough with spoon and spreading on Tray 2 Putting the cookies in oven and setting thermostat and timer 1 Baking the cookies 9 Removing the tray from oven and cooling 5 Packing the cookies in a box 2 Accepting Payment for the cookie box 1 Total 26 Minutes Q1: How long will it take to fill in the rush order? Answer: 26 minutes

5. Questions & Solutions Q2: How many orders can you fill in a night assuming you are open four hours each night? Answer: 22 orders

6. Questions & Solutions Q3: How much of your own and your roommate’s valuable time will it take to fill each order? Activity Time Mixing and washing 6 minutes Spoon out dough and lay on the trays 2 minutes Total 8 minutes Activity Time Setting timer 1 minute Packing 2 minutes Exchange of order and payment 1 minute Total 4 minutes Me (Kirsten) Roommate

7. Questions & Solutions Q4: Because your baking trays can hold exactly one dozen cookies, you will produce and sell cookies by the dozen. Should you give any discount to people who order two, three or more dozen cookies? If so, how much? Will it take you any longer to fill a two-dozen cookie order than a one dozen cookie order?

8. Questions & Solutions Q5: How many Electric Mixer and Baking Tray do we need? ELECTRIC MIXER: As the chart and case shows, electric mixer is IDLE for a long time during the production process, so ONLY ONE is needed. BAKING TRAYS: Because the mixer can only contain 3 dozen of ingredients, during the whole process, at least 3 TRAYS are needed. Answer:

9. Questions & Solutions Questions & Solutions Q6: Is there a bottleneck operation in your production process that you can expand cheaply? The bottleneck here is the Oven. Process involved Time taken (in minutes) Process involved Time taken (in minutes) 1 batch 2 batch Washing and mixing 6 Spoon dough into tray 2 1 [2-1(1 minute goes in setting thermostat)] Oven setup 1 1 Baking time 9 Cooling 5 Packaging 2 2 Collection money 1 1 Total Time 26 5 2 dozen using 1 oven takes 31 minutes Here, we can use two ovens instead of one. This will result in two dozen cookies being produced simultaneously. Thus, next batch will be delivered in next 5 minutes while other batches will be delivered in next 7 minutes. So, 2 ovens will increase the efficiency by 40% Price of 1 dozen = $1.5 Price of 22 dozen = 1.5 * 22= $33 Price of 31 dozen = 1.5 * 42=$ 46.5 Using an additional oven will help to generate Additional Revenue of $ 13.5 due to increase in our efficiency to take more orders in the same time. So, we can pay $ 2.7 to rent an additional oven which will count to 20 % of our additional revenue.

10. Thank you