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Solution to Kristen's Cookie Company (A)

Before answering specific questions, it is useful to make a diagram of


the overall process:

Wash Bowl, Mix Ingredients Fill Tray


Order Resource: Self Resource: Roommate
Entry Capacity: 3 Capacity: 1
Cycle Time: 6 minutes Cycle Time: 2 minutes

Start Oven
Resource: Roommate, Oven
Capacity: 1
Cycle Time: 1 minute

Bake
Resource: Oven
Capacity: 1
Cycle Time: 9 minutes

Cool Remove
Resource: none Resource: Roommate
Capacity: 1 Capacity: 1
Cycle Time: 5 minutes Cycle Time: 0 minutes

Pack, Collect Money


Resource: Roommate
Capacity: 1
Cycle Time: 3 minutes

Note that in this diagram, activities are arranged in columns to indicate


which resources are being used. Inside each activity symbol are
written the capacity (in dozens of cookies) and the cycle time (in
minutes).
1. How long will it take for you to fill a rush order?
Assuming this order is for one dozen cookies, we will need to do the
following:
Activity Resource Cycle Time Start Finish Time
Time
Order Entry E-mail 0 minutes 00:00 00:00
Wash Bowl, Mix Self 6 minutes 00:00 06:00
Fill Tray Self 2 minutes 06:00 08:00
Prepare Oven Roommat 1 minute 08:00 09:00
e
Bake Oven 9 minutes 09:00 18:00
Remove Roommat 0 minutes 18:00 18:00
e
Cool None 5 minutes 18:00 23:00
Pack, Collect Roommat 3 minutes 23:00 26:00
Money e
Therefore, the minimum time to fill an order is 26 minutes. We can
illustrate the sequence of events with a Gantt chart:

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2. How many orders can you fill in a night, assuming you are open four
hours each night?
Here is a Gantt chart for two batches of one dozen cookies each. It
doesn't take twice as long to produce two batches as it does to
produce one batch, because you can start mixing the second batch
without having to wait for the whole first-batch process to be
completed (you can start washing out the bowl as soon as you finish
filling the tray). It is possible to produce two batches in 36 minutes.

In general, a formula for the number of minutes to produce n one-


dozen batches is given by this expression:
16+ 10n

3. How much of your own and your roommate's valuable time will it
take to fill each order?
For yourself:
Activity Cycle Time
Wash Bowl, Mix 6 minutes
Fill Tray 2 minutes
Total 8 minutes
For your roommate:
Activity Cycle Time
Prepare Oven 1 minute
Remove 0 minutes
Pack, Collect 3 minutes
Money
Total 4 minutes
This is assuming all orders are for one dozen cookies.

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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 any longer to fill a two-dozen
cookie order than a one-dozen cookie order?
First, let's consider costs. The cost of ingredients and the box are the
same, no matter how many dozen you bake. So the only resource that
might differ with the size of the batch is labor.
One Dozen
Activity Resource Cycle Time Start Finish Time
Time
Order Entry E-mail 0 minutes 00:00 00:00
Wash Bowl, Mix Self 6 minutes 00:00 06:00
Fill Tray Self 2 minutes 06:00 08:00
Prepare Oven Roommat 1 minute 08:00 09:00
e
Bake Oven 9 minutes 09:00 18:00
Remove Roommat 0 minutes 18:00 18:00
e
Cool None 5 minutes 18:00 23:00
Pack, Collect Roommat 3 minutes 23:00 26:00
Money e

Self 8
Roommate 4
Total Labor 12
Minutes

Two Dozen
Activity Resource Cycle Time Start Finish Time
Time
Order Entry E-mail 0 minutes 00:00 00:00
Wash Bowl, Mix Self 6 minutes 00:00 06:00
Fill Tray 1 Self 2 minutes 06:00 08:00
Fill Tray 2 Self 2 minutes 08:00 10:00
Prepare Oven 1 Roommat 1 minute 08:00 09:00
e
Bake 1 Oven 9 minutes 09:00 18:00
Remove 1 Roommat 0 minutes 18:00 18:00
e
Cool 1 None 5 minutes 18:00 23:00
Prepare Oven 2 Roommat 1 minute 18:00 19:00
e
Bake 2 Oven 9 minutes 19:00 28:00
Remove 2 Roommat 0 minutes 28:00 28:00
e
Cool 2 None 5 minutes 28:00 33:00
Pack 1 Roommat 2 minutes 23:00 25:00
e

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Pack 2 Roommat 2 minutes 33:00 35:00
e
Collect Money Roommat 1 minute 35:00 36:00
e

Self 10
Roommate 7
Total Labor 17
Minutes
Three Dozen
Activity Resource Cycle Time Start Finish Time
Time
Order Entry E-mail 0 minutes 00:00 00:00
Wash Bowl, Mix Self 6 minutes 00:00 06:00
Fill Tray 1 Self 2 minutes 06:00 08:00
Fill Tray 2 Self 2 minutes 08:00 10:00
Fill Tray 3 Self 2 minutes 06:00 08:00
Prepare Oven 1 Roommat 1 minute 08:00 09:00
e
Bake 1 Oven 9 minutes 09:00 18:00
Remove 1 Roommat 0 minutes 18:00 18:00
e
Cool 1 None 5 minutes 18:00 23:00
Prepare Oven 2 Roommat 1 minute 18:00 19:00
e
Bake 2 Oven 9 minutes 19:00 28:00
Remove 2 Roommat 0 minutes 28:00 28:00
e
Cool 2 None 5 minutes 28:00 33:00
Prepare Oven 3 Roommat 1 minute 28:00 29:00
e
Bake 3 Oven 9 minutes 29:00 38:00
Remove 3 Roommat 0 minutes 38:00 38:00
e
Cool 3 None 5 minutes 38:00 43:00
Pack 1 Roommat 2 minutes 23:00 25:00
e
Pack 2 Roommat 2 minutes 33:00 35:00
e
Pack 3 Roommat 2 minutes 43:00 45:00
e
Collect Money Roommat 1 minute 45:00 46:00
e

Self 12
Roommate 10
Total Labor 22
Minutes
Let's assume your time is worth $12 per hour. Your labor costs would
be:
# Cookies in Minutes Cost Cost per

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Batch Dozen
1 dozen 12 $2.4 $2.40
0
2 dozen 17 $3.4 $1.70
0
3 dozen 22 $4.4 $1.47
0
It looks like you could afford to give a discount for two- and three-
dozen orders. A two-dozen order doesn't cost twice as much as a one-
dozen order.

5. How many food processors and baking trays will you need?
The number of baking trays ought to equal the maximum number of
trays you will be using at any one time. The highest volume production
imaginable would be if we produced three-dozen orders continuously, a
scenario depicted in this Gantt chart:

It's hard to read the activities along the left axis because they are
jammed together, but the food processor is only used in the mixing
stage, and we ought to be able to see that the processor is idle for long
periods of time, and that the real bottleneck is the oven. Buying
another food processor won't improve the productivity of the system at
all.
There are only three kinds of activities that require a tray: filling the
tray, baking (including preparing the oven), and cooling. The Gantt
chart shows that we are using at most three trays in the filling activity

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at any given time (and in fact this is only because this particular plan
calls for filling three trays in rapid succession, after which two of them
sit waiting for an opportunity to get into the oven). There is never more
than one tray in the oven at any given time, nor is there ever any more
than one tray cooling. So we could certainly get by with five trays, and
maybe four or even three if we adjust the mixing and filling part of the
operation.
On the other hand, trays are cheap, and it would be a shame if we ever
had to keep the oven (the bottleneck) waiting for lack of a tray. It is
reasonable to have "plenty" of trays on hand, whether that means five,
or ten, or whatever.

6. Are there any changes you can make in your production plans that
will allow you to make better cookies or more cookies in less time or at
lower cost? For example, is there a bottleneck operation in your
production process that you can expand cheaply? What is the effect of
adding another oven? How much would you be willing to pay for an
additional oven?
The bottleneck is the oven, which means there is no point in looking at
expanding the capacity of any other resource unless the operation's
baking capacity is expanded first.
If we had two ovens, we could make cookies faster. But how much
faster?
This gets complicated, but we can think about it by looking at the
capacities of the various stages in our process:
Dozens per Dozens per
Hour Hour
Stage Time (1 Oven) (2 Oven)
Wash Bowl, Mix, Fill Tray 12 min. for 3
(yourself) dozen 15 per hour 15 per hour
Prepare Oven & Bake 30 min. per 3
(oven) dozen 6 per hour 12 per hour
Prepare Oven, Pack, Collect
Money 10 min. per 3
(roommate) dozen* 18 per hour 18 per hour
* all in one order

Even with the second oven, the oven stage will still be the bottleneck.
To decide how much we would be willing to pay for another oven, we
would have to do some more complicated analysis (including finding
out what the distribution of orders would look like — how many for one
dozen, how many for two dozen, etc.). Then we could project the
increase in revenue and perform some present value analysis on the
incremental improvement in our revenue.

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Here is a Gantt chart for one two-dozen order:

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