RESOLUTION OF QUESTIONS KRISTENS COOKIE COMPANY

Student : Grecia Azucena Delgado Muoz

Teacher : Jose de la Puente
Course : Planning and Control of Operations
Career : Industrial Engineer
College : UTEC

INTRODUCTION
Kristen's Cookie Company, is a factory of homemade cookies, founded by a couple of young
housemates in Soldiers Field Park, which offer a different traditional cookies for first grade students.
The project consists of cookies against order, delivering fresh cookies from the oven and with a
delivery time of less than an hour and where, in addition, the customer chooses the combination of
ingredients, providing a product customized to the customer.

PROBLEM
Evaluate the preliminary design of the production process, taking into account costs, prices and
ability to receive orders, to earn money.

DATA
RESOURCES

Two people
An oven
A mixer
Trays and spoons

FIXED COSTS

Electricity included in rent Floor

VARIABLE COSTS

Ingredients = 0.60 / dozen

packing boxes = 0.10 / dozen

LABOR COSTS

10 $/per hour

QUESTIONS LABORATORY 1
1. Using Excel installed on the computer, build a Gantt diagram with a feasible
Production Plan for a dozen cookies

2. What do you see? What is the Manufacturing Lead Time (MLT)?

Production time of 1 dozen cookies (MLT) -> 26 minutes

Bottleneck (long process and limits the ability) -> oven (9 + 1) = 10 minutes

Maximum production capacity in 1 hour with the current system: 60 min/10 min
(bottleneck) = 6 dozen per / hour

Production per night = 4x60 = 240/10 = 24 but you have to subtract 26 min of the first
exit = 214/10 = 21.4 + 1 = 22 dozens / night

Time spent in direct labor

Kristen
Wash and Mix
Place on trays
Total

Time
6 min
2 min
8 min

Partner
Prepare oven
Packaged Cookies
Charge
Total

Time
1 min
2 min
1 min
4 min

Note (*): Total hours of direct labor for 1 dozen are 12 minutes

3. Repeat the previous exercise with successive sequences of dozen cookies

4. What do you see? What is the product Cycle Time (CT)?

Manufacturing Lead Time (MLT) -> 26 minutes

The Cycle Time is -> 10 min

Bottleneck (long process and limits the ability) -> oven (9 + 1) = 10 minutes

Time spent in direct labor

Kristen
Wash and Mix
Place on trays
Total
Partner
Prepare oven
Packaged Cookies
Charge
Total

Time
6 min
4 min
10 min
Time
2 min
4 min
1 min
7 min

Note (*): Total hours of direct labor for 2 dozen are 17 minutes

5. Repeat the previous exercise with successive sequences of two dozen cookies, each
time

6. What do you see? What is the order Cycle Time (CT)?

Manufacturing Lead Time (MLT) -> 36 minutes

The Cycle Time is -> 20 min

Time spent in direct labor

Kristen
Wash and Mix
Place on trays
Total

Time
6 min
4 min
10 min

Partner Time
Prepare oven 2 min
Packaged Cookies 4 min
Charge 1 min
Total 7 min
Note (*): Total hours of direct labor for 2 dozen are 17 minutes
7. In what cases could you do just all processes and dismiss your partner (reducing the
workload on these tasks?
Because all the tasks have to be done by Kristen alone, his time for one dozen cookies
becomes 12 minutes, which exceeds the previous 10 minute cycle time for one dozen
cookies. In this case, Kristen becomes the bottleneck.
However, if the order contains two dozens of the same kind of cookie, the washing and
mixing can be done together, so her time for this order becomes 17 minutes, which is less

than the previous of 20 minutes.

If the order is 3 dozen, it becomes 22 minutes. In

conclusion Kristen could do all the process alone if he do only two or three dozen per order.

8. Repeat the previous exercise with successive sequences of three dozen

cookies, each time
9.
10.

11.

12.
13.
14.
15.
16. What do you see now? What is the order Cycle Time (CT)?

Manufacturing Lead Time (MLT) -> 46 minutes

The Cycle Time is -> 30 min

Time spent in direct labor

17. Kristen

18. T

i
m
19. Wash and

e
20. 6

Mix

21. Place on

in
22. 6

trays

23. Total

in
24. 1
2
m
i
n

25.
26. Partner

27. T
i
m

28. Prepare

e
29. 3

oven

30. Packaged

in
31. 6

Cookies

32. Charge

in
33. 1
m

34. Total

in
35. 1
0
m
i
n

36.
37.

Note (*): Total hours of direct labor for 3 dozen are 22 minutes

38.
39. How long will it take you to fill a rush order?
40.

It will take 26 min.

41.
42. Activity

43. Resource

44. Cycle
Time

45. Start
Time

46. Finish
Time

47. Order

48. E-mail

49. 0 min

50. 00:00

51. 00:00

Entry
52. Wash/Mix
57. Spooning
62. Heat

53. Kristen
58. Kristen
63. Roommat

54. 6 min
59. 2 min
64. 1 min

55. 00:00
60. 00:06
65. 00:08

56. 00:06
61. 00:08
66. 00:09

Oven
67. Bake
72. Remove

e
68. Oven
73. Roommat

69. 9 min
74. 0 min

70. 00:09
75. 00:18

71. 00:18
76. 00:18

Cookies
77. Cool
82. Pack

e
78. Tray
83. Roommat

79. 5 min
84. 2 min

80. 00:18
85. 00:23

81. 00:23
86. 00:25

87. collect $$

e
88. Roommat

89. 1 min

90. 00:25

91. 00:26

e
92.
93. How many orders can you fill in a night, assuming you are open four hours each night
94.

Production per night = 4x60 = 240/10 = 24 but you have to subtract 26 min of the first
exit = 214/10 = 21.4 + 1 = 22 dozens / night

95.
96.
97.
98.
99.
100.
101.
102.
103.
104.
105.
106.
107.
108.
109.
110.
111.
112.
113.
114.
115.

How much of your own and your roommates valuable time will it take to fill

each order?

116.

Each order it will take 12 min of our valuable time.

117.
118.
119.
120.
121.
122.
123.
124.
125.
126.
127.

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
you any longer to fill a two-dozen cookie order than a one-dozen cookie order?
128.
129.

All costs of ingredients and boxes for each dozen are the same (material 0.60$ /

dozen and boxes 0.1$ / dozen). Also the labor cost is 10 $ per hour thats means 0.16667 $
per minute.
130.

The time for:

131.

One dozen: 12 min

132.

Two dozen: 17 min

133.

Three dozen: 22 min

134.

Whit this data we can make the following table:

135.
136.

137.

138.

139.

140.

141.

142.

Min

La

Labor

Material

To

Poten

Cooki

Co

Cost

ti

es in

st

per

al

batch

per

dozen

do

is

zen

c
o

u
143.

144.

145.

146.

147.

148.

nt
149.

1 dozen

12

$2

$2.00

$0.70

$2

$0

150.

151.

152.

153.

154.

155.

156.

2 dozen

17

$2

$1.41

$0.70

$2

$0.59

157.

158.

159.

160.

161.

162.

163.

3 dozen

22

$3

$1.22

$0.70

$1

$0.78

164.
165.

How many food processors and baking trays will you need?

166.
167.

We need only one mixer, because the case says that the mixer have a capacity for a

3 dozen. We need 3 trays because our maximum capacity is 3 dozen and finally we need
one spoon.
168.
169.
170.
171.

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 to rent an additional oven?
172.

173.
174.
175.
176.

If we buy or rent other oven or capacity increase in

60/8=7.5 dozen per hour. That means more money:

177.
Note: the cost of our cookies is 5$ per dozen
178.
179.
With one oven
180.
Gain per night= 5$*22 dozen=110 $/per night
181.
Cost per night= 2.7$*22 dozen= 59.4 $/per night
182.
Utility per nigh= 50.6 $/ per night
183.
184.
With two ovens
185.
Gain per night= 5$*27 dozen=135 $/per night
186.
Cost per night= 2.7$*27 dozen= 72.9 $/per night
187.
Utility per nigh= 62.1 $/ per night
188.
189.
We can pay to rent =62.1-50.6=11.5 $/ per night
190.
But we are disposed to pay a rent in 10$ / per night

195.

= 200$/ per month.

191.
192.
193.
194.
What happens if you are trying to do this by yourself without a
roommate?
196.
197.

Because all the tasks have to be done by Kristen alone,

his time for one dozen cookies becomes 12 minutes, which

exceeds the previous 10 minute cycle time for one dozen cookies.
In this case, Kristen becomes the bottleneck.

198.

However, if the order contains two dozens of the same kind of cookie, the washing

and mixing can be done together, so her time for this order becomes 17 minutes, which is
less than the previous of 20 minutes. If the order is 3 dozen, it becomes 22 minutes. In
conclusion Kristen could do all the process alone if he do only two or three dozen per order.
199.
200.
Should you offer special rates for rush orders? Suppose you have just put a
tray of cookies into the oven and someone calls up with a crash priority order for a
dozen cookies of a different flavor. Can you fill the priority order while still fulfilling
the order for the cookies that are already in the oven? If not, how much of a premium
should you charge for filling the rush order?
201.
202. The time that the rush order will delay is only at most 1 minute. And the previous
order can be finished on time. There is no need to offer a special rate.
203.
204.
When should you promise delivery? How can you look quickly at your order
board (list of pending orders) and tell a caller when his or her order will be ready?
How much of a safety margin for timing should you allow?
205.
206. We can promise delivery when we finish and become idle. The finish time, will be that
time, plus 26 minutes it takes to finish a one dozen order. At that time, they can promise
delivery.
207.
208.
I suggest an 8 minute safety margin for rush orders. The previous order would be
delayed by a max of 8 minutes to wash and mix the rush order. Time is 6 + 2 = 8 minutes
209.
210.
What other factors should you consider at this stage of planning your
business?
211.
212. Market: Is this attractive to potential customers?
213. Cost: How can we get cheaper materials with good quality?
214. Labor: Can I do this alone? Should I hire people?
215. Investment: What kind of initial and/or further investment is required?
216. Product: How can we make the cookies better?
217. Services: Can I provide other services, such as delivery?
218. Capital: What kind of equipment will I need?
219.
220.
Your product must be made to order because each order is potentially unique.
If you decide to sell standard cookies instead, how should you change the production
system? The order-taking process?
221.
222.

The cookies are unique at the beginning. If we sell standard cookies, the value added

products of the company change.

223.
- Bake cookies before receiving order.
224. - gOrder-taking process needs to change, as the customers dont need to call/email
and wait for pickup. They can visit the apartment directly to buy the product.
225.
- If a large sum is needed, customers can make order earlier, and provide deposit
226.
Create your own cookie menu

227.
228.
229.

230.

- Freeze balled cookies.

- Cookies can be ordered by number, and pulled from a freezer
- Cookies cooked and served fresh from the menu

QUESTIONS LABORATORY 2

231. Below is recording the arrival times of orders cookies one night when we had
opened Kristen's Cookie (remember that according to the case, the "store" is open from 6
pm to 10 pm ). All orders were a dozen.
232.
233.
234.
235.

236.
237.

Using the simulator installed on the computer, enter the above information and

appreciate the results. The simulator mode applies strictly meet first who asked first.
What you will appreciate?
238.
239. The simulator applies the FIFO methodology to meet their orders and this is reflected
in the program, because orders await the start time, so I conclude that if a care order for
each order. There is no urgent orders.
240.

241.
242.

Check the histogram processing time for each order at the end of the

spreadsheet simulator. It shows the average and maximum values of the times and the
average number of orders that has served our production of that night. What is
observed?
243.
244.

It is observed that there are dead times between the time of arrival and the start time

and this is because the cycle time is 10 min which also determines the time of arrival so that
they attend immediately should be given every 10 min , which does not happen in reality.
That is the reason why there are waiting times of 48 min and orders No.7 and No.14
245.
246.

In this case where orders not enter every 10 min, the maximum amount of dozens of

cookies that can be made is 20 but if orders from entering every 10 min could do 22, which
lowers our capacity 6 dozens / hour to 5 dozen / hour. And another consequence that orders
do not enter every 10 min is that average attention time will not do 26 min (as calculated
above) if not 38:48 min which means a growth of 48% in the waiting time.
247.

248.

249.

Turns out the order No. 6 asks to be treated as VIP therefore be placed ahead of

all orders are queuing at the time, changing places with the next order to be served
(they cannot "sneak" ahead of orders already in process). What effect does the
process? What effect does in relation to customers?

The first option is to swap the order 6 with order 4.

250.

The second option is to swap order 6 with order 5.

251.

the third option is to first change the order No. 6 with order No. 4 and depues the new
order No. 4 with order No. 5.

252.
253.
254.

The best option is the third because it is the least affected while waiting customers.
Repeat question 1 but now changing orders 3, 5, 7 and 8 by two dozen, three

dozen, three dozen and two dozen respectively. What effect caused?
255.

The effects that cause these changes were disastrous for delivery policy in an hour,

as it is not until fulfilled in some cases the delay is nearly two hours, as seen in the order No.
14.

256.

257.

258.
259.
260.

What conclusions did you come?

Kristen's Cookie Company should only receive 21 dozen at most four hours of

attention as to whether this number is exceeded an hour promise would not be met and
should change it to "as soon as possible".
261.
262.
263.
264.
265.
266.

267.
268.

What advice would you give to these friends?

269.
270.

Increase Total Production Capacity Per Night

271.

Purchase or rent an additional oven.

272.

Increase capacity of the bottleneck.

Increases cookie-making capacity.

Purchase several additional baking trays.

These items are inexpensive

Buying more ensures they are never a binding constraint.

273.
274.

Decrease Total Time Spent in Activity

275.
276.

Require immediate payment

Payment through PayPal, or similar service to eliminate

collect payment phase.

the ending