Kristens Cookie ( A1 )

Prof M G Korgaonker

Kristens Cookie ( A1 )
Q 1. How Long Will It Take You To Fill Rush Order ? Assume no other cookies are currently in process Calculate the time from the moment you begin a new batch of cookies with custom selected ingredients to the moment when the dozen cookies are packed into a box and payment is received from customer Look at the process flow diagram ( Figure A ). Throughput time is the sum of the times for each production step

Kristens Cookie ( A1 )
Q 1. How Long Will It Take You To Fill Rush Order ?

Total Bake Time = 10 mins

Mix and Spoon

Load oven, Set timer, Begin bake

Continue Bake

Hold

Cool

Pack

Receive Payment

Mins 8

Process Flow Diagram : One Order For One Dozen Cookies

Kristens Cookie ( A1 )
Sr No Operation Time, mins

1
2 3 4 5 6 7

Mix dough
Spoon out cookie dough on tray Load oven and bake Cool tray of cookies Pack cookies Receive payment Total

6
2 10 5 2 1 26

Throughput Time : Batch of One Dozen Cookies

Kristens Cookie ( A1 )
Q 2. How Many Orders Can You Fill In A Night, Assuming You Are Open Four Hours Each Night ? The 26 min throughput time is not the relevant number for calculating the number of cookies made during a given time

The capacity of the process as a whole must be calculated. This is equal the bottleneck capacity
The slowest step is baking, which takes 10 mins. You can produce one tray of dozen cookies every 10 mins

Kristens Cookie ( A1 )

10 mins is the cycle time for the whole process. The process cycle time is the same as the cycle time for bottleneck operation Cookie producing capacity = 1 dozen cookies / 10 mins = 6 dozen cookies / hr In a 4 hr night, if there are enough orders to keep you busy, max cookies produced = 6 * 4 = 24 dozen cookies

Kristens Cookie ( A1 )

After you open, some time is needed for start up and shut down. The first dozen cannot start until 8 mins after opening. The last dozen must come out of the oven 8 mins before closing Hence the actual number of cookies baked = 22 dozen In a steady state situation, no need to worry about start up and shut down time and the steady state capacity will be 24 dozen cookies

Kristens Cookie ( A1 )
Now change the order size. Assume every body orders 2 dozen cookies at a time The mixing time = 6 mins / order Spooning time on two trays = 2 * 2 = 4 mins/ order Loading and Baking time = 10 mins / dozen Cooling time = 5 mins / dozen Packing time = 2 min/ dozen Receiving payment = 1 min/order Bottleneck capacity is still baking capacity = 1 dozen / 10 min or 6 dozens / hr, independent of the order size

Kristens Cookie ( A1 )
Q 3. How Much Your Own And Your Roommates Valuable Time Will It Take To Fill Each Order ? The bottleneck is baking. Its capacity is much less than the other operations. So they have a lot of idle time

In each cycle of 10 mins, the room mate is working for time = 1 min oven loading + 2 min packing + 1 min receipt of payment = 4 min You are busy for time = 6 min mixing + 2 min spooning/tray= 8 min

Kristens Cookie ( A1 )

You will be busy for only 2 min if you are on 2 nd or 3 rd tray of a two dozen or more cookie order A profile of expected order sizes enables calculation of expected idle time. This assumes availability of enough orders to keep constantly busy If you have orders for less than 24 dozen cookies per night, you will have more idle time

Kristens Cookie ( A1 )
Q 4. Because Your Baking Trays Can Hold Exactly One Dozen Cookies, You Will Produce And Sell Cookies By The Dozen.

Should You Give Any Discounts For People Who Order 2 Dozen Cookies, 3 Dozen Cookies, Or More ? If So, How Much ?

Will It Take You Any Longer To Fill A 2 Dozen Order Than A 1 Dozen Order ?

Kristens Cookie ( A1 )

Proper price to charge depends on both the demand for your unique cookies and your production cost Demand is not easy to estimate with precision Production cost = cost of materials + cost of labour time Total labour time =sum of labour times in each of the process steps

Kristens Cookie ( A1 )
Set up time = 6 min for mixing + 1 min for receipt of payment = 7 min Run time = 2 min for spooning + 1 min for loading + 2 min for packing = 5 min Although cooling takes 5 min, it involves no labour Thus for 1 dozen cookie order, labour time = 12 min For a 2 dozen cookie order, labour time = 7 + 2 * 5 = 17 min For a 3 dozen cookie order, labour time = 7 + 3* 5 = 22 min

Kristens Cookie ( A1 )
Assume your time is valued at = $0.20 / min. Assume material cost = $ 0.70 / dozen cookies Production cost / dozen cookies = 12 * $ 0.20 + $0.7 = $ 3.1 / dozen cookies Production cost for the 2 dozen cookie order = $0.20 * 17 + 2*$0.7 = $ 3.4 + $ 1.4 = $ 4.8 Saving of $ 1.4 on two separate 1 dozen cookie orders, on account of set up time being same for 1 dozen and 2 dozen cookie orders

Kristens Cookie ( A1 )
Production cost for 3 dozen cookie order = $0.2 * 22 + 3 * $ 0.7 = $ 4.4 + $ 2.1 = $ 6.5 Saving on 3 separate 1 dozen cookie orders = 3 * $ 3.1 - $ 6.5 = $ 2.8. This is due to saving on the set up time of 14 mins Time available for you and your room mate ( for your studies ) rises from ( 10 * 2 12 )= 8 mins for 1 dozen order to ( 10 * 2 * 2 17 ) = 23 for two dozen order

Assumes idle time can put to productive use, such as studying

Kristens Cookie ( A1 )
Sequencing And Resource Conflicts A Gantt Chart helps answer questions about sequencing and timing. Figure B is the Gantt Chart for 1 order of 2 dozen cookies. Each rwo represents a different activity

The last 3 rows show how different resources ( you, your roommate, and the oven ) are utilized
The chart as a whole shows how each tray moves through the process

Kristens Cookie ( A1 )
T2 Mix Spoon Bake Cool Pack Pay
8 min 2 min 10 min 10 min

Fig B

T1 T1
5 min

T2
5 min

T1
2m

T2
2m

T1

T2
1 min

Ship

You Roommate

8 min

2 min

1 min

1 min 20 min

2 min

3 min

Oven 5 10 15

20

25

30

35

40

Time

Kristens Cookie ( A1 )
From the chart, it is clear that the throughput time for 2 dozen order is 36 min and the labour time = 17 mins Similarly the throughput times for other cases can be determined In general, the throughput time for an n dozen order is = Throughput time for 1 st dozen + ( n - 1 ) * Cycle time of bottleneck operation Bottleneck resource i.e. oven is busy throughout

Kristens Cookie ( A1 )
Number Of Trays Throughput Time Labour Time

1
2 3 4

26 min
36 min 46 min 56 min

12 min
17 min 22 min 33 min

Throughput Times For Orders

Orders for more than 3 dozen cookies require two mixing steps. So fourth dozen will have 11 mins more of labour

Kristens Cookie ( A1 )
Can You Run This Operation By Yourself ? From the Gantt Chart, all labour tasks can be performed by one person, because two persons do not have to be busy at the same time Even with successive orders back to back, one person is enough With a succession of 1 dozen orders, working with one person can run into trouble. See Figure C

Kristens Cookie ( A1 )
T1 Mix Spoon Bake Cool Pack Pay
8 min

T2
8 min 10 min

T3
8 min 10 min 10 min

Fig C

T1
5 min

T2 T1
2m

T3
5 min 5 min

T2
2m

T3
2m

T1
1 min

T2
1 min

T3
1 min

T1 You Roommate
1 min 1 min 20 min 2 min 1 min

T2

T3

8 min

8 min

8 min

3 min 10 min

3 min

Oven 5 10 15

20

25

30

35

40

Time

Kristens Cookie ( A1 )

In Fig C, you and your roommate are simultaneously busy during processing. Running entire operation by yourself is not feasible With orders for 1 dozen, 12 mins of labour time are required per order. With one person, only 10 mins are available during each 10 min cycle If you work alone, you are the bottleneck for orders of 1 dozen. Capacity falls from 6 dozens to 5 dozens / hr, if all orders are 1 dozen

Kristens Cookie ( A1 )

Q 5. How Many Electric Mixers And Baking Trays Will You Need ? Relates to the way system can be improved to increase the production capacity per night This allows you to better cover expenditures such as the fixed costs of going into business and of marketing Means improving the bottleneck operation. Consider Figure D

Kristens Cookie ( A1 )
Order sizes of 1 dozen cookies in all orders
Oven 10 min 6 / hr

Mix and Spoon 8 min 7.5 / hr

Cool 5 min

Pack 2 min 30 / hr

Receive Payment 1 min 60 / hr

Oven 10 min 6 / hr

Figure D : Capacity For Each Production Stage

Kristens Cookie ( A1 )

From figure D, the obvious improvement is to provide two ovens. The oven capacity now increases to 12 dozens / hr Bottleneck shifts to the mix and spoon step. The new capacity is 7.5 dozens / hr, if all order sizes are 1 dozen each If the orders were 3 dozen cookies at a time, the capacity of mixing stage will be 3 dozen cookies every 12 mins ( 12 = 6 + 2 + 2 + 2 ) or 15 dozen / hr

Kristens Cookie ( A1 )

Baking stage with 12 dozens/ hr will again be the bottleneck and will decide the capacity Identity of bottleneck and capacity of the system as a whole depends on the exact composition of orders Different orders create different demands on the resources of the system ( people and equipment stages )

Kristens Cookie ( A1 )

Further management analysis and judgment required to determine which stage of the process to improve next Estimates of future orders, importance of filling big orders in contrast to small orders, simple orders in contrast to complex ones needed to decide the next capital investment For ex, with 2 ovens, if majority of orders are 1 dozen batches, premix in advance and refrigerate dough for some popular cookies

Kristens Cookie ( A1 )

WIP will eliminate the mixing step for these cookies and increase capacity to 12 dozen / hr ( two ovens being the bottleneck again )

Effect of refrigeration on quality and the image of fresh baked cookies will be an important factor Have as many trays as needed, so they are not a binding constraint

Kristens Cookie ( A1 )

Because the operation is make to order and arrival of orders cannot be buffered, exact effect of second oven is more complex Depends on probability that second oven will allow you to serve either an additional order, or an order faster Keep a tally of order arrivals requiring a second oven if available. When a dozen cookies have to wait for oven, record waiting time

Kristens Cookie ( A1 )

If the delay is between 1 10 mins, second oven will reduce it to 0. If delay is 11 mins or more, it would be shortened by 10 mins Thus develop a sense of how often the second oven would be useful

Kristens Cookie ( A1 )
Second Improvement Reduce required labour time, to have more time for say, studying. Options include : Set of graduated spoons to hold exact amount of ingredient Quick ways of putting dough on tray and putting cookies into box Reduce throughput time, to reduce delivery time on rush orders Hotter oven / air conditioner above cooling area to speed baking / cooling steps

Kristens Cookie ( A1 )

Third Improvement Balance the line better. Presently process steps take different times Important consideration in case labour idle time cannot be used Other improvements are possible, depending on which aspects of the operation have biggest impact on company success

Kristens Cookie ( A1 )

Thank You