...Case Study: Kristen’s Cookie Company Key questions to answer before you launch the business: 1) How long will it take you to fill a rush order? If we consider that one order is a dozen, the flow time is 26 minutes for the first order. 2) How many orders can you fill in a night, assuming you are open four hours each night? (4 hours = 240 minutes) If we consider that one order is a dozen, it will take me: * For the first order: 26 minutes * For the second order: 20 minutes (excluding backing and mixing because 6 min can be for 3 dozens) * For the third order: 20 minutes → So, it will take 66 minutes for 3 orders. → (240 / 66)* 3 = 10 orders/ night. 3) How much of your own and your roommate’s valuable time will it take to fill each order? If we assume that we will work 4 hours (240 minutes) each night, and it takes us on average 22 minutes (26+20+20 /3) to produce a dozen. (Considering that one order is a dozen.) 4) Because your baking trays can hold exactly one dozen cookies, you 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 than a one-dozen cookie order? Because producing a second and a third dozen cookies will take less time than producing the first dozen cookies (excluding the washing and mixing steps), we can give a discount for people ordering two or three dozens...
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...3. Flow Rate Analysis • Evaluating flow-rate through a complex process • Notions of “capacity”, “bottlenecks” and “utilization” • Improving flow-rate (capacity) of a system Case: Kristen’s cookie company 1 Course Roadmap Operations Management Strategic View Process View Process Flow Metrics Flow Rate 2 Recap Basics Steps of Process Flow Analysis 1. Define the process 2. Draw the process flow diagram 3. Determine the basic process flow metrics: flow rate, flow time, inventory Little’s Law I=RxT 3 Kristen’s Cookie Co. • Process Flow Diagram 4 Kristen’s Cookie Co. Q1. How long will it take you to fill a rush order? 5 Kristen’s Cookie Co. Q2. How many orders can you fill in a night, assuming you are open four hours each night? Assume each order is for 1 dozen cookies. Assume that you have 1 tray. 6 Kristen’s Cookie Co. Q2. How many orders can you fill in a night, assuming you are open four hours each night? Assume each order is for 1 dozen cookies. Assume that you have sufficient number of trays. 7 Definition Capacity of a resource It is the maximum possible flow rate through a resource on average What is capacity of each resource in KCC? 8 Definition Bottleneck Bottleneck is the resource with limiting constraint on the system. Capacity of a process It is the maximum possible flow rate through the process. = Capacity of the Bottleneck resource Now Calculate the Capacity of KCC? 9 Bottleneck...
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...Case Three: Kristen’s Cookie Company Kate Johnson INTRODUCTION For many students on a college campus, late nights are as common as group projects and comprehensive tests. During these late nights, snacks can help keep a student focused. Kristen’s Cookie Company (KCC), hopes to capitalize on this fact by providing these students with customizable (perceived quality), high quality, freshly made cookies (aesthetic quality) with a quick delivery time (serviceability) in close proximity to the students (serviceability). Ordinarily, students can get cookies in many venues—including grocery stores, restaurants, and bakeries—that are premade for reasonable prices; but these venues may be closed late at night, or are too far from the campus to fit into a student’s busy schedule. For this reason, many students may be receptive to the convenience and fast delivery time of KCC. Additionally, the easy online ordering process will benefit the company as it continues to grow. KCC is positioned to be successful if it can continue to effectively deliver on all of its order winners. COOKIE PRODUCTION The production process for making the cookies is shown in the process flow diagram in Exhibit 1. Since the time to preheat the oven is omitted from this case, the total processing time for the first batch of one dozen cookies is 26 minutes. If a mistake is made on one of the batches of cookies, it will set KCC back by a minimum of 25 minutes. When the first batch is put into the oven...
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...Kristen’s Cookie Company Case Study OPTM 6090 Spring 2014 Team 1 Executive Summary Kristen and her roommate have planned the Kristen’s Cookie Company (KCC) as a joint venture to create and operate a successful business operated in a college campus apartment, with potential to grow in the future. The core competency is providing made-to-order fresh cookies after standard business operating hours. There are several immediate decisions to address including scale of operation, business partner relationship, operation and production systems, as well as pricing, ordering, and delivery policies. Kristen and her partner must determine which of various alternatives presented will help them achieve operational optimization. After a careful analysis, it is recommended that Kristen that all orders be standardized to one dozen, with rush deliveries limited to the first batch of the night while using existing equipment available. Kristen should continue to maintain her working relationship with her roommate in order to run the business out of their apartment using one oven, one mixer and two baking trays. Problem Definition Kristen needs to decide how to optimize the cookie making process to achieve the best business practices. The partners must formulate rules for accepting and fulfilling orders that will address any of the system’s current insufficiencies. The business is small, with limited resources in finances, space, equipment and time. The primary constraint is...
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...Illustrative Exam 1[1] Solutions BUAD311 – Operations Management Section A: Multiple Choices (circle only one) 1. Which of the following statement is correct? a. Make-to-order systems are better than make-to-stock systems. b. Make-to-stock systems are better than make-to-order systems. c. Hybrid systems are perfect and better than both MTO and MTS systems. d. Hybrid systems are worse than both MTO and MTS systems. e. None of the above e): It is hard to tell which one is better between MTO and MTS. Each has its pros and cons. The answer really depends on the settings, i.e. customer demands and operating cost. 2. According to Little’s Law, a restaurant owner may increase the revenue by a. reducing the throughput rate b. having larger space and higher WIP c. having smaller space and lower WIP d. increasing the time customers staying in the restaurant e. None of the above b): The manager actually wants to increase the Flow Rate (Throughput Rate). 3. To improve the utilization rate, we can I: Cross-train the workers II: Adopt flexibility equipment III: Shift from MTS systems to MTO systems Choose the most appropriate. a. I b. II c. III d. I and II e. I, II, and III d): MTO and MTS have nothing to do with the utilization, since utilization is a concept for AVERAGE. Cross-trained workers and flexible equipment belong to the same concept—convertible resource, which can improve...
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...** ASSESSMENT EXAM QUESTIONS – THESE ITEMS WILL DEFINITELY APPEAR ON THE FINAL EXAM ** CHAPTER 1 |1-113. |Marketing will not happen unless: | |A) |e-commerce is flourishing. | |B) |facilitators are present to simplify exchange. | |C) |middlemen are present to facilitate exchange. | |D) |two or more parties each have something they want to exchange for something else. | |E) |an economy is market-directed rather than planned. | |1-120. |MACRO-marketing: | |A) |is a social process. | |B) |tries to overcome "discrepancies of quantity" and "discrepancies of assortment." | |C) |tries to effectively match supply and demand. | |D) |tries to overcome the many separations...
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