...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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...1 Kristen's Cookie Company (A1) You and your roommate are preparing to launch Kristen’s Cookie Company in your on-campus apartment. The company will provide fresh cookies to hungry students late at night. You need to evaluate the preliminary design for the company’s production process in order to make key policy decisions, including what prices to charge, what equipment to order and how many orders to accept, and to determine whether the business can be profitable. Illustration by Jane Simon Business Concept Your idea is to bake fresh cookies to order, using any combination of ingredients that the buyer wants. The cookies will be ready for pickup at your apartment within an hour. Several factors will set you apart from competing products such as store-bought cookies. First, your cookies will be completely fresh. You will not bake any cookies before receiving the order; therefore, the buyer will be getting cookies that are literally hot out of the oven. Second, like many Boston-based area ice-cream shops, you will have a variety of ingredients available to add to the basic dough, including chocolate chips, M&M’s, chopped Heath bars, coconut, walnuts, and raisins. Buyers will telephone in their orders and specify which of these ingredients they want in their cookies. You will guarantee completely fresh cookies. In short, you will have the freshest, most exotic cookies anywhere, available right on campus. The Production Process Baking cookies is simple:...
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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 Co. – Katherine Fanola Individual Assignment Question 1: Draw a Flow Diagram Question 2: How long will it take to fulfill a rush order? The answer is 26 minutes. First, the customer will order which will not take any time. Then, Kristen begins by washing and mixing which will have a cycle time of 6 minutes. Next, spooning will take Kristen 2 minutes, leaving a finish time at 8 minutes (6 min+2min). Then Kristen’s roommate will heat the oven which will take 1 minute leaving a finish time of 9 minutes (8 min+1 min). The cookies will bake for 9 minutes leaving a finish time of 18 minutes (9 min+9 min). Time for the cookies to unload and cool down will then be an additional 5 minutes leaving a finish time of 23 minutes (18 min+5 min). Last step is for customer to pay and for the money to be collecting taking a total of 3 more minutes and leaving a finish time of 26 minutes (23 min + 3 min). Therefore, total time to fulfill a rush order is 26 minutes. Question 3: How many orders can you fulfill in a night, assuming you are open for 4 hours each night? The answer is 22 dozen cookies. Operating for 4 hours in a night is equivalent to operating for 240 minutes. If each order size is one dozen cookies, then order completion time for 1 batch will be 26 minutes. Then, the time for every additional dozen of cookies after that will take 10 minutes. It will take 236 minutes for 22 dozen cookies to be ordered in this case, and it will take 246...
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...Case Report: Kristen's Cookie company 1. It takes 26 minutes to complete a rush order, that is, the addition of the time it takes to complete each step: 6 (wash and mix) + 2 (spoon) + 10 (load and bake) + 5 (unload and cool) + 2 (pack) + 1 (pay) = 26. Process flow diagram of the cookie-making process: Me Mixer Me Spoon and tray Roommate Oven and tray Oven and tray INPUT OUTPUT Roommate Oven and tray Tray Roommate Roommate Remarks: Since it does not consume any time, the first step, that is to take an order, is here ignored. Inventory is not kept at any time as the cookie dough is continuously being processed by the dozen to fit the bottleneck's capacity and only produce fresh cookies according to placed orders. 2. We assume the following: The minimum amount of cookies per order is one dozen cookies (the case states that the process produces “cookies by the dozen”). There are at least two trays and spoons, as the case mentions “cookie trays” and “spoons” Since the amount of time necessary to unload the oven is considered “negligeable”, it can be done during the same minute used to load the next batch. In this view, the first order takes 26 minutes but each following batch only requires an additional 10 minutes (see Gantt chart 1 attached). Capacity of resources (dozen cookies per hour): | Me | Roommate | Mixer (1) | Trays (2) | Spoons (2) | Oven (1) | Cycle time | 8mns/unit | 4mns/unit...
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...Case Report: Kristen’s Cookie Company Question 1 How long will it take to fulfill a rush order? | Gantt Chart for Kristen's Cookie Case | | | | | | | | | | | | | To fulfill the rush order it is still necessary to go through all parts of the process illustrated on the process flow diagram of the cookie-making process (it can be found on the last page). As there are no processes that can be done in a parallel way, every stage follows the other. Calculating the time needed for each step it can be concluded that the order can’t be prepared less than in 26 minutes. Question 2 How many orders can you fill in a night, assuming you are open 4 hours each night? We already know from the first question, the first dozen can be fulfilled in 26 minutes. Lets have a look, on the fastest possible way to prepare the second and all the following dozens. I can start preparing the 2nd order as soon as I start heating the oven (the chart visually demonstrates it): According to the chart it takes 26 minutes to fill the first order and 10 minutes more to fill each following order. From here we have: Operating time = 4*60 = 240 minutes The formula for counting the amount of orders that are able to be produced can be seen as: 16+10n <= 240 where n is the numbers of orders. From this equation we get, that n(max) = 22 dozen. So during 4 hours in a night one can prepare 22 dozen of cookies in 236 minutes. Question 3 How much of your own and your roommate’s valuable...
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...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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...Kristen’s Cookie 1. How long does it take to fill a rush order [from mix and spoon, Load oven, bake, cool pack, and receive payment] ? (For orders of one dozen, and for orders of two dozens-same ingredients.) Answer: (a) for orders of one dozen 26 minutes (b) for orders of two dozens 36 minutes 2. For orders of one dozen, how many orders can you fill in a night? Assuming 4 hours per night - every order has a different recipe (so it does not add value to put pre-mixed ingredients ‘on stock’ during the night. - There are enough cookie trays (only the oven is a bottleneck) - The first step requires 6 minutes of attention, cleaning and loading the mixing equipment Capacity limited by throughput oven: o 4 hours = 240 minutes o Preparation before oven first batch - 8 minutes o Handling after last oven - 8 minutes (potentially one minute can be saved on the last 8 minutes, by preparing the invoice during the cooling time, but it has no impact on the total number of batches) - Remaining time for oven processes = 224 minutes Answer: 22 orders if me and my roommate stick to the described processes 3. (A) Given Kristen’s Cookie wants to maximize the revenue, do you need to employ your roommate if all orders are one-dozen orders(assuming orders do not have the same ingredient)? Answer: Need / No need Why? The takt time of the line is determined by the oven (bottleneck operation, excluding start up and close...
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...Assignment 1 Operations Management I Kristen’s Cookie Company (A1) Total (50) Marks Weightage 10% Lead Questions for Assignment 1 1. How long will it take you to fill an order? (8) marks Operation | Time (mins) | Quunatiy (dozen) | Washing, Mixing etc | 6 | 3 | Spooning | 2 | 1 | Resetting & Baking | 10 | 1 | Cooling | 5 | 1 | Packing | 2 | 1 | Accepting Payment | 1 | - | For filling in a rush order Time taken = 6+2+10+5+2+1 = 26 mins 2. How many orders can you fill in a night, assuming you are open four hours each night? ( 7) marks Time for 1 dozen = 26 mins. Time for 2 dozen = 6+2+10+10+5+2+1 = 36 mins. Time for 3 dozen = 6+2+10+10+10+5+2+1 = 46 mins. Hence, eqn for time reqd = 16+10*n ; where n => no of dozen Therefore 4*60 = 16+10*n 224 = 10*n n = 22 dozen 3. How much of your own and your roommate’s valuable time will it take to fill each order? ( 5) marks My time spent = 6+2 = 8 mins. Roommate time spent = 1+3 = 4 mins. 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 you any longer to fill a two-dozen cookies order than one–dozen cookies order? ( 4) marks The two cost components in this business, that the team of Kristen and her roommate is...
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...Kristen’s cookie company pre-case report DSC335 1. Draw a flow chart of the cookie-making process 2. How long will it take to fill a rush order of 1-dozen cookie? It will take 26 minutes to fill a rush order of 1-dozen cookie. (I revise my chart to 4 cycle orders) 3. What is the cycle time? How many orders can you fill in a night (4-hour period)? Does your answer depend on the size of the order, 1-dozen, 2-dozen, or 3-dozen? 1-dozen orders: The cycle time is 10 minutes. The first order of 1-dozen cookies will take 26 minutes, and each 10 minutes for another 1-dozen cookie order. (4*60-26)/10=21.4 plus the first order, we can make 22 orders of 1-dozen cookie fill in a night. 2-dozen orders: The cycle time is 20 minutes. The first order of 2-dozen cookies will take 36 minutes, and each 20 minutes for another 2-dozen cookie order. (4*60-36)/20=10.2 and plus the first order, we can make 11 orders of 2-dozen cookie fill in a night. 3-dozen orders: The cycle time is 30 minutes. The first order of 3-dozen cookies will take 46 minutes, and each 30 minutes for another 3-dozen cookie order. (4*60-46)/30=6.47 and plus the first order, we can make 7 orders of 3-dozen cookie fill in a night. 4. What is the difference in labor (both you and your roommate’s time) per dozen among 1-dozen, 2-dozen, and 3-dozen orders? 1-dozen orders: Me: Wash and Mixing 6 minutes + fill the tray 2 minutes = 8 minutes +my roommate: Setting timer and putting in the oven 1 minute...
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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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...Kristen’s Cookie Case Case Answers Global Operations Hult International Business School Module B, 2012-13 Suneel Udpa January 21, 2013 1. 26 minutes assuming that the system is completely empty. If we receive a call anytime at or after the Mix&Spoon stage, it'll take us 26 + additional 10 minutes. This includes 8 minutes at the Mix&Spoon stage and a 2 minute wait to finish baking the previous batch. Therefore, it would take us 36 minutes to fill a rush order. (Please refer to Table 1.0 on page 4 for details). 2. At a steady state we'd be able to produce 6 (process capacity) x 4 (hours) = 24 dozen per night. At a starting state, assuming that 1st dozen takes 26 minutes, and we move into a steady state of production, we have 4 hours or 214 minutes (out of 4 hours) left, enabling us to produce 22 dozen cookies total. 3. For each dozen, I would spend 8 minutes working on it, and my roommates would spend 4 minutes. Hence, I would spend 176 minutes per shift and my roommate would spend 88 minutes per shift (with 22 dozen at a starting state). At a starting steady state, I would spend 192 minutes and my roommate 96 minutes. 4. We can in fact offer discounts to our customers who order more than one dozen cookies due to the time we save in the Load&Bake stage of production. Since we are able to produce up to 3 batches in the Mix&Spoon stage, our calculations would be as follows: 6 minutes to Mix and an extra 2 minutes to spoon for each batch. 30% of our time...
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...Homework #1: Kristen’s Cookie Company Case 1 6+2+1+9+5+2+1 = 26 mins Resources Activities where needed Time required per unit of work Number of each resource Capacity Kristen Wash and Mix Dish up to trays 6 min 2 min 1 7.5 dozen/hr Bowl Wash and Mix 6 min 1 10 dozen/hr Trays Dish up to trays 2 min Infinite Infinite dozens/hr Roommate Load & Set Timer Packing Payment 1 min 2 min 1 min 1 15 dozen/hr Oven Load & Set Timer Baking 1 min 9 min 1 6 dozen/hr Empty space Cooling 5 min Infinite Infinite dozens/hr The oven is the bottleneck resource. Its capacity is 6 dozen cookies per hour. Because the process’s hourly capacity is 6 dozen, the process’s cycle time is 10 min. Therefore the maximum number of dozens that the process can produce can be given with the help of the following formula: 16 + 10x = 240 x = 22.4 The maximum number of dozens that the process can produce in four hours is 22. 16 + 10x = 60 x = 4.4 λ = 4.4 dozen/hr W = flow time = 26 min = 26/60 hr L = λ W = 1.91 Case 2 Resources Activities where needed Time required per unit of work Number of each resource Capacity Kristen Wash and Mix Dish up to trays 6 min 4 min 1 6 orders/hr Bowl Wash and Mix 6 min 1 10 orders/hr Trays Dish up to trays 4 min Infinite Infinite orders/hr Roommate Load & Set Timer Packing Payment 2 min 4 min 1 min 1 8.57 orders/hr Oven Load & Set Timer Baking 2 min 18 min 1 3 orders/hr Empty space Cooling...
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...impact of setups and batching on process capacity? How can we determine what the best batch size is? Analysis of a real life process: Benihana Case study: 3 Quiz question 1 A. B. B C. D. Turn your clicker to channel 25 Switching from a push to a pull system will generally Increase the process capacity Increase the flow rate of the process Decrease the average flow time of the flow units Increase the utilization of some of the resources 4 2 Batch process A batch process is a process which produces multiple types of flow units in successive groups, or batches This applies mostly to manufacturing make to stock processes manufacturing, make-to-stock The equipment is usually highly flexible but often requires setups when switching production from type of flow unit to another E.g. Shirts of different sizes and/or colors A (production) batch is a set of production units that are (p ) p processed before the resource needs to go through another setup 5 Definitions Definition 1: Setups are down times, i.e. times during which no flow units can be worked on by the resource because the machine is being set up Definition 2 (more general) : Setups are activities for which the duration is independent of the number of flow units 6 3 Back to Kristen’s Cookies Co. Were there any setups involved in the process (using definition 2)? What was the equivalent of batch size there? 7 Setup time...
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