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    Order & Reply 0 Minute Wash & Mix 6 Minute Spooning 2 Minute

    Uploaded by

    Busyairi Alfan Ramadhan
    This document summarizes the production process and operations for Kristen Cookies, a small cookie baking business. It analyzes key aspects of the business including production time, order capacity, labor requirements, pricing strategies, equipment needs, and potential bottlenecks. The bottleneck is identified as the baking process. Renting an additional oven for $6/day could increase production capacity and profits while still remaining profitable.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Order & Reply 0 Minute Wash & Mix 6 Minute Spooning 2 Minute

    Uploaded by

    Busyairi Alfan Ramadhan
    90 views2 pages
    This document summarizes the production process and operations for Kristen Cookies, a small cookie baking business. It analyzes key aspects of the business including production time, order capacity, labor requirements, pricing strategies, equipment needs, and potential bottlenecks. The bottleneck is identified as the baking process. Renting an additional oven for $6/day could increase production capacity and profits while still remaining profitable.

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    operation management

    Original Title

    Kristen Cookies

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    This document summarizes the production process and operations for Kristen Cookies, a small cookie baking business. It analyzes key aspects of the business including production time, order capacity, labor requirements, pricing strategies, equipment needs, and potential bottlenecks. The bottleneck is identified as the baking process. Renting an additional oven for $6/day could increase production capacity and profits while still remaining profitable.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    90 views2 pages

    Order & Reply 0 Minute Wash & Mix 6 Minute Spooning 2 Minute

    Uploaded by

    Busyairi Alfan Ramadhan
    This document summarizes the production process and operations for Kristen Cookies, a small cookie baking business. It analyzes key aspects of the business including production time, order capacity, labor requirements, pricing strategies, equipment needs, and potential bottlenecks. The bottleneck is identified as the baking process. Renting an additional oven for $6/day could increase production capacity and profits while still remaining profitable.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Busyairi Alfan Ramadhan / 29115599 / Operational Management

    Kristen Cookies

    1. How long will it take you to fill a rush order?

    Order & Reply Wash & Mix Spooning


    0 Minute 6 Minute 2 Minute

    Cooling Baking Heat Oven


    5 Minute 9 Minute 1 Minute

    Pack/Collect Money Total Time KRISTEN


    3 Minute 26 Minute ROOMMATE

    2. How many orders can you fill in a night, assuming you are open four hours each night?

    The flow time: 26 minutes/tray


    Time available: 4 Hours = 240 minutes
    240 minutes
    Order = = 9.2 tray = 9 trays
    25 minute/tray

    3. How much of your own and your roommates valuable time will it take to fill each other?

    By me: 8 minutes
    Wash the mixing bowl from previous batch (6 minutes)
    Dish up the cookies (2 minutes)
    By roommate: 4 minutes
    - Set up Oven (1 minutes)
    - Pack Cookie (2 minutes)
    - Payment (1 minutes)

    4. Because of 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?

    1 dozen of cookies = $0.7 (regardless labor cost)


    Assuming Kristen Cookies sold 20 dozen/day
    The price of each dozen of cookie for $2 flat for every amount dozen

    Cost = $0.7 x 20 = $14/day


    Revenue = $2 x 20 = $40/day
    Profit = Total Revenue Total Cost = $40 - $14 = $26/day
    Amount Normal Price Discount Price Revenue Profit
    2 Dozen $4 10% $3.6 $36 $22
    3 Dozen $6 15% $5.1 $34.6 $20.2
    4 Dozen $8 20% $6.4 $32 $18
    5 Dozen $10 25% $7.5 $30 $16

    Based on the calculation its still okay if we put discount for 2 and 3 dozen of cookie because its
    still profitable enough, but if we put discount for 4 and 5 dozen of cookie it will decrease a half of
    the normal profit.

    5. How many food processors and baking trays will you need?

    Food Processor: 1
    Additional Trays: 2
    Because the bottleneck operation is in the baking process so we dont need to add more food
    processor. Mixing bowl can hold up to 3 dozen cookies but trays only can fit 1 dozen cookies, so
    we need 2 more trays so every production can produce 3 dozen cookies.

    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 to rent an additional oven?

    Bottleneck: the bottleneck in the production is in the baking process

    Effect of Adding another oven


    Pro : will produce more cookies faster since baking is the bottleneck of the production
    Con : will increase the cost of the production

    How much would you willing to pay a rent an additional oven:


    Assuming the profit is formulated as,

    Cost = $0.7 x 20 = $14/day


    Revenue = $2 x 20 = $40/day
    Profit = Total Revenue Total Cost = $40 - $14 = $26/day
    Monthly Profit = $780/month

    The higher price that I willing to pay to rent an oven is $6/day and the daily cost will be $20/day
    and it still profitable for the company and will accelerate the production process.

    Profit = $40 - $20 = $20/day


    Monthly Profit = $600/month

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