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Kristen's Cookie Company

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Kristen's Cookie Company - Case write-up

Process flow diagram

Inputs - Basic Dough, Ingredients

Output - Cookies packed in boxes

Flow Units - Cookies

Resources - Kristen and her roommate, Oven, Spoons, Trays, Food Processor

Assumptions -

1. An order is for a dozen cookies of any one type.

2. Kristen and her roommate work for 4 hours per day.

Q1. Time Taken for a rush order = Sum of time taken for Activities 1,2,3,4,5,6, and 7 for an order

= 6 + 2 + 1 + 9 + 5 + 2 + 1 = 26 minutes

Q2. Process Capacity = minimum of time taken for all process steps.

Process step capacity = # of resources / Activity Time ( The values for each step are mentioned in the

process flow diagram above.)

Hence Process Capacity = minimum ( 40,120,240,26.6,48,120,240) = 26.6 orders/day

Or in other words, Kristen and her roommate can fill in 26.6 orders in four hours.

Q3. Time taken by Kristen for one order = Time taken by Kristen to perform activity 1 and 2

= 6 minutes + 2 minutes = 8 minutes.

Time taken by her roommate for one order = Time taken to perform activities 3,6, and 7

= 1 minute + 2 minute + 1 minute = 4 minutes.

Q4. Discounts can be given to people who order two dozen or more cookies. This is because, Activity 1 (wash bowl, add and mix ingredients) that is performed by Kristen will take only 6 minutes per order for a maximum order size of 3 dozen cookies. So Kristen will spend the same 6 minutes for activity 1 regardless of whether the order quantity is 1,2, or 3 dozens. Similarly, Activity 7 performed by Kristen's roommate will take 1 minute per order regardless of the order size.

So, The time taken for activity 1 and 7 together is 7 minutes when the order size = 1,2, or 3 dozens.

So, when order for two dozen cookies are placed, we save totally 7 minutes for the two orders put together or 3.5 minutes per order. Similarly when order for three dozen cookies are placed, we save 14 minutes for the three orders put together.

Time saved per order for 2 dozen cookies - 3.5 minutes

Time saved per order for 3 dozen cookies - 4.67 minutes.

Assuming, we take no profit from these savings and pass them on to the customers, a discount of 13.46% (3/26) can be given to customers who order 2 dozen cookies and a discount of 17.96% (4.67/26) can be given to customers who order 3 dozen cookies.

Maximum of 17.96% discount can be given to customers when they order in multiples of 3 dozens. Any intermediate number will receive a different discount. For example, 4 dozen = 3 dozens + 1 dozen = discount of 17.96% for 3 dozens and no discount for 1 dozen. 5 dozens = discount of 17.96% for 3 dozens and discount of 13.46% for 2 dozens and hence forth.

Two-dozen cookie order will take a longer time to fill than a one-dozen cookie order because activity

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