From the given data we can draw the following Process Flowchart
The case analysis yields the following points
1. The time taken to fill rush order will depend on whether there are any orders that are being processed currently or not. Accordingly we will have two scenarios a).
No order is being processed when the rush order is received. The time in this case will be equal to the sum of the time required for all the processes. Time = 6 + 2 + 1 + 9 + 5 + 2 + 1 = 26minute b).
An order is being processed when the rush order is received. In the worst case, the cookies will have just been put in the oven. Thus oven will not be free before (1 + 9)= 10 minutes. By this time, the washing of the bowl and mixing of the dough for the rush order will be done. This will take 8 min. Since oven will not be free for 2 more minutes. Thus total time for this process will be 8 + 2 + 1+ 9 + 5 + 2 + 1 = 28 minutes
Every additional order of a dozen cookies will take an additional 10 minutes to fulfill (as the time taken for baking is the only bottleneck involved)
2. If we are open for 4 hours (or 240 minutes), the number of orders that can be filled will be: Every order will take 10 minutes, since the baking time (ie 10min) is the bottleneck, except the first order which will take 6+ 2 =8min in the beginning and the last order which will take 5+2+1=8 more minutes. Thus, [240 – (8+8)] / 10 = 22.4 orders can be filled in a day. That is 22 orders or 22*12 = 264 cookies in a day.
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3. I am performing the process of washing, mixing and filling the dough in the tray, while the roommate is putting the tray in the oven, packing, and collecting the payment Thus for each order I spend: 6 + 2 = 8 minutes Roommate spends: 1 + 2 + 1 = 4 minutes
A problem of idle time arises when more than one order is to be fulfilled, now if 2 simultaneous orders come, then I will have an idle time of 2 minutes and the roommate will have an idle time of 6 minutes.
4. If we order 2 dozen cookies or 3 dozen cookies, then my time will be reduced for washing and mixing, since the dough for 3 dozen cookies can be mixed together. That is my time will be reduced by 6 minutes for a 2 dozen order and 12 minutes for a 3 dozen order. My roommate’s time will be reduced by 1minute for 2dozen and 2 minute for 3 dozen. It is the time required for collecting payment since now she will collect payment only once for the whole order. However the total time for the process is still the same, since the baking process is the bottleneck and this will not affect the process of baking ,If this time that is saved, can be utilized for some productive work, which can earn more than the discounts we give, only then should we give discounts for 2 dozen or 3 dozen orders.
5. The business can be run smoothly using only one food processor, but the minimum number of trays that are required are 2 trays. This can be explained as follows
The total time required for fulfilling an order is 26 minutes, now if another order is taken before the fulfillment of the first order then we will need another tray in which to place the ingredient mix and prepare it for baking.
If we have further orders then the first tray can be used again since it will have come back after the cooling cycle.
6. To make cookies in lesser time we can use 3 ovens or use an oven with a larger capacity. With 3 ovens we can make 3 dozen cookies in just 31 minutes as compared to 48 minutes taken with just 1 oven. This amounts to an increase of 35% in sales due to time being saved.
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Addition of an extra oven can also help in this regard; with an extra oven we can fill 28 orders in a day instead of only 22 orders.
Thus the additional rent that we can pay for an additional oven will be an amount lesser than the additional profit made by tending to 6 extra orders in a day.
The additional oven will be very useful since the main Bottleneck encountered in this process is the time taken to bake the cookies.
Additional analysis
1. If I were to do the whole process by myself it would take me 36 minutes to fill 2 orders which come back-to-back. The problem in this case would be that there can be no parallel processing. Thus after every 2 orders the process of baking has to start afresh, hence the total number of orders that can be filled per day will be
X = (240*2)/36 = 13.333
Therefore only 13 orders can be filled everyday as compared to 22 that can be filled by 2 people.
Hence working alone would have the same costs but sales would decrease by close to 50%.
2. There will be no effect on the time taken to manufacture the “Crash priority” order that has come up; both the new order and the order already in the oven can be delivered on time. The only problem here can arise if we have other orders in queue when this order arrives, then those orders will have to be kept waiting when we attend to this order. We can charge the customer a premium which will be equal to the number of orders whose delivery time will be extended beyond an hour due to this order. i.e. if we have 6 orders in queue and 3 of them are delayed due to the new order then
Premium charged= No. of orders unfulfilled due to the new order * price;
3. The entire process time taken here is 26 minutes; every additional order will take an additional 10 minutes. Therefore we can service 4 orders in the first hour and 6 orders in every subsequent hour, this holds good if we have to deliver within an hour. If that restriction is relaxed, then delivery time we promise will be determined by the number of orders already in queue
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and any work-in-progress
The formula that we can use for determining delivery time will be
Time = (No. of orders in the queue*10 minutes) + (Work in progress* Time remaining in baking) + 10 minutes (Baking time of the new order) + 8 minutes (time till packing)
i.e. if we have 3 orders in queue and another order which has to be baked for a further 5 minutes the delivery time we can promise will be
Time = (3*10) + (5) +10+8 = 53 minutes. This is how we can promise delivery.
4. The major factors that should be considered at this stage of planning the business are what prices to charge, how many orders to accept and what can the profit be, the business has no extra costs apart from the input costs. But to safeguard against breakdown of equipment we must add a maintenance charge for the machine maintenance, the other costs that can come into picture are the opportunity costs, i.e. if our time was utilized in other tasks what could have been the profit we could have made. Hence these are the important factors that must be considered at this stage of planning.
5. If the product was a standard product then the following changes could be made
* We can have 3 ovens, this will be useful because if the product is a standard one then we will always make 3 dozen cookies every time we prepare a mix, thus it would be useful for us to have 3 ovens as it would considerably reduce our time and give faster output
* We can increase the number of orders that we can service each night
* The order-taking system will be changed since now there is no customization so we will only be required to ask the customer as to how many dozens does he/she want
These are the changes that should be made if the product is changed to a standardized one.
