Kristen s Cookie Company Case Study
Kristen’s Cookie Company
Here is the Process Flow Diagram:
The whole process throughput time of making a dozen of cookies is 26 minutes. It takes washing, mixing and spooning 8 minutes to make a dozen of cookies. And preparation and bake time totally are 10 minutes. The final step of cooling, packing and accepting payment of cookies takes roommate 8 minutes to finish the cycle. Assume the night capacity is 4 hours, so Kristen and roommate have 240 minutes operating time. Since the oven only holds one tray, the second dozen takes an additional 10 minutes to bake. For example, first dozen of cookies take 26 minutes to make, second dozen of cookies take 36 minutes to make and third dozen of cookies take 46 minutes to make. So we can get 22 dozen of cookies within 240 minutes. And we need 236 minutes to make 22 dozen of cookies. The first step takes Kristen 6 minutes to wash out the electric mixer’s bowl and beaters, and another 2 minutes to spoon the cookies. The valuable time of Kristen would be 8 minutes. In second step, roommate takes 1 minute to put cookies into oven. And also in final step, it takes roommate 2 minutes to pack each dozen and about 1 minute to accept payment. So the valuable time of roommate is 4 minutes totally. Because all costs of ingredients and boxes for each dozen are the same, total valuable time to make one dozen of cookies is Kristen (8 minutes) plus roommate (4 minutes) equals 12 minutes. In a same way, the valuable time to make two dozen of cookies is 6 + 2*2 + 1*2 + 2*2 +1 = 17 minutes. And the valuable time to make three dozens of cookies is 6 + 2*3 + 1*3 + 2*3 + 1 = 22 minutes. The average hourly wage is $ 7.5, so we can assume our opportunity cost is $7.5. As a result, we can get the following table.
# of Cookies
Minutes
Cost
Cost per dozen
1 dozen
12
$1.50
$1.50
2 dozen
17
$2.12
$1.06
3 dozen
22
$2.75
$0.92
As the table shows above, the cost decreases with larger orders. We can offer 10%
Here is the Process Flow Diagram:
The whole process throughput time of making a dozen of cookies is 26 minutes. It takes washing, mixing and spooning 8 minutes to make a dozen of cookies. And preparation and bake time totally are 10 minutes. The final step of cooling, packing and accepting payment of cookies takes roommate 8 minutes to finish the cycle. Assume the night capacity is 4 hours, so Kristen and roommate have 240 minutes operating time. Since the oven only holds one tray, the second dozen takes an additional 10 minutes to bake. For example, first dozen of cookies take 26 minutes to make, second dozen of cookies take 36 minutes to make and third dozen of cookies take 46 minutes to make. So we can get 22 dozen of cookies within 240 minutes. And we need 236 minutes to make 22 dozen of cookies. The first step takes Kristen 6 minutes to wash out the electric mixer’s bowl and beaters, and another 2 minutes to spoon the cookies. The valuable time of Kristen would be 8 minutes. In second step, roommate takes 1 minute to put cookies into oven. And also in final step, it takes roommate 2 minutes to pack each dozen and about 1 minute to accept payment. So the valuable time of roommate is 4 minutes totally. Because all costs of ingredients and boxes for each dozen are the same, total valuable time to make one dozen of cookies is Kristen (8 minutes) plus roommate (4 minutes) equals 12 minutes. In a same way, the valuable time to make two dozen of cookies is 6 + 2*2 + 1*2 + 2*2 +1 = 17 minutes. And the valuable time to make three dozens of cookies is 6 + 2*3 + 1*3 + 2*3 + 1 = 22 minutes. The average hourly wage is $ 7.5, so we can assume our opportunity cost is $7.5. As a result, we can get the following table.
# of Cookies
Minutes
Cost
Cost per dozen
1 dozen
12
$1.50
$1.50
2 dozen
17
$2.12
$1.06
3 dozen
22
$2.75
$0.92
As the table shows above, the cost decreases with larger orders. We can offer 10%