Kristen Cookies

Our teachings for this week state that "the capacity of a process consisting multiple steps or machines is equal to the capacity of the bottleneck step". The most critical and highlighted bottleneck step in this case is the constraint of having only one oven and the oven's capacity of being able to only bake one tray at a time i.e. dozen cookies. This is the most imperative current bottleneck among the processing steps. Aside from the fact that we are constrained to baking only one tray at a time, the baking process itself requires the most amount of time compared to all the other processes.

There are alternatives that can be employed to improve the production processes. Firstly, we recommend addressing the bottleneck and increasing the baking capacity or reducing the baking time. This would involve acquiring access to another oven which would increase the amount of cookies that could be produced. Considering the setting of business operations (dorms), we recommend renting the use of the oven from next door on-campus apartments. The rental agreement could follow a variable structure or a fixed rental agreement. We will analyze the differences in these models later in this document.

Process Time per tray (Dozen)

Washing & Mixing 6 mins

Spooning 2 mins

Placing in Oven 1 min

Baking time 9 mins

Removing & Cooling 5 mins

Packing 2 mins

Payment Processing 1 min

Total Time per dozen 26 mins

As the mixer has the capacity to mix three dozen cookies at a time, we should look to increase our current bottleneck to at least three dozen cookies. The chart above depicts that the total baking time takes 10mins per tray. In order to increase this capacity, we need to acquire an oven that will allow us to either bake two trays at once or reduce the baking time. Considering the baking time is quite standard, the option of renting an oven that allows for multiple racks for baking will be a more preferable option.

Items Cost

Ingredients 0.60 / dozen

Box 0.10 / dozen

Labor $7 / hour / person* Lower end labor cost employed

Considering the above costs, 1 dozen cookies would demand the following costs:

Materials Labor Current Total Cost per dozen

0.60+0.10 = $0.70 7/60=0.117X26 = $3.03 $0.70+$3.03 = $3.73

The cliental, unique product offering, customization options and non-existent competition, we recommend an initial selling price of $5. This