A case on Flowtime, Batching and Costs

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Presentation transcript:

A case on Flowtime, Batching and Costs Kristen’s Cookies A case on Flowtime, Batching and Costs

Kristen’s Cookies Two friends cooking cookies at their apartment room for college students.

Mapping Inputs to Outputs through Resources

Process Flow Chart with a unit of analysis of dozen (=12) cookies Deliver & Be paid Pack Wash and Mix Dough, Spoon Dough to Tray Cool Unload Load and Set Timer, Bake Receive Order

4 Key Questions Orders can be for 1 dozen cookies or 2 dozen cookies, assuming each separately. How long does it take you to fill a rush order? How many orders can we fill in a night? How much labor time is required to fill an order? How much discount should we give to orders with 2 dozen cookies?

Capacity 1 Oven; Orders for 1 Dz. And 2 Dz. Cookies Activity Order size = 1 dz. Order size = 2dz Capacity (dz./hr.) Set up + Flow time (min./dz.) Capacity order/hr dz./hr. Overall

The First Key Question: How long to fill an order?

Scheduling Orders for 1 Dozen cookies in a Gantt chart Time in minutes Activities 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Resources

The Second Key Question: How many orders per night?

The Third Key Question: Labor Time? What is the cost of dozen cookies? Cost of cookie = Cost of material + Cost of labor

Fourth Key Question: Pricing - Discounts With one oven and flexible labor Should we give a discount to a two dozen order as compared to a one dozen order? How much? With one oven and inflexible labor

Suggestions What are the simple activities similar to cooking that can be done at home to start a business?