2)How Iong does it take to produce an order dozen cookies?

How many orders can be

fiIIed in a 4 hour night?

Washing & Mixing = 6 minutes (dozen)
Spooning = 2 minutes (per tray)
Placing in Oven / Setting Timer =1 minute
Baking = 9 minutes
Cooling = 5 minutes(activity 2)
Packing in Box = 2 minutes(activity 2)
Payment = 1 minute(activity 3)
Total Activity Time: 26 minutes (one dozen, "worker paced Iine")

Kristen is responsibIe for 8 minutes of production reIated to activity 1= capacity of .
125 batches/minutes x 60 minutes=7.5 dozens/hour
Roommate is responsibIe for 18 minutes of production reIated to activities 2 and
3=.55556 batches/minute x 60 minutes - 3.33 dozens/hour
Process Capacity = Capacity of the bottle neck = 1/10 min (10 min includes set the timer
and oven)= .10
Flow rate = Process Capacity = 1/10 min(This number includes time in oven)=.10

Time to finish X batches = Time through an empty process + (X-1)/Flow rate
f total time = 4hr, then
4hrs = 4hrs*60 min/hr = 26 min + (X-1) /(1/10 min)
240 min = 26 min + (X-1)*10min
(X-1)*10min = 240min 26min =214/10
X-1 = 21.40
X = 22.40 orders for one dozen cookies
Therefore, in 4 hrs, Kristen can fulfill 22 orders of 1 dozen cookies
2)How much of your own and your rommate's vaIuabIe time wiII it take to fiII each order?
Kristen is responsible for 8 minutes of production related to activity 1= capacity of .125
batches/minutes x 60 minutes=7.5 dozens/hour
Roommate is responsible for 18 minutes of production related to activities 2 and
3=.55556 batches/minute x 60 minutes =3.33 dozens/hour
3)What is the Iabor content in an order of one dozen cookies? How much shouId Kristen
charge for such an order?
Washing & Mixing (Kristen) = 6 minutes (dozen)
Spooning (Kristen) = 2 minutes (per tray)
Placing in Oven / Setting Timer (Roomie) = 1 minute
Packing in Box (Roomie) = 2 minutes
Payment (Roomie) = 1 minute
Labor Content = Sum of Activity Times With Labor
= 6 mins/dozen + 2 mins/dozen + 1 min/dozen + 2 mins/dozen + 1 mins/dozen
= 12 mins / dozen



Assumption that washing and mixing requires operator presences/intervention.
Since the value of Kristen's time, nor the hourly cost of her roommate's time, was given
in the article provided, we can only guess at how much Kristen should ultimately charge
per batch of cookies.However to estimate this amount, Kristen should determine what
she will ultimately charge by computing the Flow Rate, then the Cost of Direct Labor, the
dle Time, the Labor Content, Variable Costs, add up the dle Times across all resources,
and then compute the Average Labor Utilization involved in producing each batch of
cookies. Once she has a good understanding of what her labor cost are for each batch, she
can then determine the rate of compensation and add her expected margin on top of that
cost.
Let us assume that hourly rate for both Kristen and her roommate is $10 including profit
margin.
Cost of direct labor = Total wages per unit time / Flow rate per unit time
=2* ($40/4hrs) / (24.78 batches/4hrs) = $80/24.78 = $3.22/batch
Total variable cost = cost of ingredients + cost of box
=$.60+ $.10 = $.70/ batch
Total cost = $3.22+$0.70 = $3.92/ dozen
4)Can Kristen run this operation by herseIf? What effect wouId this have on the capacity
of the system? What happens if aII orders are for two dozen cookies?
a.Kristen going it aIone:
Yes, Kristen could run the operation by herself, BUT in doing so, the operation's capacity
would be significantly reduced. So, by inference, if she must operate at a higher capacity for
success, then she would not be able to run the operation by herself. The following paragraph
describes the challenges that Kristen would face from a process flow perspective - if she were
working alone.
b.Affect on capacity of Kristen working soIo:
The mixing (6 min) + spooning per dozen (2 minutes) plus setting temperature and time (1
minute) is equal to the baking time (9 minutes) followed by 8 minutes total to cool, box, and
receive payment.While the first dozen is baking (9 minutes), Kristen can prepare a second
dozen.HOWEVER, she must wait 1 minute before the first dozen is completed and has
started the cooling process.Now she loses a minute to set the timer leaving 4 minutes
remaining for cooling prior to boxing.She can start the mixing process (BUT, we assumed
that this is a labor function so really she cannot start mixing until the AFTER the payment is
received.Since the total process time remains at 26 minutes, she can only produce 9 one
dozen orders, as shown by the following calculations:

Capacity for whole process = Number of Resources / Total Activity Time

= 1/26 min / dozen
= .03846 dozen/minute
.03846 dozen/min * 60 min/hr = 2.3076 dozen/hr
2.3076 dozen/hr * 4 hrs = 9.2304 dozen / 4 hrs or 9 one dozen cookie orders.

Note:
f Kristen works by herself, she becomes the bottleneck and System Cycle Time is increased to
12 minutes per dozen, so capacity is decreased to 20 dozen per night.
c.Effect of orders for 2 dozen cookies:
Assuming that the following analysis is against the original business plan of having 2 people
working Kristen and her roommate - all orders changing to 2 dozen cookies means that the
activity time for orders of 2 dozen cookies (rather than 1 dozen per order) increases to 36
minutes per order
This increase is mainly due to the idle time associated with waiting for the oven to complete
the baking of the first dozen and subsequent idle time waiting for the second dozen to
complete baking and cooling.
As a result, capacity is reduced to:
Capacity = Number of Resources / Activity Time
= 2/36 min

First let us notice that there are two periods in the day:

1. rom 7am-6pm, oranges come in at a rate of 10,000kg/hr and are processed, and thus leave the
plant, at 8000kg/hr. Because inflows exceed outflows, inventory will build up at a rate of
R = 10,000-8,000kg/hr = +2,000 kg/hr.

Thus, because we cannot have oranges stored overnight, we start with an empty plant so that inventory
at 7am is zero: I (7 am) = 0. Because inventory builds up linearly at 2,000kg/hr, the inventory at 6pm is
I(6pm) = 2,000 kg/hr * 11 hr = 22,000kg.



Bin capacity
6,000 kg
Inventory (9)
22,000 kg
6 pm 8:45 pm 7 am
Bin is Iull:
First truck waits Last truck leaves
2. After 6pm, no more oranges come in, yet processing continues at 8000 kg/hr until the plant is empty.
Thus, inflows is less than outflows so that inventory is depleted at a rate of
R = 0 - 8,000 kg/hr = - 8,000 kg/hr.

Thus, since we have that I(6pm) = 22,000kg, we know that inventory depletes linearly from that level at a
rate of -8,000 kg/hr. Thus, to empty the plant, inventory must reach zero and this will take an amount of
time t where:
22,000 kg - 8,000 kg/hr t = 0,
or
t = 22,000/8,000 hr = 2.75 hr = 2 hr 45min.
Thus, the plant must operate until 6pm + 2hr 45min = 8:45pm.

This can all be graphically summarized in the inventory build up diagram shown above.

3. %ruck dynamics: for this the inventory diagram is really useful. Notice that we have taken a total
process view of the plant, including the truck waiting queue. Thus, inventory is total inventory in the bins
+ inventory in the trucks (if any are waiting). So, let's draw the thick line on the inventory build-up
diagram, representing the bin storage capacity. First inventory builds up in the bins. When the bin is full,
then the trucks must wait. This happens at:
2,000 kg/hr t = 6,000kg,
so that the first truck will wait after t = 6,000/2,000 hr = 3 hr, which is at 10am. Now, the last truck that
arrives (at 6pm) joins the longest queue, and thus will wait the longest. That "unfortunate" truck will be
able to start dumping its contents in the bins when the bins start depleting. This is at
22,000 kg - 8,000 kg/hr t = 6,000,
or after t = (22,000-6,000)/8,000 hr = 2 hr, after 6pm. Thus, the last truck departs at 8pm and the
maximum truck waiting time is therefore 2 hours.

Now, among all the trucks that do wait (i.e., those arriving after 10am), the first truck waits practically zero
minutes, and the last truck waits 2 hours, culminating in an average of (0 + 2)hrs/2 = 1 hour.

Notice that the trucks arriving before 10am do not wait. Thus, the overall average truck waiting time is
(# trucks arriving before 10am * 0 + # trucks arriving after 10am * 1hr)/(total # of trucks).
Because input rate is 10,000kg/hr and each truck carries 1,000 kg/truck, the truck input rate is 10
trucks/hr, so that the overall average truck waiting time is:
(10 trucks/hr * 3hrs * 0 + 10 trucks/hr * 8hrs * 1hr)/(10 trucks/hr * 11 hrs) = 8/11 hr = 43.63min.
Average waiting time can also be calculated by noticing that the area of the upper triangle in the build-up
diagram represents the total amount of hours waited by all trucks:
Area = (22,000 - 6,000)kg * (8pm - 10 am) /2 = 16,000 kg * 10 waiting hr /2
= 80,000 kg waiting hrs = 80,000 kg waiting hrs / (1,000 kg/truck) = 80 truck waiting hrs.
Now, we just calculated that there are 80 trucks that do wait, hence the average waiting time among
those trucks that do wait is 80 truck waiting hrs/ 80 trucks = 1 hour