Kristen's Cookie Case

The main goal of the Cookies unit was to solve the Unit Problem. The unit problem introduced us to the Woos, the owners of a cookie bakery. The Woos want to find the most profitable combination of plain and iced cookies to bake and sell in their store. We were given several constraints for this problem. According to the Woo’s recipes, a dozen normal cookies requires one pound of cookie dough, and a dozen iced cookies requires .7 pounds of cookie dough. The Woo family only has 110 pounds of cookie dough in stock, which will affect the number of cookies that can be made. The iced cookies also need icing, obviously. A dozen of iced cookies required .4 pounds of icing and the Woos only have 32 pounds of icing in stock.

I believe that peak-period pricing will be effective means of reducing the costs of over scheduling. As we can see in the calculation above, the delay cost dramatically increase when arrival rate increases.

We know that the order entry system is working poorly because the cycle time exceeds the customer timeline, but

5. As the Gantt diagram shows the electric mixer is not used for a long time within the process, so only one mixer is needed. Buying a new one will not increase the productivity of the process. The number of baking trays equals the maximum number of trays you will be using at any time. The highest volume of production is if three-dozen orders are produced continuously (s. Gantt diagram). The three activities that require a tray are filling the tray, baking and

message in 20 seconds. Machines of the time required 30 minutes to perform the same job.

L.L. Beans approach to a one shot order increases the risk of lost sales due to insufficient inventory as well as increases the risks of higher costs due to excessive inventory. The case indicates that lead times are significantly long from their suppliers (in the order of 8 to 12 weeks). We are not clear on the size of these orders but assuming these are mostly a one shot batch, it is feasible to estimate that these lead times would be reduced for a smaller quantity per order and more frequent orders. Although this approach would increase the transactional costs with suppliers (because a higher volume of individual orders would be placed at the supplier) it might generate significantly more impactful benefits such as:

The company is considering a $50 cash-back guarantee on any orders that have delivery times longer than a specified maximum but are not sure what maximum time to guarantee. They would be willing to pay out the guarantee on no more than 3% of their deliveries. What time limit in whole days should they set for their guarantee?

Assuming that we add another oven, the cycle time of the ovens would be 5 minutes. The new bottleneck for the entire process would now be that of mixing the ingredients and dishing the cookies onto the tray, a process which takes 8 minutes for 1 batch of cookies.

The plant has the ovens, the vats, the prep areas, and the packaging conveyor belts that will be needed to produce the goods to fulfill the new contracts. This plant will have five times the baking production capacity as the current Cambridge plant. A small fleet of trucks, most with refrigeration units, was also included in the package deal so the new plant will not be contracting with a trucking company to get their goods to customers.

Bibliography:Agnetis, Alessandro, Nicholas G. Hall, and Dario Pacciarelli. "Supply Chain Scheduling: Sequence Coordination." Discrete Applied Mathematics 154.15 (2006): 2044-63Lee, C.-Y. 1986. The economic order quantity for freight discount costs. IIE Trans. 18(3) 318-320. -----. 1989. A solution to the multiple set-up problem with dynamic demand. IIE Trans. 21(3) 266-270.

Normally, our suppliers have the most common items in stock, but special orders can cause progress to slow, so we order in advance regularly to avoid the possibility.

Also, according to break-even analysis operating with the single mold and excluding warehousing costs, a minimum of 12,035 units must be sold to break even. Under a similar situation with the double mold, 15,507 units must be sold to break even, which is about half of the optimistic sales projection. Also under the optimistic sales projection, a positive return on investment is expected. Because the company is turning profit,less additional investment is required. Additionally under the pessimistic and expected situation, the company turns losses, and under the optimistic projections, Chef’s Toolkit only has a net income of 13% of its revenues. Selecting Preferred alternative According to the above information and the projected pro-forma statements, Dale Reid should not invest his money in the company. The company’s lack of current assets, high expenses and low per-unit revenue create an unfortunate and unprofitable investment in pessimistic and expected situations. Only in the optimistic production and sales does the company begin to turn profit, but this profit is low. Chef’s Toolkit needs desperate restructuring and additional revenue sources before Dale Reid should invest. Developing

4 minutes by roommate: set oven (1 minute per dozen), package (2 minutes per dozen), and accept payment (1 minute per order)

With one faster convection oven, we can repeat the procedure as for a single oven (using the Gantt chart). The first dozen starts baking in the convection oven at the 9th minute and finishes baking at the 15th minute. Meanwhile the second dozen is ready to go into the oven. The RM sets the timer in 1 minute and the baking process for the second dozen starts at the 16th minute and ends at the 22nd minute. Meanwhile, there is just enough time for the first dozen to cool and be packed. At the end of 22nd minute, the RM unloads the second dozen, lets it cool for 5 minutes and packs them taking 2 more minutes. The order is ready by 29th minute at which time it is delivered and payment is accepted, giving a total theoretical flow time of 30 minutes.

The bottleneck operation would be the speed of operation, which is time you spend in preparing and baking. The speed with which you can produce cookies depends on the cycle time of baking. If we can rent another oven, it will increase our efficiency in order to make more cookies with lower cost. Because mixer can mix ingredients for up to three dozens cookies, each oven can hold a tray per time. This change would give us solution for production constraints. After increasing capacity of oven, it will make us start our new orders every 5 minutes and 7.5 dozens per hour. So we are willing to pay $200-$300 to rent an extra oven.