Kristen's Cookie Company

1359 WordsSep 23, 20066 Pages
Kristen 's Cookie Company Kristen 's Cookie Company is a good example where the success or failure of the company depends directly on the process planning adopted by the company, i.e., the company can maximize its productivity by utilizing its resources effectively. One major aspect of process analysis is to identify the major bottlenecks in the process and trying to mitigate their effects with least possible level of costs and resources. The following flowchart shows the overall process adopted by the company: (Exhibit 1) Filling a rush order: Process Resource(s) Process Time Cumulative Time Consumed Taking Order E-mail 0 minutes 0 minutes Washing and Mixing Self 6 minutes 6 minutes Filling Tray Self 2 minutes 8 minutes Preparing…show more content…
So, if labor cost is Rs. 20 per hour, we get the following costs distribution: Order size Labor Time Cost Cost per Dozen 1 dozen 12 Rs. 4.00 Rs. 4.00 2 dozen 17 Rs. 5.66 Rs. 2.83 Thus, cost per dozen of labor is decreasing. This can be applied to orders of more than two dozens as well. Hence, Kristen 's Cookie Company can give discounts to customers giving orders of more than one dozen because of the economies of scale as shown above. Material Requirements: The processor is required for mixing the ingredients for the cookies and is idle for most of the time. The oven required for the purpose of baking is the major bottleneck and there is no requirement for more than one processor. Hence, spending money on more than one processor would not be advisable for Kristen 's Cookie Company. The baking trays are required for three activities, namely, filling it and keeping it ready for baking, baking it in the oven, and cooling it after baking is done. Since the baking and cooling processes will be going on for at most one tray at a given time and the mixing process gets material ready for at most three trays of one dozen each, five trays would be sufficient, though, even three trays would serve the purpose if mixing and filling activities are done properly. Hence, it is advisable for Kristen 's Cookie Company to go for at least three baking trays to maximize its productivity. Cost-Benefit Analysis: The cost benefit analysis can be done by

More about Kristen's Cookie Company

Open Document