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Forecasting and Operations Management Saint Marys College of California Executive MBA Program
This presentation will evaluate the preliminary design for the Companys production process to make policy and pricing decisions, equipment needed, how many orders can be accepted, and whether the business can be profitable.
The Customer
The Systems
The People
Cooling 5 minutes
Hold
Spooning 2 minutes
Wash/Mix
Spooning Heat Oven Bake Cool
Kristen
Kristen Roommate Oven Tray
6 minutes
2 minutes 1 minute 9 minutes 0 minutes 5 minutes
00:00
06:00 08:00 09:00 18:00 18:00
06:00
08:00 09:00 18:00 18:00 23:00
Pack/Collect $$
Roommate
3 minutes
23:00
26:00
22 dozen
236 minutes
Roommate
Activity Heat Oven, Remove Cookies, Pack and Collect Money Total Cycle Time
1+0+3=
4 minutes
Minutes
12 17 22
Cost
$2.00 $2.83 $3.66
Potential Discount
0 $0.59 $0.78
Perhaps offering a 10% - 20% discount (or set dollar amount) on orders of two dozen and above is an option.
Cost
$2.00 $2.83 $3.66
Total
$2.70 $2.11 $1.92
Potential Discount
0 $0.59 $0.08
Cool
The speed with which you can produce cookies is dependent upon the cycle time for baking, the bottleneck operation.
Throughput Time
6+2 = 8 minutes
5 minutes
2+1 = 3 minutes
7.5 Dozen
12 Dozen
20 Dozen
8 minutes
5 minutes
5 minutes
3 minutes
As we saw in the previous gantt chart, there would be no need to stop baking of the previous cookie. The time that the rush order will delay is only at most 1 minute. And the previous order can be finished on time. There is no need to offer a special rate.
We suggest an 8 minute safety margin for rush orders. If we begin a wash and mix process, then a rush order comes in, we have to stop and process that order. The previous order would be delayed by a max of 8 minutes to wash and mix the rush order. Time is 6 + 2 = 8 minutes.
Purchase or rent an additional oven. - Increase capacity of the bottleneck. - Increases cookie-making capacity.
Purchase several additional baking trays. - These items are inexpensive - Buying more ensures they are never a binding constraint.
Thank you.