Class 3 - Case Debrief_KristensCookieCase

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Apr 3, 2024

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Process Flow Analysis: Case Study – Kristen’s Cookie Case COMM 204: Logistics and Operations Management Dr. Samuel Roscoe My YouTube channel :   https://www.youtube.com/@Dr.Roscoe https://www.linkedin.com/in/samuel-roscoe
Recap from last time A flow chart consolidates information about the different activities and their relations in the process. 2 Activities, tasks or operations Buffers: Queues or inventories Decision points Flow of flow units
Activity 1 3 Activity Resources Time per activity (minutes per dozen) Take order Computer 0 minutes Wash, Mix Self 6 minutes Fill tray Self 2 minutes/dozen Prepare oven Roommate, Oven 1 minute/dozen Bake Oven 9 minutes/dozen Remove tray Roommate 5 minutes/dozen Cool None/Counter 2 minutes/dozen Pack Roommate 2 minutes/dozen Collect payment Roommate 1 minute
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4 Activity 2 – current state process map Take order Mixing and washing Fill tray Load oven Continue baking Cool Pack Receive payment 0 minutes 2 minutes/dozen 5 minutes/dozen 6 minutes 2 minutes/dozen 1 minute/dozen 9 minutes/dozen 1 minute Oven can only hold 1 tray!
Activity 2 – current state process map –Swim Lanes 5 Self Roommate Equipment (Stove) Place Order O Minutes Mixing and washing Fill tray 6 Minutes 2 Minutes/dozen Prepare Oven/Load Bake Pack Cool Collect Payment 1 Minute/dozen 9 Minute/dozen 5Minute/dozen 2 Minute/dozen Equipment (Counter Top)
Activity 3 - Gantt Chart 6 Resource Activity Time Span Computer Take order Self Wash, Mix Self Fill tray Roommate, Oven Prepare oven Oven Bake Roommate Remove tray None/Counter Cool Roommate Pack Roommate Collect payment Time 6 m 2 m 1m 9 m 5 m 2 m 1m
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Activity 3 - Poll: Time to fill an order Q. How long does it take to fill one order? Assume all orders are for one dozen cookies (one tray). A) 30 minutes B) 26 minutes C) 18 minutes D) 24 minutes 7
Activity 4 - Poll: Orders per night Q. How many orders can you fill in one night if you work 4 hrs/night? Assume all orders are for one dozen cookies (one tray). Choose the most accurate answer. A) 22 orders B) 23 orders C) 24 orders D) 26 orders 8 Partner activity
Activity 4 -Orders per night - explained 9 Resource Activity Time Span Computer Take order Self Wash, Mix Self Fill tray Roommate, Oven Prepare oven Oven Bake Roommate Remove tray None/Counter Cool Roommate Pack Roommate Collect payment Time 6 m 2 m 1m 9 m 5 m 2 m 1m 8 minutes of setup time before first order goes in the oven Last order must come out of the oven 8 minutes before closing The oven only has (240-16)=224 minutes or 3.73 hours available. 6 orders/hr 22.38 orders
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Activity 4 - Orders per night - explained 10 • The process capacity rate may not equal the actual output. 0 Time (min) 1 2 5 6 9 2 1 1 2 5 6 9 2 1 1 2 5 6 9 2 1 1 9 2 6 5 2 1 1 9 2 6 5 2 1 1 9 6 5 2 1 1 9 2 6 5 2 1 1 9 2 6 5 2 1 1 9 2 6 • Process capacity rate refers to the max possible output in a time interval. 60 min
Activity 5 – Poll - Time to fill an order – two dozen Q. How long does it take to fill one order? Assume all orders are for two dozen cookies (two trays). A) 26 minutes B) 52 minutes C) 36 minutes D) 46 minutes 11
Activity 5 - Time to fill an order – two dozen 12 Resource Activity Time Span Computer Take order Self Wash, Mix Self Fill tray Roommate, Oven Prepare oven Oven Bake Roommate Remove tray None/Counter Cool Roommate Pack Roommate Collect payment Time 6 m 2 m 1m 9 m 5 m 2 m 1m 2 m 1m 9 m 5 m 2 m 20 minutes for the oven + 16 minutes to setup/shutdown=36 minutes
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Activity 6 – Poll- Time to fill an order – three dozen Q. How long does it take to fill one order? Assume all orders are for three dozen cookies (three trays). A) 26 minutes B) 52 minutes C) 36 minutes D) 46 minutes 13
Resource Activity Time Span Computer Take order Self Wash, Mix Self Fill tray Roommate, Oven Prepare oven Oven Bake Roommate Remove tray None/Counter Cool Roommate Pack Roommate Collect payment Activity 6-Time to fill an order – three dozen 14 Time 6 m 2 m 1m 9 m 5 m 2 m 2 m 1m 9 m 5 m 2 m 30 minutes for the oven + 16 minutes to setup/shutdown=46 minutes 1 2 m 1 9 m 5 m 2 m
Activity 7 - Finding bottlenecks Q. What is the bottleneck if we assume every order is for 2 dozen cookies ? Q. What is the bottleneck if we assume every order is for 3 dozen cookies ? Compute unit load , capacity rates 15 Partner activity
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Activity 7 - Finding bottlenecks Q. What is the bottleneck? Assume all orders are for one dozen cookies (one tray). 16 Resource Unit Load (Min/Unit) Capacity Rate (Unit/Hour) You 8 (1/8) x 60 = 7.5 Roommate 4 (1/4) x 60 = 15 Oven 10 (1/10) x 60 = 6
Activity 7 - Finding bottlenecks Q. What is the bottleneck if we assume every order is for 2 dozen cookies ? Q. What is the bottleneck if we assume every order is for 3 dozen cookies ? 17 You Roommate Oven Unit = One order for 2 dozen cookies Resource Unit Load (Min/Unit) Capacity Rate (Unit/Hour) You 6+2x2 = 10 (1/10)x60 =6 Roommate 1+2x3 = 7 (1/7)x60 = 8.5 Oven 20 (1/20)x60 = 3 Unit = One order for 3 dozen cookies Resource Unit Load (Min/Unit) Capacity Rate (Unit/Hour) You 6+2x3 = 12 (1/12) x 60 = 5 Roommate 1+3x3 = 10 (1/10) x 60 = 6 Oven 3 x 10 = 30 (1/30) x 60 = 2
Activity 8 - Quantity discount Q. Should you give any discount for the orders with two dozen cookies or more? A) Yes B) No 18
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Quantity discount First, calculate production costs. • Cost of ingredients: $0.6 per dozen, • Cost of box: $0.1 per dozen • Cost of your time? Let’s assume it’s 12$ per hour or $.2 per minute • Total labor time = Your time + Roommate’s time = [6 + 2*(# of dozens)] + [1 + 3*(# dozens)] = 7+5*(# of dozens) 19 Costs/Order size 1 dozen cookies 2 dozen cookies 3 dozen cookies Labor @ $0.2 per minute $2.40 $3.40 $4.40 Ingredients $0.6 $1.2 $1.8 Box $0.1 $0.2 $0.3 Total $3.1 $4.8 = $2.4/dozen $6.5 = $2.16/dozen
Quantity discount First, calculate production costs. • Cost of ingredients: $0.6 per dozen, • Cost of box: $0.1 per dozen • Cost of your time? Let’s assume it’s $x per minute • Total labor time = Your time + Roommate’s time = [6 + 2*(# of dozens)] + [1 + 3*(# dozens)] = 7+5*(# of dozens) 20 Costs/Order size 1 dozen cookies 2 dozen cookies 3 dozen cookies Labor @ $x per minute $12x $17x $22x Ingredients $0.6 $1.2 $1.8 Box $0.1 $0.2 $0.3 Total $(12x + .7) /dozen /dozen
Quantity discount Q. Should you give any discount for the orders with two dozen cookies? Your costs per dozen decrease with more orders, so it may be a good idea to give discount for the second or the third dozen. Q. How much discount to offer if cost of time is $.2 per minute? You can give a discount of $1.4 for one 2 dozen order compared to two 1 dozen orders. 2 orders of dozen: 1 order of 2 dozen: 21
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Process improvement Q. What changes improve the production plans? 1. Remove the bottleneck, so add another oven 2. Technical improvements to decrease start up time (faster mixing) 3. Roommate and you move between process steps that are under-utilized 22
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To Do Before Next Class: We will discuss how well we are utilizing resources and is inventory building up? Required Reading: Core Text Book (pdf) – Chapter 3 Recommended Reading: Chapter 5 - Flow rate and capacity analysis. Managing Business Process Flows: Principles of Operations Management. Anupindi R., Chopra S., and Dueshmukh S.D. 3rd Edition. 2. Chapter 3 - Process flow measures. Managing Business Process Flows: Principles of Opera- tions Management. Anupindi R., Chopra S., and Dueshmukh S.D. 3rd Edition 23
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