Kristen

Appendices:

A). 3 separate locations based on a “hub and spokes” model, with Kristen’s apartment serving as the hub and additional locations in North and West Campus

B). Kristen serves as the manager (as does her roommate, who is also a processor). They must hire 9 delivery people, 9 bakers, and 8 workers to process orders and payments.

C). Weekday hours- 8:00 p.m – 1:00 a.m

Weekend Hours- 8:00 p.m. – 4:00 a.m.

D). This comes out to about 40 hours a week. Since 3 people from each department must be working during all operating hours, 40/3 = 13.666 hours a week per employee. If they fulfill these obligations, they receive 6 academic credits for the semester.

E).

Order Received

(1 minute)

Raw Materials

Add / Mix

(6 mins)

Spoon Onto Tray

(2 mins)

Baking

(10 mins)

Cool Down (5 mins)

Packaging

(2 mins)

Payment

(Negligible)

Work in Process

Delivery (10-20 mins)

Consumer

Bottleneck = Baking

F). As the process flow diagram shows, throughput time is 26 minutes for the first batch and 10 minutes for all proceeding batches. If we start operations a few minutes before hours each day, we can have a cycle time of 10 minutes per dozen. This gives us a capacity of 6-dozen cookies per hour per location. With three location, this corresponds to 18 dozen cookies per hour. On a typical weekday, we can produce 90 dozen cookies, and on a weekend, we can produce 144 dozen cookies on a given night.

G). Costs- $1.00 per batch ($0.90 for ingredients and $0.10 for box)

Fuel Costs- Assuming each car travels, on average, 25 miles per hour every hour (which is conservative), and a gallon of gas is 4 dollars, then fuel costs would amount to $4.00 per car. With 3 cars, this is $12.00. This also means the total cost per batch is about $0.66 in fuel costs. We will round the combined total costs to $1.40 per batch.

H). We are charging $9.00 per batch, as this will allow us to “beat” Insomnia prices.

I). $9.00-$1.70=$7.30 profit...