Biddys Bakery

Britney Sexton

10/17/2015

Operations Management

Scott Etzler

The operation of Biddy’s Bakery was initially a hobby started by her and a group of her friends. Many of the recipes were secrets or recipes that had been passed down for generations in their families.

1. Explain the challenge Elizabeth faced in meeting her capacity needs. What should she have considered before moving into the larger facility?

It took Elizabeth some time before she could break even and start garnering revenue from the bakery business. The decision to move into a larger facility was taken suddenly without trying to analyze whether the bakery needed a bigger facility. Also Elizabeth overestimated the capacity of growth and revenue she could collect from the bakery business before taking the decision to purchase a larger facility. This was mainly because she did not take into consideration future expenses and whether Biddy’s Bakery (a comparatively new start up) would be able to afford the extra cost incurred in purchasing a new facility. This was a decision taken in haste and thereby proved extremely risky for her business venture. In this case, strategic management decisions were not considered and an analysis of future growth of the business was not carried out. Also she should have consulted management students and business experts before making this decision.

2. Determine what is wrong with the proposal made by the team of business students and why?

The vision of Biddy’s Bakery was to make a number of traditionally baked goodies including a range of cakes and pies. The chief aim was to produce and sell these baked products to local restaurants and customers. However, the team of management students from the local university offered a completely different proposal. They asked to do away with all other traditional goodies and concentrate only on making McDoodle pies and selling them to a nearby grocery. The proposal changes the initial aim and mission to concentrate on...