This case study deals with starting one's own make-to-order cookies business. It discusses the time elements necessary for a successful business. It also includes discussions on the other necessities of production and operation which will help achieve the business' success.
Roger E. Bohn; Janice H. Hammond
Harvard Business Review (608037-PDF-ENG)
July 12, 2007
Case questions answered:
- How long will it take you to fill a rush order from Kristen’s Cookie Co.?
- How many orders can you fill in a night, assuming you are open four hours each night?
- How much of your own and your roommate’s valuable time will it take to fill each order?
- Because your baking trays can hold exactly one dozen cookies, you will produce and sell cookies by the dozen. Should you give any discount for people who order two dozen cookies, three dozen cookies, or more? If so, how much? Will it take you any longer to fill a two-dozen cookie order than a one-dozen cookie order?
- How many electric mixers and baking trays will you need?
- Are there any changes that you can make in the production plans that will allow you to make better cookies or more cookies in less time or at a lower cost? For example, is there a bottleneck operation in your production process that you can expand cheaply? What is the effect of adding another oven? How much would you be willing to pay to rent an additional oven?
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Case answers for Kristen's Cookie Co. (A) (Abridged)
Exercise 1 – How long will it take you to fill a rush order from Kristen’s Cookie Co.?
Before determining the actual required time to fill a rush order from Kristen’s Cookie Co., it is essential to establish two key underlying assumptions, which will enable us to respond to the question more thoroughly.
First, we assume that the customer orders the same product type, meaning for instance cookies with the same flavor.
Second, we assume that the size of the rush order is restricted to one dozen cookies.
On the basis of our assumptions, we can then establish the flow time, which is the demanded time that is required to fill a rush order.
As can be seen in the graphic above, the time required taking a unit of our product from the beginning to the end of the process is 26 minutes in total. Thus, we can conclude that it will take 26 minutes to fill the rush order.
Exercise 2 – How many orders can you fill in a night, assuming you are open four hours each night
Observing Graphic 2, we can establish a function in the form of f(x)=16 + 10x. This function describes the required time of filling x orders. While the first unit is produced in 26 minutes, f(1)=26, the second unit is produced 10 minutes after the completion of the first unit, f(2)=36, and the third unit 10 minutes after the completion of the second unit, f(3)=46.
Thus, in order to determine how many units can be produced by Kristen’s Cookie Co. within the time frame of four hours (240 minutes), we need to establish…