Kristen runs a cookie business called Kristen's Cookie Co. and has some questions about operations. She can currently fill 6 dozen cookies per hour which is the bottleneck in her process. In 4 hours of baking each night she could fill 22 orders. Each order takes her own time and her roommate's time to complete. She asks if she should offer volume discounts and how many food processors and baking sheets she will need. Changes like better, faster production or lower costs are also considered along with adding another oven.

1. Kristen’s Cookie Co. - Case How long will it take to fill a rush order? How many orders can you fill in one night assuming 4 hours each night? How much of your own and your roommate’s time will it take to fill each order? Should you give a volume discount? If so, how much? How many food processors and baking trays will you need? Changes – better cookies, more cookies in less time or lower cost? Additional oven?

2. Kristen’s Cookie Co. - #1 26 minutes / dozen What is the bottleneck? - Bake Operation (6 dozen / hr) Wash, mix, spoon Bake Cool Pack Accept Payment 6 + 2 min per dozen. 7.5 dozen per hour 10 min per dozen 6 dozen per hour 5 min per dozen 12 dozen per hour 2 min per dozen 30 dozen per hour 1 min per dozen 60 dozen per hour

3. Kristen’s Cookie Co. - #2 Less 8 min startup and 8 min finish, max capacity = (4*60 – 16) / 10 = 224/10 = 22

4. Kristen’s Cookie Co. - #3 Kristen works 8 mins / batch or about 8x6 or 48 mins / hr = 80% Roommate works 4 mins / batch or about 24 mins / hr = 40% Profitability? Assume Price = $5 / dzn; Cost = $0.70 Max profit = (22x5) – (22x0.7) = $110 - $15.40 = $94.60 or $23.65 / hr.