1. A case on Flowtime, Batching and Costs
Kristen’s Cookies
A case on Flowtime, Batching and Costs

2. Kristen’s Cookies
Two friends cooking cookies at their apartment room for college students.

3. Mapping Inputs to Outputs through Resources

4. Process Flow Chart with a unit of analysis of dozen (=12) cookies
Deliver & Be paid
Pack
Wash and Mix Dough, Spoon Dough to Tray
Cool
Unload
Load and Set
Timer, Bake
Receive Order

5. 4 Key Questions
Orders can be for 1 dozen cookies or 2 dozen cookies, assuming each separately.
How long does it take you to fill a rush order?
How many orders can we fill in a night?
How much labor time is required to fill an order?
How much discount should we give to orders with 2 dozen cookies?

6. Capacity 1 Oven; Orders for 1 Dz. And 2 Dz. Cookies
Activity
Order size = 1 dz.
Order size = 2dz
Capacity (dz./hr.)
Set up + Flow time (min./dz.)
Capacity
order/hr dz./hr.
Overall

7. The First Key Question: How long to fill an order?

8. Scheduling Orders for 1 Dozen cookies in a Gantt chart
Time in minutes
Activities 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
Resources

9. The Second Key Question: How many orders per night?

10. The Third Key Question: Labor Time?
What is the cost of dozen cookies?
Cost of cookie = Cost of material + Cost of labor

11. Fourth Key Question: Pricing - Discounts
With one oven and flexible labor
Should we give a discount to a two dozen order as compared to a one dozen order? How much?
With one oven and inflexible labor

12. Suggestions
What are the simple activities similar to cooking that can be done at home to start a business?