I did the flow chart according to the order of operations it take to ba bake and pack the cookies.

Kristen is excited to start up the Kristen's Cookie Company in her on-campus apartment. The company will provide fresh cookies to starving students late at night. Kristen needs to evaluate the preliminary design for the company's production process to figure out many variables, including what prices to charge, whether she will be able to make a profit, and how many orders to accept. She also plans to hire her roommate to take care of some operations.

BUSINESS CONCEPT

Kristen's idea is to bake fresh cookies to order, using any combination of ingredients that the buyer wants. The cookies will be ready for pickup at her apartment within an hour.

Several factors will set her cookies apart from competing products such as store-bought cookies. First, her cookies will be completely fresh. Kristen and her roommate will not bake any cookies before receiving the order; therefore, the buyer will be getting cookies that are literally hot out of the oven.

Second, like Steve's Ice Cream, they will have a variety of ingredients available to add to the basic dough, including chocolate chips, M&M's, chopped Heath bars, coconut, walnuts, and raisins. Buyers will telephone in their orders and specify which of these ingredients they want in their cookies. Kristen's cookie company guarantees completely fresh cookies. In short, the startup company will have the freshest, most exotic cookies anywhere, available right on campus.

THE PRODUCTION PROCESS

Baking cookies is simple: mix all the ingredients in a food processor; spoon out the cookie dough onto a tray; put the cookies into the oven; bake them; take the tray of cookies out of the oven; let the cookies cool; and, finally, take the cookies off the tray and carefully pack them in a box. Kristen and her roommate already own all the necessary capital equipment: one food processor, multiple cookie trays, and spoons. Their apartment has a small oven that will hold one tray at a time. The landlord pays for all the

electricity. The variable costs, therefore, are merely the cost of the ingredients (estimated to

be $0.60/dozen), the cost of the box in which the cookies are packed ($0.10 per box; each box holds a dozen cookies), and labor expense.

A detailed examination of the production process, which specifies how long each of the steps will take, follows. The first step is to take an order, which they have figured out how to do quickly and with 100 percent accuracy. (Actually, Kristen and her roommate devised a method using the campus electronic mail system to accept orders and to inform customers when their orders will be ready for pickup. Because this runs automatically on their personal computers, it does not take any of their time.) Therefore, this step will be ignored in further analysis.

Kristen and her roommate have timed the necessary physical operations. The first physical production step is to wash out the mixing bowl from the previous batch, add all of the ingredients, and mix them in the food processor. The mixing bowls hold ingredients for up to 3 dozen cookies. After that, the cookies will be dished up, one dozen at a time, onto a cookie tray. The washing and mixing steps take six minutes, regardless of how many cookies are being made in the batch. That is, to mix enough dough and ingredients for two dozen cookies takes the same six minutes as one dozen cookies. However, dishing up the cookies onto the tray takes two minutes per tray. Kristen has decided to take both mixing and dishing activities.

In the next step, Kristen will put the cookies in the oven and set the thermostat and timer, which takes about one minute. The cookies bake for the next nine minutes. So total baking time is 10 minutes, during the first minute of which Kristen is busy setting the oven. As one of the resources, the oven will be fully occupied during the 10 minutes. Because the oven holds only one tray, a second dozen takes an additional 10 minutes to bake. Removing the cookies from the oven takes only a negligible amount of time. You can ignore this time or think of this having been included in the 1 minute-effort of oven-setup.

After the cookies are taken from the oven, the cookies will be put aside to cool for 5 minutes. The roommate carefully packs them in a box and accepts payment. It takes two minutes to pack each dozen and about one minute to accept payment for the order.

That is the process for producing cookies by the dozen in Kristen's Cookie Company. As experienced bakers know, a few simplifications were made in the actual cookie production process. For example, the first batch of cookies for the night requires preheating the oven. However, such complexities can be put aside without much loss of generality.

Q U E S T I O N S

1. Draw the process flowchart.

2. How long will it take Kristen's cookie company to fill a rush order of a dozen cookies? When the second dozen will be done?

3. Under steady state, how many dozens can Kristen's cookie company fill in a night, assuming the company will open four hours each night? (Note: steady state means no need to consider the beginning and ending of the process as it has been in operation for some time.)