1. Analyze the attached mini-case ("Kaylyn's Sweet Biscuits, LLC") by developing a process flow diagram of the cookie process and answering the following set of study questions:
   1. How many orders can Kaylyn's Sweet Biscuits fill in a night, assuming they are open four hours each night?
   2. How much labor (i.e., effort) will be required of Kaylyn and her partner to fill each order?
   3. Because their baking trays hold exactly one dozen biscuits, Kaylyn's will produce and sell biscuits by the dozen. Should Kaylyn give any discount for people who order two dozen biscuits, three dozen biscuits, or more? If so, how much?
   4. How many baking trays will they need at a minimum?
   5. Are there any changes they can make to the production plans that will allow them to make more biscuits in less time or at a lower cost? For example, is there a bottleneck in their production process? (Spoiler alert: the oven is the bottleneck.) How much should they be willing to pay to rent an additional oven?
   6. What happens if Kaylyn tries to do this by herself without a partner?
   7. When should they promise delivery? How can they look quickly at their order board (list of pending orders) to tell customers exactly their orders will be ready?
   8. What other factors should they consider at this stage of planning their business?

Please note: This problem is a metaphor for launching a business, thus adding a layer of ambiguity to fight your way through. Indeed, while this case is very short, it is amazingly rich -- nay it is deliciously rich -- in content. I think you will find plenty of thought-provoking content to discuss (or debate or perhaps even argue) among your team. Enjoy!

KAYLYN'S SWEET BISCUITS, LLC

My young protege, Kaylyn, and her partner are preparing to launch Kaylyn's Sweet Biscuits out of their (shared) flat. They will provide fresh cookies to hungry students late at night. They need to evaluate the preliminary design for the company's production process in order to make key policy decisions and to determine whether the business can be profitable.

BUSINESS CONCEPT

Their idea is to bake fresh biscuits to order, using any customized flavoring that the buyer wants. The biscuits will be ready for pick up within an hour.

Several factors will set their product apart from competing products such as storebought biscuits. First, they will guarantee freshness. Because they will not bake any biscuits before receiving the order, the buyer will be getting biscuits that are hot out of the oven.

Second, they will have a variety of flavorings available to add to the basic dough, including almond flavoring, orange flavoring, espresso flavoring, chocolate flavoring, and coconut flavoring. Buyers will specify which if any of these flavorings they want when they place their orders.

THE PRODUCTION PROCESS

In principle, producing homemade biscuits is simple: measure out the ingredients in a bowl and mix them with an electric hand mixer; spoon the mixture onto a tray; load the biscuits into the oven and set the oven; bake the biscuits; remove the biscuits from the oven and let them cool; and, finally, take the biscuits off the tray and carefully pack them in a box. Kaylyn and her partner already own all the necessary capital equipment: an electric hand mixer, baking trays, bowls and spoons. Their flat has a small oven that holds one tray at a time. The variable costs are merely the purchase cost of the ingredients (estimated to be $2.50/dozen), the purchase cost of the box in which the biscuits are packed ($1.00 per box, where each box holds one dozen biscuits), and their time.

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 will be extremely fast and 100% accurate since Kaylyn's partner has devised a foolproof app for that. Because this step does not take any of Kaylyn's or her partner's time, it will be ignored in further analysis.

Kaylyn and her partner have timed the necessary physical operations. The first physical production step is for Kaylyn to wash out the mixing bowl and beaters from the previous batch, measure out and add the ingredients to the bowl, and mix the ingredients. The mixing bowl can hold up to three dozen biscuits. Kaylyn then spoons the biscuits, one dozen at a time, onto a baking tray. These activities take 6 minutes for the washing and mixing step, regardless of how many biscuits are being made in the batch. That is, mixing enough dough for three dozen biscuits takes the same 6 minutes

as for one dozen biscuits. However, spooning the biscuits onto the baking tray takes 2

minutes per tray.

The next step, performed by Kaylyn's partner, is to load the biscuits in the oven and to set the thermostat as well as the oven timer, which in total takes about 1 minute. The biscuits bake for the next 9 minutes. So, the total oven time is 10 minutes, during the first minute of which Kaylyn's partner is busy setting up the oven. Because the oven only holds one tray, a second dozen takes an additional 10 minutes of oven time.

Kaylyn's partner also performs the last steps of the process by first removing the cookies from the oven and putting them aside to cool for 5 minutes, then carefully packing them in a box and accepting payment. Removing the biscuits from the oven takes a negligible amount of time (0 minutes), but it takes 2 minutes to pack each dozen and about 1 minute to exchange the order for payment from the customer.

This is the process Kaylyn and her partner plan to use to produce make-to-order biscuits by the dozen at Kaylyn's Sweet Biscuits, LLC. As experienced bakers know, a few simplifications were made in describing the actual biscuit production process. However, such complexities will be put aside for now.

While some issues can be resolved only after they get started and try out different ways of producing the biscuits, Kaylyn and her partner at least want a preliminary plan, with as much as possible specified, so that they can do a careful calculation of how much effort they will need to devote to their business each night, and how much money they can expect to make. Therefore, they need help answering the above operational questions before they commit to the launch.