Dear SpongeBob,

It was great to speak with you this morning over the phone, and I’m looking forward to hearing what you can figure out for us! Here’s the information you requested:

The process works as follows:

1. Eggs are cracked and separated. This operator is great! She can do 24 eggs in 2 minutes.
2. Egg whites are beaten until soft peaks form while dry ingredients are mixed in another mixer simultaneously. There are 36 eggs in each batch. It usually takes 5-7 minutes for the egg whites to form soft peaks and about 4 minutes for the dry ingredients to be sufficiently mixed.
3. Incorporate wet and dry ingredients. This usually takes 9 minutes per batch.
4. Pour batter into cake tins. It is known that we get somewhere 38 cakes per batch 30% of the time and 43 cakes per batch 70% of the time. Pouring takes 12 minutes per batch. There’s usually 2% of the batter remaining in the mixing bowl that gets thrown away.
5. Bake at 375°F. I mentioned the amount and bake time in the video.
6. 2 people work together to remove cakes from the tins. Since the cakes can stick to the tin, these operators work really quickly. We usually lose 8-10 cakes per round. It takes the team of 2 about 10 minutes to remove all of the freshly baked cakes from their tin.
7. Cakes are sliced in half with a thin wire for 2 perfect halves (everytime). There’s never any back up here so I’m not even sure what the production time is.
8. Spoon apricot jam onto base of cakes. I think this operator can do 4 cakes per minute.
9. Place top on base and cover entirely with jam. This is done in sets of 11. Each set takes about 4 minutes.
10. Cover cakes with dark chocolate sauce. This is also done in sets of 11 and each set takes about 5 minutes.
11. Let cool for an hour and a half.
12. Cakes are then packed by 4 people. Each packer takes a different amount of time to do a cake:
13. Cakes are now sent out to their destination!

Packer	Average Time Per Cake
1	12 minutes
2	16 minutes
3	13 minutes
4	10 minutes

Thanks again for your willingness to help us out here! I’m looking forward to hearing from you soon.

Sandy Cheeks

Instructions: Using the above information,

1. Draw a diagram of the process. Be sure to include key capacity information.
2. Identify the bottleneck step of the process. What is the capacity at this step? What is the minimum number of (total) operators that should work this step so that it is no longer the bottleneck?
3. Sam’s Club just called. They’re requesting a rush order of 350 cakes. How quickly can the luxury chocolate cake producer get this sent out? (Assume 0 cakes in stock). Does your answer here make sense given the actual flow of the process? Explain why or why not.
4. Use the data provided in the chart below. Calculate the BEP for each of the time periods provided. From this, suggest how many cakes they should plan to produce going forward in order to break even. How many cakes should they produce in order to profit $10,000 in 2019-Q3? (Assume the same values as 2019-Q2).

	Unit	2016-Q1	2016-Q2	2016-Q3	2016-Q4	2017-Q1	2017-Q2	2017-Q3	2017-Q4	2018-Q1	2018-Q2	2018-Q3	2018-Q4	2019-Q1	2019-Q2
Storage Costs	$/cake	0.75	0.75	0.75	0.75	0.75	0.75	0.75	0.75	0.75	0.75	0.75	0.75	0.75	0.75
Rent	$/month	2400	2436	2472.54	2509.63	2547.27	2585.48	2624.26	2663.62	2703.57	2744.12	2785.28	2827.06	2869.47	2912.51
Utilities	$/month	1236	1073	1092	1304	1264	1269	1035	1076	1470	1020	1050	1393	1156	1293
Ingredients	$/cake	4.62	4.76	4.9	5.05	5.2	5.36	5.52	5.69	5.86	6.04	6.22	6.41	6.6	6.8
Selling Price	$/cake	70	70	70	75	75	75	75	75	75	80	80	80	80	80
Direct Labor	$/cake	23.21	23.21	23.21	23.21	23.21	24.14	24.14	24.14	24.14	25.11	25.11	25.11	25.11	26.11
Salaried Labor	$/year	265000	265000	265000	265000	265000	275600	275600	275600	275600