Kukinis Company

You and your roommate are preparing to start Kukinis (KUe keKINIan) Company in your on- campus apartment. The company will provide fresh cookies to starving students late at night. You need to evaluate the preliminary design for the companys production process to figure out many variables, including what prices to charge, whether you will be able to make a profit, and how many orders to accept.

Business Concept

Your 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 your apartment within an hour.

Several factors will set you apart from competing products such as store-bought cookies. First, your cookies will be completely fresh. You 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, you 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. You guarantee completely fresh cookies. In short, you 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. You and your roommate already own all the necessary capital equipment: one food processor, cookie trays, and spoons. Your apartment has a small oven that will hold one tray at a time. Your 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 your time (what value do you place on your 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 your roommate has figured out how to do quickly and with 100 percent accuracy. (Actually, you and your 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 your personal computer, it does not take any of your lime.) Therefore, this step will be ignored in further analysis.

You and your 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 your food processor. The mixing bowls hold ingredients for up to 3 dozen cookies. You then dish up the cookies, one dozen at a time, onto a cookie tray. These activities take six minutes for the washing and mixing steps, 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.

The next step, performed by your roommate, is to 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 lime is 10 minutes, during the first minute of which your roommate is busy setting the oven. Because the oven holds only one tray, a second dozen takes an additional 10 minutes to bake.

Your roommate 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 cookies from the oven takes only a negligible amount of time, but it must be done promptly. 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 Kukinis 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 will be put aside for now.

1. Begin your analysis by mapping the process cookie-making.

2. Determine the capacity in a night, assuming you are open four hours each night?

3. What is the critical element to determine its capacity? Explain your answers!

Kukini's Company You and your roommate are preparing to start Kukini's (KUe keKINlan) Company in your campus apartment. The company will provide fresh cookies to starving students late at night. You need to evaluate the preliminary design for the company's production process to figure out many variables, including what prices to charge, whether you will be able to make a profit, and how many order to accept Business Concept Your 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 your apartment within an hour. Several factors will set you apart from competing products such as store-bought cookies. First, your cookies will be completely fresh. You 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, you 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. You guarantee completely fresh cookies. In short, you 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 cook scool, and, finally, take the cookies off the tray and carefully pack them in a box. You and your roommate already own all the necessary capital equipment one food processor, cookie trays, and spoons. Your apartment has a small oven that will hold one tray at a time. Your landlord pays for all the electricity. The variable costs, therefore, are merely the cost of the ingredients (estimated to be 50.60/dozen), the cost of the box in which the cookies are packed (50.10 per box; cach box holds a dozen cookies), and your time (what value do you place on your 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 your roommate has figured out how to do quickly and with 100 percent accuracy. (Actually, you and your 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 your personal computer, it does not take any of your lime. Therefore, this step will be ignored in further analysis. You and your roommate have time 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 your food processor. The mixing bowls hold ingredients for up to 3 dozen cookies. You then dish up the cookies, one dozen at a time, onto a cookie tray. These activities take six minutes for the washing and mixing steps, regardless of how many cookies are being made in the batch. That is, to mix enough dough and ingredients for two doven cookies takes the same six minutes as one dozen cookies. However, dishing up the cookies onto the tray takes two minutes per tray. The next step, performed by your roommate, is to 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 lime is 10 minutes, during the first minute of which your roommate is busy setting the oven. Because the oven holds only one tray, a second dozen takes an additional 10 minutes to bake. Your roommate 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 cookies from the oven takes only a negligible amount of time, but it must be done promptly. 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 Kukini'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 will be put aside for now. 1. Begin your analysis by mapping the process cookie-making 2. Determine the capacity in a night, assuming you are open four hours each night? 3. What is the critical element to determine its capacity? Explain your answers! Kukini's Company You and your roommate are preparing to start Kukini's Kekek Ilan) Company in your campus apartment. The company will provide fresh cookies to starving students late at night You need to evaluate the preliminary design for the company's production process of many variables, including what prices to charge, whether you will be able to make a profit and how many order to seep Business Concept Your 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 your apartment within a hou set you put from competing products such as store boughts First, your cookies will be Second, you will have a variety of ingredients available to add to the basic dough including telephone in their orders and specify which of these ingredients they want in their cookies. You guarantee completely fresh cookies. In short, you will have the freshest, most cookies anywhere, available right on campus. 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