OPERATIONS MANAGEMENT CASE KRISTENS COOKIE COMPANY Contents I

OPERATIONS MANAGEMENT CASE: KRISTEN’S COOKIE COMPANY

Contents I. SUMMERY OF THE CASE II. QUESTION 2 III. QUESTION 3 IV. QUESTION 4 V. QUESTION 5

SUMMERY OF THE CASE • You and your roommate are preparing to start Kristen's Cookie Company in your on-campus apartment. • The company will pro-vide 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 orders to accept.

QUESTION 2. 1 Q. Should you offer special rates for rush orders? A. There is no need to get special rates. Because we received the order and would begin production Q. Suppose you have just put a tray of cookies into the oven and someone calls up with a “crash priority” order for a dozen cookies of a different flavor. Can you fill the priority order while still fulfilling the order for the cookies that are already in the oven? A. Impossible. Because of the one produced in the oven and tray, then a bottleneck will occur. In order to resolve bottlenecks in the oven and the tray is a way to increase the number.

QUESTION 2. 2 Q. If not, how much of a premium should you charge for filling the rush order? A. In my opinion, the special order for a minimum base price plus the premium value should be. Therefore, the base price of 1 dozen variable cost 0. 6 $ + cost of the box 0. 1 $ charges must be honed. ※Original cost + variable cost 0. 6 $ + cost of the box 0. 1 $

QUESTION 3. 1 Q. When should you promise delivery? A. If I complete delivery on a day the client wants, it can be good. But, In the event that I could not finish delivery because of many orders, it is best way for me to complete delivery within one day. Q. How can you look quickly at your order board (list of pending orders) and tell a caller when his or her order will be ready? A.

QUESTION 3. 2 Q. How much of a safety margin for timing should you allow? A. Now, it is hard to suggest clear breakeven because I don't have specific estimates like amount of orders, but in case of the same cookies. When it is the same kind of cookies, time for dough and the other parts is the same and because a timing where bottleneck happen is oven, if I do not purchase the addition ovens, the safety margin is a timing where bottleneck do not happen.

QUESTION 4 Q. What other factors should you consider at this stage of planning your business? A • The services and products of competition company • Aspect of health (well-being) • Strategy human resource management • Effective marketing strategy • Making major customers' e-mail address database

QUESTION 5. 1 Q. Your product must be made to order because each order is potentially unique. If you decide to sell standard cookies instead, how should you change the production system? A. We need more inventories.

QUESTION 5. 2 Q. The order-taking process? Other policies? A. When I bake a kind of cookies, the method, make to order, is more beneficial in the cost. But, if I sell standard cookies, I should choose not the method, make to order, but the method, make to stock. BTO (Build to order) BTS (Build to stock)

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