Kristen Cookie Case

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6. The oven and the baking activity is the bottle neck Because this activity has the longest activity

time [9 minutes, (9+10) minutes, (9+10+10) minutes for 1-dozen,2-dozen,3-dozen] whatever the size of order. If we add another oven, the cycle time will reduce by half and the capacity will increase. Because the two oven do the same job, so the cycle time reduced by half after add the second oven. The reason of capacity increase is for 1-dozen, the oven and the baking activity has the longest activity time 9 minutes. So the capacity is 60/9=6.67 dozen. If we add a new oven, because they do the same job, so the oven and the baking activity will only take 4.5 minutes. Because Washing and Mixing process take (6+2) minutes. So it becomes longer than the oven and the baking activity now. The bottom neck is change to Washing and Mixing process. The new capacity for 1-dozen after add a new oven: 60/8=7.5 dozen. So the capacity of making cookie process increase. Because capacity increase, the capacity is decided by bottom neck, the cycle time is the time complete bottom neck, so cycle time must decrease when capacity of making cookie process increase. For 2-dozen, before add the second oven, the capacity of the oven and baking activity is 60/19=3.15 dozen. After add the second oven, oven and baking activity only take 9.5 minutes. The mixing and spooning process take (6+2x2) =10 minutes. So capacity becomes 60/10 = 6 dozen. For 3-dozen. Before:60/29=2.06 dozen. After:60/ (29/2) =4.13 dozen. From the number I calculated above, I find out that capacity increase whatever the size of order is.

How much money am I willing to pay to rent an additional oven is depending on how much extra profit I can earn after rent this additional oven. The Max amount I am willing to pay the rent is equal to the extra profit I can earn because of using this additional oven.