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Kristen Cookie Company - Term Paper Example

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The following is a study on the production process of Kristen Cookie Company. The paper evaluates the chosen production system which is made to order if it is aligned with the production objective of the business…
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Kristen Cookie Company
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Download file to see previous pages Computation of the company’s optimum capacity compared to its break-even point also revealed that the present production system cannot make the company viable because optimum capacity is almost equal to break-even point. Having identified the weaknesses in Kirsten Cookie Company, recommendations were made on how to eliminate the bottleneck in production and how to make the company more viable and competetive in general. I. Introduction Background information  Kristen’s Cookie Company is a company that I co-own with my roommate. We operate in an on-campus apartment with the university students and personnel as our primary market. The initial idea of the company is to bake fresh cookies to order, using any combination of ingredients that the customer wants. The cookies that were ordered will be available for pick up within an hour. Thesis of the case study  This study will investigate whether the chosen production process which is the made to order is the most profitable mode of production considering the kind of market that we have and the facility and opportunity available to us. During the course of its investigation, it is important to note that the organization is a start-up company and is operated and manned by its owners (me and my roommate) and as such, this limitation should be considered in the assessment of the organization to arrive at an accurate findings where realistic recommendations can be made where it is appropriate. II. Methodology SWOT Analysis SWOT provides an organization the environmental assessment of which it operates and thus provides the framework to determine the appropriateness of Kristen Cookie Company’s production process. It includes both the internal and external factors of an organization’s environment. The internal factors involve the internal capability of an organization as expressed by the strength and weakness of SWOT. The external environment of an organization is expressed in the opportunities and threats of the SWOT (Beagrie, 2004). SWOT provides a reality check in determining the appropriateness of the elected production process in the initial phase of Kirsten Cookie Company. Strength Making cookies through made to order has a marketing appeal of having a product that is freshly baked right from the oven cookies. Compared to the make to stocked cookies, they are fresher and relatively tastes better. Producing cookies through made to order minimizes risk because the company keeps no inventory of its finished products that has the potential of incurring loss due to spoilage and waste when it is not sold before its expiration date. Weakness The make to order production of cookies limits the production capacity of the business according to the number of orders which are done in almost real time (one hour before the customer can pick up their cookies). It also does not optimize production capacity and makes the facility vulnerable to idleness during off season. It is also vulnerable to opportunity cost because the company’s commitment to sell freshly baked cookies which the customers can pick up after an hour of ordering implies opportunity lost with demands foregone during the day (the business only operates at night and has a commitment that customers can pick up their cookies after an hour of ordering). Given the capacity of its facility, the make to order production system also has a bottleneck in the baking stage where it will compile buffers as it takes longer to bake (10 mins) before the next batch will arrive (6 mins for the 3 trays to complete). ...Download file to see next pagesRead More
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