Question

Pizza is a new local lunch time pizza parlor with one store location. Pizza making is a multiple step process. The first two steps, mixing the dough and making the sauce, can be done simultaneously during off peak times. Sauce and balls of dough can be refrigerated and stored. These activities are not included in the problem. During the lunch rush, there are three main steps to pizza making: assembly, baking, and boxing. Once an order is placed, the chef begins the assembly of the pizza. The chef takes the ball of dough and tosses the ball of dough into the round pizza crust. The chef spreads the sauce on the crust then adds the required toppings. The other friend completes the remaining steps of baking and boxing. The assembled pizza is placed in the oven and baked. The pizza is taken out of the oven, cut and placed in a box for pick up. Customers pay for the pizza at the time of pick up. Pizzas come in three sizes. The oven can hold multiple pizzas at a time, but it is dependent on the size of the pizza. Pizzas can enter and exit the oven at any time as long as the number does not exceed the maximum. The following chart shows the time, material costs, price, and oven capacity for each pizza size.

For 1 Pizza	Small	Medium	Large
Assembly
Tossing crust	2 minutes	3 minutes	4 minutes
Sauce and topping	2 minutes	2 minutes	3 minutes
Baking
Place in oven and baked	12 minutes	15 minutes	18 minutes
Boxing
Cutting/ paying	1 minute	1 minutes	1 minute
Ingredient cost	$2	$3	$4
Price	$7	$8	$9
Max pizzas in Oven at one time	5	5	4

3.a Assuming that only large pizzas are sold at lunch, what is the maximum capacity of this system during the 2 hour lunch period? What part of the operation is the bottleneck? Please list any assumptions and discuss how you arrived at your conclusion. 3.b Pizza is considering running a special on small pizzas for lunch. The small pizza promotion would lower the price to $6 for a small pizza. Assuming that Pizza is operating at capacity at lunch and everyone will buy small pizzas, should Pizza offer a special lunch price small pizza? 3.c What are the challenges for scheduling the pizza operations? What capacity cushion would be appropriate? Why would you use a capacity cushion? ?

Answer 1

a) Maximum capacity is - 28 pizzas at lunch time. The chef takes the ball of dough and tosses the ball of dough into the round pizza crust and then spreads the sauce on the crust then adds the required toppings.. Assumptions are:

1- It takes 18 minutes to bake 4 pizzas. Hence, it will take 120 minutes to bake 28 pizzas.

2- The most important part of preparing pizza is baking, which is taking the longest time. The task of cutting and payment is at the bottleneck as consumer satisfaction rely on this step of the parlour.

b) I believe that Pizza should offer a special prize during lunch for small pizzas as this will lead to more sales and more revenue as compared to sale during rest of the day.

c) Challenges in scheduling pizza operations:

1- Demand: It is not necessary that people will come and buy small pizza only.

2-Cost: Pizza has to ensure that they do not go into loss after providing offer on small pizzas.

Capacity:

Pizza needs to check the capacity of labours working in the parlour and the amount of pizzas being delivered. It needs to be near to the customers and take care of the peak demand periods.

Capacity cushion is nothing but it is the desired output that is produced. It is important that a business has a capacity cushion in order to deal with the peak demands for the activity. The Pizza parlour should use Moderate capacity cushion to deal with the situation. In this strategy, the firm is more conservative with respect to capacity. This is used to satisfy unexpected changes in demand as long as the changes are not so different from the forecast. This is used when the cost is approximately in balance of the cost of excess capacity.