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Pikes 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.

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 Pikes 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 Pikes Pizza is operating at capacity at lunch and everyone will buy small pizzas, should Pikes 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?

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