Case Study 1 Sweet Sisters' Cakery Using Operations to Create Customer Value Carmela and Vittoria are two sisters that own Sweet Sisters' Cakery, an upscale bakery in the trendy neighborhood of Five Points in Columbia, South Carolina. They selected the location because it is near many high-end restaurants, cafes, and entertainment. The bakery has an excellent reputation for its services, which include a decorate your own cupcake bar and personalized occasion cupcakes. A recent marketing survey revealed that Sweet Sisters' client loyalty is directly related to the fun, friendly atmosphere customers experience at the bakery. While the products and services are slightly more expensive than other nearby establishments, the interactive environment, well-trained staff, and unique homemade products are worth the price. The only problem that emerged from the survey was the occasional delays in some deliveries. Carmela has hired your consulting company to take a fresh look at their business operations. Vittoria, who controls the finances of the company, cautions you to focus on operations within the current set-up. Operational Details Upon arrival, customers enter a retail area, where they can pick out a treat from the counter and either enjoy it in a comfortable seating area or proceed to the designated design your own cupcake station at the side of the store. For occasion cakes, an appointment is required; when customers arrive, they are greeted by Carmela, the cake designer, and taken to a special meeting room closed off from the hustle and bustle of walk-in customers. The customers can choose from a variety of different cupcake options. The cupcakes are made and packed in trays of 10 cupcakes each. All items are produced in a state-of-the-art kitchen in the back of the facility. The decorate your own area consists of two counter stations with five stools each. The number of staff working every day in kitchen and at the retail area, and the number of hours they work, varies from day-to-day. The Cakery has a higher demand on Saturdays because of the Soda City Market that happens every Saturday morning, which brings a large number of people to downtown Columbia. As Carmela is the baker, there is usually an employee taking care of retail customers. Another employee is there as a cupcake decorator to run the decorate your own stations. The cupcake decorator works the reception area when not with decorating station customers. Financials You've asked the sisters which product was most profitable: cupcakes sold over the counter, the ones sold at the decorate your own cupcake bar, or the personalized occasion cupcakes. Vittoria did not know the answer to this question, so she gathered the daily sales and costs data for the three types of products and created the following table: Over the Counter Special Occasions Decorate your own 15 120 45 $4.00 $3.50 $5.00 $40 Average Cupcakes Sold per Day Average Price per Cupcake Labor Cost per Day ($) Material and Space Cost per Day (5) $110 530 $15 $120 $30 Q1. What are the competitive capabilities of Sweet Sisters' Cakery? (Group 1) Q2. Calculate the output, input and productivity for Over the counter sales (Group2) Q3. Calculate the output, input and productivity for special occasions sales (Group3) Q4. Calculate the output, input and productivity for Decorate your own sales (Group4) Q5. Based on all the information, what steps you would recommend the Cakery take to improve profitability? Focus on production side (Group 5) Q6. Based on all the information, what steps you would recommend the Cakery take to improve profitability? Focus on customer services side (Group 6)