Question

Required information Taylor's is a popular restaurant that offers customers a large dining room and comfortable bar area. Taylor Henry, the owner and manager of the restaurant, has seen the number of patrons increase steadily over the last two years and is considering whether and when she will have to expand its available capacity. The restaurant occupies a large home, and all the space in the building is now used for dining, the bar, and kitchen, but space is available on the property to expand the restaurant. The restaurant is open from 6 p.m. to 10 p.m. each night (except Monday) and, on average, has 22 customers enter the bar and 48 enter the dining room during each of those hours. Taylor has noticed the trends over the last 2 years and expects that within about 4 years, the number of bar customers will increase by 50% and the dining customers will increase by 20%. Taylor is worried that the restaurant will be not be able to handle the increase and has asked you to study its capacity. In your study, you consider four areas of capacity: the parking lot (which has 78 spaces), the bar (54 seats), the dining room (98 seats), and the kitchen. The kitchen is well-staffed and can prepare any meal on the menu in an average of 12 minutes per meal. The kitchen, when fully staffed, is able to have up to 20 meals in preparation at a time, or 100 meals per hour (60 min/12 min x 20 meals). To assess the capacity of the restaurant, you obtain the additional information: • Diners typically come to the restaurant by car, with an average of 3 persons per car, while bar patrons arrive with an average of 1.5 persons per car. • Diners, on average, occupy a table for an hour, while bar customers usually stay for an average of 2 hours. • Due to fire regulations, all bar customers must be seated. • The bar customer typically orders one drink per hour at an average of $7 per drink; the dining room customer orders a meal with an average price of $22; the restaurant's cost per drink is $1, and the direct costs for meal preparation are $5. Required: 1-a. Given the current number of customers per hour, what is the amount of excess capacity in the bar, dining room, parking lot, and Kitchen? 1-b. Calculate the expected total throughput margin for the restaurant per day, and month (assuming a 26-day month). 2-a. Given the expected increase in the number of customers, determine if there is a constraint for any of the four areas of capacity. Nhat is the amount of needed capacity for each constraint? 2-b. If there is a constraint, reduce the demand on the constraint so that the restaurant is at full capacity (assume some customers would have to be turned away). Calculate the expected total throughput margin for the restaurant per day, and month (assuming a 26- day month).

Answer 1

DATENII a Calculation of Excess Capacity: In Bar: Total Capacity = 54. Seats Avg. Customers per houm = 22 As the Customers Sit for 2 hours. Max. Capacity utilised will be 22x2 - 44 seats Hence, Encess Capacity : 54-44 = 10 seat, in dinner Total Capacity : 98 Seats - Aug. Customers per hour = 48. Hence Excess Capacity = 98-48 = 50 seats in Parking : Total Capacity = 78 spacer, ( Space used by dinner Customers 48 Colomers - 16 Spaces (1) Space used by Bar Customers 22 Customers 15 Spaces 1 5 persen Cox 3 perpes Car I per Car As the Bar Costorners Stay for 2 hours R Max Space used in any hour in aday will be 2x15 - 30 spaces. Hence, Mari Total used = 30t 16 = 46 spaces Excess Capacity 32 spaces In kitchen. It is well staffed, Man Capacity 100 meals per - animum orders per hour = 48 Orders Revo classmate Hene, Excess Capacity : 52 mealace ID per Hour

Ane 816) Throughput Margin pear day. for dinning: Margin per meal = 22 - $5 sale price Cost $17 Total Total Customer Crotone in a day : in a day = 48 in an hours 1 488 4hrs = 192 Customers in a day Totay Margin for dining = $17 x 192 $ 3264 Cost for Bar: Margin per drink $7 - price = $b Max. Tota Custorners in a day - 22 per 1st hour - and stay for 2 hours. - In 2nd Hour, Another 22 persons - Hence, In a day, - - - Total Customers = 22 + 44+ 4y + 4y = 154 Customers a Totas Margin for Bar a 154 x$6 - $ 924 Mence, Totas Morrgin in a day - $9247 $3264 - $4188) Throughput Margin per month e $4188 x 26 days $ 108,8884 -

After the In Born: In dinner. Increase in Costornen asi By 50 percent ine, 11 Customers By 20% sie, 10 Contornes As, there is an hour, ample there excess is no Copacity for Constraint Seat dinner for dinner Parking Space encess Capacity - 32 spaces, Iricnease in Cors: due to dinner Customers = 10 = 4 spaces due to Bar Customers = 11 - 8 spaces. Hence there is no Constraint in parking to Bor Custornens = 11 acas too.

In Bar As the no. of Customers visitings each hour is increased by 11 each hour For 1st hour. 33 customers can be seated For 2nd hour! There is only 54-33=21 seats left Hence, when 33 Customer visit Bar and howo, Only 21 Can be seated, the rest 12 Customers shall be sent back. in for gode uth: Same as above. sent back per hour Hence, 12 Customers are for 3 hours. re tota = 36 s Customers in a day Hence Tota no of Customers visiting Bar 33 54 +54 +54 195 customers

Expected Total Throuput Margin in a day. For dinner. $178 58x 4 = $3944 For Bar: $648195 Customers = $1170 Total per day = $5114 Throughput Margin per month - 1$132964 $5114 x 26 days $ 132 964 classmate PAGE