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 26 customers enter the bar and 60 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 90 spaces), the bar (64 seats), the dining room (110 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 $8 per drink; the dining room customer orders a meal with an average price of $21; the restaurant's cost per drink is $2, and the direct costs for meal preparation are $4.

Answer 1

2-a

Computation of occupied capacity

BAR

Current bar patrons                                                    26

Expected Increase                                                     50%

Expected Bar patrons (a)                                           39

Average stay in hours (b)                                           2

Occupied capacity (a)*(b)                                           78

DINING ROOM

Current dining room patrons                                    60

Expected increase                                                   20%

Expected dinning room patrons (a)                          72

Average stay in hours (b)                                         1

Occupied capacity (a)*(b)                                         72

Computation of parking space used

BAR

Occupied capacity of bar (a)                                       78

No. per Car (b)                                                            1.5

Parking space used (a)/ (b)                                         52

DINING ROOM

Occupied capacity of the dining room (a) 72

No. per car (b)                                                                3

Parking space used (a)/ (b) 24

Area	Capacity	Expected occupancy	Excess/ (shortage)
Bar	64	78	-14
Dining Room	110	72	38
Parking	90	76	14

There would be a capacity constraint in the Bar Area & the capacity needed to overcome the constraint would be 17

                                                                  

2-b

Computation of total occupancy per day

BAR

Bar patrons                                       32

Average occupancy in hours         2

Occupancy level per hour              64

Total occupancy per day
(from 6 pm to 10 pm)                     256

DINING ROOM

Dining Room patrons                      72

Average occupancy in hours         1

Occupancy level per hour              72

Total occupancy per day 288

Expected Throughput margin

Area	Price	Cost	Margin	Occupancy	Daily margin	Monthly
Bar	$8	$2	$6	256	$1536	$39936
Dining Room	$21	$4	$17	288	$4896	$127296
Total					$6432	$167232

Daily Expected Throughput Margin                         $6432

Monthly Expected Throughput Margin                  $167232