HW-6 Spring 2024_Paramount_OL_CaseWorkers_OM235

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Mountain View College *

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Apr 3, 2024

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1 OM 235 Homework-6 Spring 2024 Please place each of your answers inside the rectangular box that follows each question. Each question is worth one point unless otherwise indicated. There is a total of 20 potential points. Name: Emily Jaime Question 1. DynamicPhysical. DynamicPhysical (DP) has the same value proposition and business model as XtremePhysical in our earlier homework . Its process is also similar to XtremePhysical’s, though some of its details and operational characteristics vary slightly. Currently DP is only seeing 25 clients per day. However, they could see more customers without needing to add resources. DynamicPhysical’s employees are all salaried, making them essentially a fixed cost. That and their other fixed costs amortized over their 25 patients per day is $95 per patient. Their revenue per patient and cost of test materials per patient are the same as XtremePhysical’s at $200 and $20 per client . a. What is DynamicPhysical’s operating leverage? Operating Leverage = Contribution margin/total profit per unit Contribution margin: 200 20 = 180 Fixed Cost per patient = 95/25 = 3.8 Total Cost per Patient: 3.8 + 20 = 23.8 Total Profit per Unit: 200 23.8 = 176.2 Operating leverage: 180/176.2 = 1.02 b. If DynamicPhysical can somehow increase their sales by 5% through a marketing campaign, what will be their percentage increase in profit? (Hint: use the operating leverage from the prior problem.) 1.02*5 = 5.1% c. How many clients does DynamicPhysical have to see each day to break even? Round up if needed. Break-ever Point = FC/(Revenue per client - VC) = (95 * 25) / 200*20 = 13.1944 1.022 5.11% 13.19
2 Question 2. The manager of Free Wolf’s Bur rito, Joe, thinks that he can improve the process at the serving counter by redesigning it so that the customer only has contact with one employee server. Process before redesign Process after redesign Which of the following statements below are true after the redesign ? Answer true or false into the answer boxes. a. Free Wolf’s process’s capacity will increase. b. Chris can be sent home during off times. c. A particularly problematic customer will not keep all other customers from being served. d. Customers appreciate only having to deal with one employee. e. The total time the customer spends waiting for a burrito will likely increase. True True True True False
3 The remaining questions concern the “ Breakfast at the Paramount” case. Important note: Please ignore Exhibit 8, the “Fundamentals of Analyzing…” You are not responsible for knowing it. Question 3 . What is the advantage to the Paramount of signing on with Doordash? a. It would probably increase demand during off periods. b. It would increase the throughput of chefs cooking for dine-in customers during busy periods. c. It would improve the dine-in customer experience. Question 4 . a. How long was the wait between reaching the front door of the Paramount and eating during breakfast time in minutes? b. How long did it take the average table to turn over (in minutes)? c. What is the average number of customers in a party? d. How many seats does the Paramount have? Question 5 . How did the Paramount make waiting more pleasant for customers? For each of the questions below, enter “true” or “false” into the answer box . a. They would offer orange juice during the summertime during busy periods. b. Customers can watch the chef cooking their food. c. Allow delivery services’ representatives to wait in line along with customers. d. Well-trained, pleasant employees. 45 min 19 min 2.6 44 A True False True True
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4 Question 6. In the space below, draw the process at the Paramount from when customers enter the line (3 pts) until when they exit. Include delays due to waiting. For each operation, list processing time as well as the important resources involved. Make sure to show at least 3 operations (there may be more). This question will be graded on completion . Customers wait in line Customer places order Customer watches food get prepared Customer gets drink served Customer pays Customer gets seated