Jan. 3,200 July 4,800 Feb. 2,600 Aug. 4,200 Mar. 3,300 Sept. 3,800 Apr. 3,900 Oct. 3,600 May 3,600 Nov. 3,500 June 4,200 Dec. 3,000
Gretchen’s Kitchen is a fast-food restaurant located in an
ideal spot near the local high school. Gretchen Lowe must
prepare an annual staffing plan. The only menu items are
hamburgers, chili, soft drinks, shakes, and French fries. A
sample of 1,000 customers taken at random revealed that
they purchased 2,100 hamburgers, 200 pints of chili, 1,000
soft drinks and shakes, and 1,000 bags of French fries. Thus,
for purposes of estimating staffing requirements, Lowe assumes that each customer purchases 2.1 hamburgers, 0.2 pint
of chili, 1 soft drink or shake, and 1 bag of French fries. Each
hamburger requires 4 minutes of labor, a pint of chili requires
3 minutes, and a soft drink or shake and a bag of fries each
take 2 minutes of labor.
The restaurant currently has 10 part-time employees who
work 80 hours a month on staggered shifts. Wages are $400
per month for regular time and $7.50 per hour for overtime.
Hiring and training costs are $250 per new employee, and
layoff costs are $50 per employee Lowe realizes that building up seasonal inventories of hamburgers (or any of the products) would not be wise because of
shelf-life considerations. Also, any demand not satisfied is a
lost sale and must be avoided. Three strategies come to mind.
• Use a level strategy relying on overtime and undertime,
with up to 20 percent of regular-time capacity on overtime.
• Maintain a base of 10 employees, hiring and laying off as
needed to avoid any overtime.
• Utilize a chase strategy, hiring and laying off employees as
demand changes to avoid overtime.
When performing her calculations, Lowe always rounds to
the next highest integer for the number of employees. She
also follows a policy of not using an employee more than
80 hours per month, except when overtime is needed. The
projected demand by month (number of customers) for next
year is as follows:a. Develop the schedule of service requirements (hours per
month) for the next year.
b. Which strategy is most effective?
c. Suppose that an arrangement with the high school enables the manager to identify good prospective employees without having to advertise in the local newspaper.
This source reduces the hiring cost to $50, which is
mainly the cost of charred hamburgers during training. If
cost is her only concern, will this method of hiring change
Gretchen Lowe’s strategy? Considering other objectives
that may be appropriate, do you think she should change
strategies?
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