Concept explainers
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 amid $7.50 per hour for overtime. Hiring amid training costs are $250 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 amid must be avoided. Three strategies come to mind.
- Use a level strategy relying on overtime and under time, 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:
- Develop the
schedule of service requirements (hours per month) for the next year. - Which strategy is most effective?
- 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?
Want to see the full answer?
Check out a sample textbook solutionChapter 10 Solutions
MyLab Operations Management with Pearson eText -- Access Card -- for Operations Management: Processes and Supply Chains
Additional Business Textbook Solutions
Principles Of Operations Management
Operations Management
Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
Operations Management
Business in Action
Loose-leaf for Operations Management (The Mcgraw-hill Series in Operations and Decision Sciences)
- CARLA'S QUICK SERVICE RESTAURANT JOB⁹² Carla works at a typical quick service restaurant (QSR). She is never involved in any problem-solving activities because the system dictates they must defer to man- agers when problems arise. In addition, she has never been asked to provide any input at the store level of the organization. Her manager tells her what to do and micro-manages her work. Daily information, sche- dules, and work methods changes (e.g., when new menu items are introduced) are posted on notes in a break room bulletin board. Carla isn't very happy in her job and is thinking of quitting to find something else. She has seen about half of her coworkers quit in the last year. Discussion Questions 1. High attrition rates in the QSR industry may be attributed to low levels of employee engagement within the organization. How does high turnover impact product quality and customer service in the QSR industry, as well as the costs to the organization? 2. How can Carla's manager or…arrow_forwardPlease help to answer below with refer to attached. How would staffing for the opening of a new hotel or resort differ from that of an existing property? What data might Starwood rely upon to make sure the new property is not over- or understaffed in its first year of operation?arrow_forwardDefine the term time based competition.arrow_forward
- Table 1 illustrates a typical traditional procurement process. This process is for relatively low- value items that do not need authorisation by a senior manager. Develop the new e-procurement process in table 2.arrow_forwardClimate Control, Inc., makes expedition-quality rain gearfor outdoor enthusiasts. Management prepared a forecast ofsales (in suits) for next year and now must prepare a produc-tion plan. The company has traditionally maintained a levelworkforce strategy. All nine workers are treated like familyand have been employed by the company for a number ofyears. Each employee can produce 2,000 suits per month.At present, finished goods inventory holds 24,000 suits. Thedemand forecast follows:Use the Sales and Operations Planning with SpreadsheetsSolver in OM Explorer or develop your own spreadsheetmodels to address the following questions.a. Management is willing to authorize overtime in pe-riods for which regular production and current lev-els of anticipation inventory do not satisfy demand.However, overtime must be strictly limited to no morethan 20 percent of regular-time capacity. Managementwants to avoid stockouts and backorders and is notwilling to accept a plan that calls for shortages.…arrow_forwardWhich Quantitative Method could be most applicable in the following business operations: Ensuring that there is always a fresh stock of vegetables to choose from when preparing meals in the kitchen of a 5-star hotel. Planning and executing ROYTEC's All Inclusive Carnival Fete on Carnival Saturday Scheduling the required amount of waitresses at a large restaurant during the day including peak times.arrow_forward
- Sterling's worksheet, Intake vs.Goals Report & Food Log. Sterling is 30 years old college graduate. Currently he works for the federal government as program analysis. During the pandemic Sterling was promoted, work has been extremely busy. Dusty working from home, he has had little time to cook or exercise. During this annual physical, the doctor reported that he had gained 50 pound. Sterling wonderd it eat came from the beer, he drank 1 every evening. Sterling exercises about an hour on Saturday and Sundays. He used exercise daily when he was college athlete. His lab work and blood pressure were not the best either. The doctor counseled him and referred him to the nutrient. Sterling shared that his father saferd heart attack at age 50 and his mother has hypertension, he realizes that this risk for cardiovascular diseasearrow_forwardUse the graph to answer the following question: INV B - o A C ROP TIMEarrow_forwardOPERATIONS MANAGEMENT A retail shopping chain decided to improve its customer service, productivity and reduce its transportation costs by shifting its existing central warehouse to a new location. For this purpose, the company collected data of its existing three retail shops as shown in Table 1. Table-1 Sales Volume X and Y Coordinates Location (in Units) of the location Location - 1 36 (8, 4) Location – II 29 (4, 9) Location IlI 15 (5, 5) Question-1: Evaluate the data in Table - 1 to arrive at the coordinates of new central warehouse which is supposed to be optimum and improve the productivity of this retail chain Explain all the steps. A grocery shop based in UAE found that its inventory strategy of ordering the raw material is not appropriate. Due to this, the company's productivity has been consistently decreasing in the recent past and the production also stopped many times due to the non-availability of raw material and increased the stock-out costs and total inventory cost.…arrow_forward
- Zychol Chemicals Corporation Bob Richards, the production manager of Zychol Chemicals, in Houston, Texas, is preparing his quarterly report, which is to include a productivity analysis for his department. One of the inputs is production data prepared by Sharon Walford, his operations analyst. The report, which she gave him this morning, showed the following: 2006 2007 Production (units) 4,500 6,000 Raw material used (barrels of petroleum by-products) 700 900 Labor hours 22,000 28,000 Capital cost applied to the department ($) $375,000 $620,000 Bob knew that his labor cost per hour had increased from an average of $13 per hour to an average of $14 per hour, primarily due to a move by management to become more competitive with a new company that had just opened a plant in the area. He also knew that his average cost per barrel of raw material had increased from $320 to $360. He was concerned about the accounting procedures that increased his capital cost from $375,000 to $620,000, but…arrow_forwardThe Union Manufacturing Company is producing two types of products: A and B. The demand forecasts, batch size, and time standards follow: Demand forecast (units/yr) Product A Product B 1,000 4,000 Batch size (units/batch) Processing time (hr/unit) 20 10 3.2 4.5 Setup time (hr/batch) 10 20 Both products are produced on the same machine, called Mark I. 11) Using Table 4.1, what is the total number of hours required of Mark I equipment for the next year? A) fewer than 29,000 hours B) between 29,000 and 30,000 hours C) between 30,000 and 31,000 hours D) more than 31,000 hoursarrow_forwardThe following are some check points: * Problem 6: Month 9 forecast: 26.333; Month 9 error: -3.333 * Problem 7: Month 7 forecast: 22.68; Month 7 error -0.68 * Problem 16A: ROLLED DOWN unit forecast for part C is 22, F is 2, I is 254, and L is 3.arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,