Operations - Capacity utilization

The Scene: APPRENTICE season Three, Episode One

Two teams compete, promoting a new Burger King (BK) Triple Cheese Burger
(TCB)

Objective: sell the most TCBs!

Rules: Both teams still need to serve customers who order the ordinary
burgers (OB), though the profits of OB sales are not counted for their
competition.

Contestants: Magna (Booksmarts), consisting of ten members with college
degrees

Team Networth (Streetsmarts), consisting of ten high-schoolers

Outcome: Magna lost to Networth

Your assignment: Analyze Magna’s operations to see what went wrong.



Process Flows: The above figure shows Magna’s process flows and
staffing of BK’s indoor operations.

Personnel assignment: Team Leader (Todd) assigned roles as follows:

2 members as outdoor performers attracting more customers to enter the
restaurant,

2 members as order receivers (operating separate cash registers),

4 as cooks (1 for TCB and 3 for OB), and

1 as order assembler.

Todd himself works as team coordinator without operating any specific
jobs.

The Work: An order receiver takes 1 minute to introduce TCB to a
customer and 1 minute to receive the order, whether a customer chooses
TCB or OB. Making a TCB takes one member 3 minutes; making an OB takes
one member 2.5 minutes. The Order Assembler assembles 150 orders (either
kind of sandwich) per hour.

The Hours: The contest operates 4 hours (from 11:00am to 3:00 pm).

Marketing Efforts & Effects: The two performers’ outdoor marketing
effort attracts customers who enter the store. Table below shows the
different hourly demand rates.

Condition \ Time Slots 11am-Noon Noon-1pm 1pm-3pm

Hourly customer arrival Rates WITHOUT outdoor marketing 72 108 44

Hourly customer arrival Rates WITH 2 members outdoor marketing 80 120 50

Customer Behavior: After their orders are taken, customers leave the
line and wait in the seats. If a customer finds, upon entering the
store, that there are 20 or more customers in line waiting to reach the
order receivers, the customer leaves and doesn’t return.

Assume also: 1/4 of the customers choose TCB, the rest choose OB.

Customers arrive at a uniform rate during each time period listed in the
table above.

Each customer orders exactly one burger, either a TCB or an OB.

All burgers (OB and TCB) are made to order to guarantee freshness (no
WIP, no finished burgers).

Fill in the capacity & utilization rates for Magna with outdoor
marketing 11am -noon in the diagram boxes.

Process stage TCB Intro & Order Receive Sandwich making TCB Sandwich
Making OB

Order Assembly

Capacity







Utilization



How many TCBs does Magna sell with outdoor marketing from 11am to 3pm?

Team member Kendra does not agree with Todd’s arrangement. She
proposes the following:

Todd joins the order receiving team, and is devoted to taking TCB
orders. His line is called “TCB exclusive”. The other two order
receivers take only OB orders then.

Stop the outdoor performances and reassign those two members to indoor
service. They stand at the entrance of the store, introduce TCB to each
customer entering the store, and direct them to join one of the
different queues (TCB queue or OB queues). Todd and the other two order
receivers then only receive the orders, since TCB intros are already
done.

Suppose introduction of TCB to one customer still takes one member 1
minute and order receiving takes 1 minute as usual. Again, if a customer
finds, upon entering the store, that the total number of customers in
line waiting to reach the order receivers is 20 or more, the customer
leaves and doesn't return.

Based on Kendra’s proposal, describe or draw how the process flow
diagram would be changed (5 points)

If Kendra’s proposal is adopted, what is/are the system bottleneck(s)
from noon to 1:00pm.? What is/are the bottleneck(s)
capacity(capacities)? (4 points)

If Kendra’s proposal is adopted, will Magna sell more TCBs than under
Todd’s arrangement? Justify your answer.

Now suppose more realistically that customer arrivals are NOT perfectly
uniform, but show some variability. The team members who introduce TCBs
to entering customers are also not completely deterministic in the
amount of time they take on their spiel. The other operations (order
receiving, sandwich making, and packaging) are much more routine, and
have low variance. Suppose that after the lunch rush, one of the TCB
introducers goes to catch up on email, leaving just one team member to
handle the introductions. The system performs as shown in the table:

Observed values 1-5 p.m. Minimum

(minute) Maximum

(minute) Mean

(minute) Standard Deviation Variance

(minute2)

Time between Customer arrivals 0.80 10 1.2 .96 .92

TCB introduction time (one order introducer) 0.55 3.8 1.0 .6 .36

How many customers on average do you expect to be in the store but not
yet greeted between 4 and 5 p.m.?

How would you use your workforce between 1 and 5 p.m. to manage the
variability in the system?



PAGE 2

PAGE 1

TCB

Introduction

&

Order

Receiving

(2 members)

Sandwich making TCBs

(1 member)

Sandwich making OBs

(3 members)

Order Assy

(1 member)

TCB

OB

Orders (customers)

in lines