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).
a) 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

b) For Magna with outdoor marketing, draw the Inventory Diagram of orders (customers) in line waiting to reach the order receivers. Drag and resize line segments you need from the left margin onto the diagram template
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:
1. 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.
2. 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.
a. Based on Kendra's proposal, describe or draw how the process flow diagram would be changed (5 points)
b. 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)

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

d. 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?