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Benihana Operations Management
Simulation
Operational Challenges
This simulation models a typical night at a Benihana restaurant. The simulation runs through a
single evening demand cycle from 6:00 p.m. to 10:30 p.m.
It is organized as a series of challenges, each with a different set of options for managing
operations and demand. In all of them, your goal is to manage the bar and dining area to
maximize utilization, throughput, and most importantly profit for the evening.
The specific challenges are:
•Improve Throughput with Batching. How does batching strategy affect throughput?
•Design the Bar. What's the optimum size of the bar for maximum profitability?
•Change Dining Time. What is the optimal dining time across an evening?
B tD d ith Ad ti i dS i lP
•Boost Demand with Advertising and Special Programs. H
How will marketing efforts affect
ill k ti ff t ff t
operations and profitability?
•Use Different Types of Batching at Different Times. How do more complex forms of batching
affect operations and profitability?
•Design Your Best Strategy. What's the best combination of decisions that will produce the
highest profit?
1
04-12-2009
Customer Flow through Benihana
Customers Arrive
Customers Arrive Table
(in batches 1, 2, …N) 1 Sit, order, 1st course, 2nd course, …dessert, pay
2 Sit, order, 1st course, 2nd course, …dessert, pay
Drink Sit, order, 1st course, 2nd course, …dessert, pay
Batch Size=8
Bar 14 Sit, order, 1st course, 2nd course, …dessert, pay
Dining Hall
Customers Leave
(in batches close to 8)
Material Flow through Benihana
Table
Customers arrive Table 1
1
(in batches 1, 2, …N) Chef
2 Table 2
Drink
Batch Size=8
Bar 14
Dining Hall
Drinks
Pre‐Packed
Batches
Suppliers
Materials for Trolleys
Preparation
Back Kitchen
2
04-12-2009
Challenge 1: Batch Dining Room
Customers
How does batching strategy affect throughput?
How does batching strategy affect throughput?
What are the potential disadvantages of batching?
Profitability + Utilization
Dining Room
$1.733
Total Dinner Revenue Utilization
$2.785
$
60%
54%
50%
$1.124
Bar Revenue 42%
$397
40%
$3.013 30%
Total Cost
$2.873
20%
($156))
($
10%
Profit
$309
0%
Batching On Batching Off
($500) $0 $500 $1.000 $1.500 $2.000 $2.500 $3.000 $3.500
Batching Off Batching On
Batching offers Higher Profitability and Increased Dining Room Utilization
3
04-12-2009
Sources of Profitability
480
500
450
400
350
278
300
208
250
200
134
150 95
100 54
17 35
50
0
Batching On Batching Off
Operational Details
80
80
70 65 8
65,8
59,2
60 54
50
50
40 33,6
30 24,9 27
20
12
88
8,8 81
8,1 76
7,6
10
0,6 2,8
0
Bar Average Bar Max Bar Average Bar Max Wait Drinks Per Average Tables Average Meal
Customers Customers Wait Customers In Use Time
Batching On Batching Off
4
04-12-2009
Summary of Different Results
Challenge 2: Design the Bar
What's the optimum size of the bar for
maximum profitability?
Is having a bar a good idea?
5
04-12-2009
Bar with Batch Profit
$4.000 $500
$462
$452 $450
$3.500
$426 $3.367
$380 $400
$400
$3.000 $2.892
Total Cost $2.878
$3.201
$2.823 $2.964 $3.078
$2.709 $350
$2.836 $2.778
$2.796 $2.814 $2.776
$2.500 $308 $2.515
$314 $277 $300
Bar No Batch Profit
$4.000 $0
$3.689
$3.474
($16) ($20)
$3.500
Total Cost
Total Cost $3 373
$3.373 ($40)
$3.000 $3.188
$3.023
$2.925
$2.769 ($60)
$2.500 ($82) ($82) $2.372
$2.024 ($80)
$2.000 ($87) Total Dinner $2.005
$1.978
Revenue $1.610 $1.784 ($100)
$1.730
$1.500 $1.452 Bar Revenue
$1.505 $1.300 ($120)
($125) $1.387
$1.000 $1.139
($148) ($140))
($
$859
$500 $597 ($153) Profit ($160)
$0 ($180)
Bar 39 Bar 47 Bar 55 Bar 63 Bar 71 Bar 79 Bar 87
6
04-12-2009
Sources of Profitability
1200
1.090
1000
800
Bar 39
Bar 47
600 561 Bar 55
Bar 63
Bar 71
400 Bar 79
289 279 Bar 87
246
205
200 166
93 90
70
19 28
0
Drinks Sold Batch Drinks Sold No Lost Customers Lost Customers Dinners Served Dinners Served
Batch Batch No Batch Batch No Batch
Utilization of Assets
90% 13
12,2
12 1
12,1
80%
79% 12
11,6 11,5
Dining Room Utilization
70%
10,7 71% 11 Batch
64% Dining Room Utilization
No Batch
60% 9,8 10
59% Average Tables In Use
54% 9,1 Batch
50% 9
49% 51% Average Tables In Use
43% 44% 44% 46%
41% No Batch
7,9 40%
40% 8
Higher capacity utilization of Dining Hall … In addition to selling more drinks
7
04-12-2009
Summary of Different Results
Challenge 3: Change Dining Time
What is the optimal dining time across an evening?
Is it worthwhile to change the length of dining time?
Is it worthwhile to change the length of dining time?
Whey would you want to change it? Why?
What is the impact of changing the dining time?
What will changing the dining time do to dining room
utilization?
8
04-12-2009
Profitability + Utilization
$3.500
Dining Room Utilization
70%
$3.000
$3.000 $2.900
$ $2 860
$2.860 $2.884
$2.884 $2.878
$2.878 $2.911 64%
$2 821
$2.821 $2.785
61%
60% 58%
54% 55%
$2.500
50%
50%
$2.000 43%
40%
$1.500
30%
$1.000
20%
$0 0%
75/45/75 60/45/75 60/45/60 45/45/45 60/60/60 75/60/75 75/75/75
Throughput of Tables
Dinners Served
120
112 111 111 112 112 112 112 300
80 280
72,1 280
68,7
65,8
61,5 62,1
60 56,6 269
270
48,2
40 37 37 37 36 260
35 34 33 260
20
250
8,2 7,6 7 7,7 8,5 9
5,9
0
240
75/45/75 60/45/75 60/45/60 45/45/45 60/60/60 75/60/75 75/75/75
9
04-12-2009
Summary of Different Results
Challenge 4: Boost Demand with
Advertising and Special Programs
How do marketing efforts affect operations and
g p
profitability?
What worked, what did not and by how much?
10
04-12-2009
Summary of Different Results
Challenge 5: Use Different Types of
Batching at Different Times
What is the impact of more complex forms of
What is the impact of more complex forms of
batching?
Is it a good idea to use different times of batching at
different times?
Is, why and when would you do so?
11
04-12-2009
Profitability + Utilization
$3.500
Dining Room Utilization
$2.992 60%
$2.938 $2.939 $2.985
$3.000 $2.890 55%
$2.801
$2.801 53% 53%
$2.707 $2.704
50%
$2.520 50%
$2.500
41%
40%
$2.000
$1.731
30%
$1.500
$1.085
20%
$1.000
$701
$529 $532
$414 10%
$500
$325 $298 $297
$228
$0 0%
table8 / table8 / 4share / 4share / table4to8 / table4to8 / none / none / table8 / 4share / table4to8 table4to8 none /
table8 4share table8 / table4to8 / ($169)none table8 / 4share / / table8 / / none /
table4to8 table4to8 table8 4share table4to8 table4to8 none
($500) /
table4to8
Profit Total Cost Bar Revenue Total Dinner Revenue
Throughput of Tables
120
112 111 111
Dinners Served
300
100 280
2 0
270 271
87 253
250
80
207
65,7
63 200
59,6 59,4 59,7 59,8
60
53
42 44 150
41
40 35
100
20
11,9
7,6 9,1 9,1 9,7
50
0
table8 / table8 / 4share / 4share / table4to8 / table4to8 / none / none / 0
table8 4share table8 / table4to8 / none table8 / 4share / table4to8 table4to8 none /
table4to8 table4to8 table8 / 4share / / table8 / / none /
table8 4share table4to8 table4to8 none
Tables Served Average Tables In Use Max Customers /
Average Meal Time Average Customers table4to8
12
04-12-2009
Summary of Different Results
Challenge 6: Design Your Best
Strategy
What is the best combination to
maximize profitability?
i i fit bilit ?
13
04-12-2009
What are the Options?
• Batching Decisions (at different times)
– No batching
No batching
– Tables of 8
– Tables of 4 to 8
– 4 Share a Table
• Bar Decisions (7 to 87 Stools)
• Dining Time Decisions (45 to 75 at different times)
• Advertising Decisions
Ad ti i D i i
– Budget
– Campaign (Awareness Building, Discount Promotion, Happy Hour)
– Opening Times
Maximizing Profitability
Dining Room
$1.733
Total Dinner Revenue Utilization
$
$4.111
70%
62%
60%
$1.124
Bar Revenue
$498 50%
42%
40%
$3.013
Total Cost 30%
$3.961
20%
($156)
Profit 10%
$648
0%
($500) $0 $500 $1.000 $1.500 $2.000 $2.500 $3.000 $3.500 $4.000 $4.500 table8 / bar 79 / Batching Off (14
45‐45‐45 / happy Tables)
Batching Off (14 Tables) table8 / bar 79 / 45‐45‐45 / happy hour / 5pm hour / 5pm
14
04-12-2009
Operational Details
600
500 480
411
400
300
243
208
200
95 88
100 80
66 65 8
65,8 55,347,2 64
54 51 54 44,2
24,9 33,6 33
12 9,2 5 0,7 2,8 6,8 12
0
Drinks Sold Bar Bar Max Bar Bar Max Lost Drinks Per Dinners Tables Average Average Average Max
Average Customers Average Wait Customers Customers Served Served Tables In Meal Time Customers Customers
Customers Wait Use
table8 / bar 79 / 45‐45‐45 / happy hour / 5pm Batching Off
Maximizing Utilization
Dining Room Utilization
90%
$3.199
Total Dinner Revenue 81%
$4 111
$4.111
80%
70%
$1.166 62%
Bar Revenue
$498 60%
50%
$4.266
Total Cost
$3.961 40%
30%
$100
Profit 20%
$648
10%
$0 $500 $1.000 $1.500 $2.000 $2.500 $3.000 $3.500 $4.000 $4.500
0%
table8 / bar 79 / 75‐45‐75 / happy hour / 5pm
table8 / bar 79 / 45‐45‐ table8 / bar 79 / 75‐45‐
table8 / bar 79 / 45‐45‐45 / happy hour / 5pm 45 / happy hour / 5pm 75 / happy hour / 5pm
15
04-12-2009
Operational Details
700 662
600
500
411
400
350
300
243
200
88 88
100 66 77 60 61 70,7 72,1
55,3
51 44 44,2
28,2 26,2 33
12 9,2 5 0,7 2,1 6,8 8,9
0
Drinks Sold Bar Bar Max Bar Bar Max Lost Drinks Per Dinners Tables Average Average Average Max
Average Customers Average Wait Customers Customers Served Served Tables In Meal Time Customers Customers
Customers Wait Use
table8 / bar 79 / 45‐45‐45 / happy hour / 5pm table8 / bar 79 / 75‐45‐75 / happy hour / 5pm
Relative to “Typical Restaurant”
$1.933
Dining Room
Total Dinner Revenue Utilization
$4 111
$4.111
70%
62%
60%
$43
Bar Revenue
$498 50%
40%
$2.396
Total Cost 30% 26%
$3.961
20%
($419) 10%
Profit
$648
0%
table8 / bar 79 / "Typical
($1.000) ($500) $0 $500 $1.000 $1.500 $2.000 $2.500 $3.000 $3.500 $4.000 $4.500 45‐45‐45 / happy Restaurant"
hour / 5pm (Small Bar 7
Stools + 20
"Typical Restaurant" (Small Bar 7 Stools + 20 Tables NO Batch)
Tables NO Batch)
table8 / bar 79 / 45‐45‐45 / happy hour / 5pm
16
04-12-2009
Operational Details
450
411
400
350
300
243
250
193
200
150
111
100 88 84
66 59,7
,
51 50 55,3
55 3
44,2 42,9
50 33
12 9,2 1,5 15 6,8 11
0 0,9 6 5 0,7 0,1
0
Drinks Sold Bar Bar Max Bar Bar Max Lost Drinks Per Dinners Tables Average Average Average Max
Average Customers Average Wait Customers Customers Served Served Tables In Meal Time Customers Customers
Customers Wait Use
table8 / bar 79 / 45‐45‐45 / happy hour / 5pm "Typical Restaurant" (Small Bar 7 Stools + 20 Tables NO Batch)
Percentage Improvements
Value of the Bar Æ Batching with and without Bar
Value of Batching Æ Batching versus No Batching Same Bar Size
Value of Operational Flexibility Æ Batching with and without Changes in Operations Times
Value of Marketing Æ Batching with and without Marketing Changes
All Combined Batching On and Off Æ Best option relative to Scenario with Batch On and Batch Off
17
04-12-2009
Summary of Different Results
18