University of Phoenix Material

Kūkai空海Restaurant

Air & Sea (Kūkai) is an exotic wild game restaurant specializing in humanely treated and sustainable foods from our world’s skies and waters.

TABLE OF CONTENTS

Topic                                                                                                                 Page

Background and Strategy                                                                       2

Background – New Customer Count                                                     3

Background – Menu                                                                                4

Restaurant Rescue Tasks                                                                      5

Service Design                                                                                         5

Supply Chain Management                                                                    5

Quality Control – Food Waste                                                                  5-6

Improving Capacity: Investment Scenarios                                           7

Layout                                                                                                       8

Work Design                                                                                             9

Inventory Management                                                                                     9

Staffing – Aggregate Planning                                                                10

Resource Scheduling                                                                              11

Project Management                                                                               11

Summary Recommendations to Rescue Restaurant                                    11

Recommendation Implementation Metrics                                            11

Background and Strategy

Vision: Promote greater awareness of the diversity of eatables from around the world.

Mission Statement: To delight customers with an uncommon dining experience centered on wild game.

Financial: The financial situation is not good. For the two years of business, the first year our revenues were about $3 million and we broke even. This year are revenues are down 10% and we have a loss of $200,000. It is not trending well. In an effort to make more margin we changed the menu to less expensive game and fish, reduced portion sizes, raised the prices but added complementary warm bread and added more vegetables and starches to ensure customers felt full. Our highest margin is cocktails at 75% gross margin. With our current menu, our dinners average around 50% gross margin.

Customers: Our on-line ratings have fallen this year to 3.7 out of 5.0. Last year they averaged 4.3. Fewer customers are coming in. Our average weekend dinner count is about twice the number of customers than weekdays (see Customer Count below). Customer satisfaction surveys are generally not returned and when they are returned seem to be only from complainers. Dinner is served from 5pm until 10pm when the kitchen closes. At around 11pm we get a little of the cocktail crowd and we close and lock up at midnight. City ordinance requires we let no one in after 2am but existing patrons can stay until 3am, yet we close at midnight. We stopped lunch service because staff costs outweighed revenue. Our margins on dinners are good if we can just get the customer coming in greater numbers. The number of returning customers is very low, but thankfully the Warehouse District is a high traffic area for new customers.

Staff: Minimal staff to be open is three, a chef, a waiter, and a bar tender. Last year, when the restaurant was completely full, we needed a minimum of six staff: three waiters, two chefs, and a bar tender. The waiters, chefs, and bar tender are not cross-trained, given their specialties. The staff mood is not always a good one and that might impact customer perceptions.

Supplies: This ocean port city provides great fresh fish supplies on a regular basis. Perishable greens and other eatables are harder to obtain fresh but are available in limited amounts at the farmer’s market for all but winter months. In winter, we switch to hardier root vegetables that keep well refrigerated. Birds are very difficult to obtain and we have needed to specialize on having several vendors catch or raise city pigeons and chickens for most of “air” sources of protein. Each morning the chef buys supplies for that evening’s meal from whatever vendor has the best value that day. Any perishables we cannot refrigerate are donated to the food bank by 5pm the next day (see Quality Control – Food Waste below). Waste is usually from pre-preparing too many of under-ordered meals. We cannot afford to ship anything in so we make do with what is locally available.

Deadline: We have to decide on signing a new 3-year lease with prices rising 10%. Building owners have given us a deadline of three months from today to sign or vacate within 60 days. If you cannot help, it does not seem we will be in business a year from now. Help rescue this restaurant!

Background – New Customer Counts

Background – Menu

Appetizers

Seared dove breast with orange sauce served on crispy bread                                                    $14

Smoked unagi (eel) on a bead of white rice                                                                                $12

Soups & Salads

Bird-Broth soup                                                                                                                         $10

Seaweed salad                                                                                                                          $8

Caesar salad                                                                                                                             $6

Signature Dishes

Calamari steaks in creamery butter and lemon sauce served with fresh cut French green beans     $26

Squab breast in orange sauce with sweet potatoes and broccoli cheese melt                               $24

Chicken and waffles with berry compote and garden greens                                                        $20

Catfish fritters with mixed green salad                                                                                        $18

Deserts

Chocolate lava cake                                                                                                                  $8

Assorted Gelato            Scoops                                                                                                           $6

Cocktails

Small vineyard wines available                                                                                                   $12

Imported Beers available                                                                                                           $7

Ask you waiter about our extensive specialty drinks

Restaurant Rescue Tasks

Service Design

• Define tradeoffs between restaurant menu choices (products) and processes to deliver those selections to customers.

Supply Chain Management

• Recommend top improvements in supply chain management.
• What is the expected impact of these improvements on restaurant operations?

• Examine food waste data and display X-bar and R Bar charts.
• Recommend ways to reduce food waste.

Improving Capacity: Investment Scenarios

Some research has been conducted to boost profitability through increased revenues, supply chain management, JIT/lean operations, and capacity planning. Each proposition is exampled along with probabilities of success. The bank will loan us up to $50,000 for profitable investments.

New Menu Theme: Focus on what is plentiful and fresh – fish and garden greens. Remake menu to incorporate market priced wild caught fish plus a few standard farm-raised favorites at affordable prices. Portions should be filling with accompanying greens and starches. Measurement of satisfaction and value – number of “doggie bags” used.

Investment: New menus, additional gross supply purchases over test period of 3 months, new food containers, used Sous Vide and a used flash freezer to reduce waste. Total direct costs $8,500. Probability of high demand (0.6), medium demand (0.3), low demand (0.1). Expected revenue of high demand is $30,000, of medium demand $15,000 and low demand is -$10,000.

Expand Sunday and bar hours: Open earlier and closer earlier on Sundays from 3pm to 7pm. Increase the bar hours by extending the close from midnight until 2am, Monday through Saturday, staffed with just the bar tender.

Investment: Staff costs and added cleanup cost $4,500 over a three-month trial. Probability of high demand (0.5), medium demand (0.2), low demand (0.3). Expected revenue of high demand is $15,000, of medium demand $5,000 and low demand is -$5,000. Measurement of success is double the customers after 10pm and 50% increase in liquor profits after midnight.

Reconfigure Tables and Bar: If expanding the bar times work then this second investment can be considered. Remove the back two tables and move and expand the bar to be across the width from the open kitchen. Position customers so they can see the kitchen activity.

Investment: Demolition and construction costs plus disruption of existing business is $35,000. Probability of high demand (0.3), medium demand (0.2), low demand (0.5). For the three-month trial, expected revenue of high demand is $75,000, of medium demand $50,000 and low demand is -$35,000. Measurement of success is quadruple the customers after 10pm and 250% increase in liquor profits after midnight.

Reconfigure Food Storage Area: Move storage area to back of restaurant, remove bar altogether, and use the freed-up space for more seating towards the front of the restaurant.

Investment: Demolition and construction costs plus disruption of existing business is $65,000. Probability of high demand (0.3), medium demand (0.1), low demand (0.6). For the three-month trial, expected revenue of high demand is $85,000, of medium demand $50,000 and low demand is -$65,000. Measurement of success is triple the new customers between 6pm and 8pm Monday- Saturday.

• Recommend and defend which option(s) are the best investment.

Layout

Located in the historic warehouse district of a large metropolitan port city, this long and narrow restaurant has a beautiful turn-of-the-century, high ceiling brick and beam structure.

Description: The building is a rectangular shape measuring 30’ wide by 70’ long by 30’ high. The Food Supply Storage area is 10’ wide by 25’ long by 30’ high. The kitchen is 15’ wide by 20’ long by 30’ high. Each 5’ by 5’ table can seat 4 people, 2 on each side of table facing either the front or back of restaurant. This allows plenty of aisle space for waiting staff and customers to come and go. Ideally, the Food Supply Storage space would be at the very back of the restaurant but that would probably require expense bathroom (WC), refrigerator, bar and kitchen relocations. The bar area seats 4. Including the bar, total customer seating is 40. The occupancy rating is 85. The kitchen activities can be seen by customers as chefs prepare the food on gas grills and ovens lending a visual experience to the dinning.

• Show some low cost and simple ways to improve the layout of the restaurant?
• How would these changes impact the operations for waiters, bar tenders and chefs?
• What would be the impact on customers?
• How could you measure the effect on customers?

Work Design

You make 30 observations of a waiter:

Based on this information:

• How many observations do you need to estimate the proportion of the waiter’s time spent on “Explaining the Menu”? Assume a 95 percent confidence (z = 1.96) that the resulting estimate will be within 5 percent of the true value.

Inventory Management

One item customers seem to request as a souvenir of the Warehouse District is the restaurant’s menu with the history and old pictures of the District on the back. These menus cost $10 each. Customers want to buy the menus at a rate of 20 per week. The restaurant operates 50 weeks per year. Ordering and shipping costs are $15. Annual holding costs are 20 percent of the unit cost. Lead time is 3 weeks. Using the information:

• Calculate the economic order quantity and reorder point.

• How many waiters, bar tenders and chefs would it take each night if Friday – Sunday doubled demand in all three areas?
• What would be the total cost of labor for the week?

Enterprise Resource Planning and Material Planning

• Explain how ERP compares with MRP and is ERP appropriate for this restaurant?

Resource Scheduling

Current daily hours of operations are 7 hours from 5pm to midnight. As supervisor of the restaurant staff, you would like to accommodate your employees requested times as much as possible. You have guaranteed your waiters at least 15 hours work per week.

Hailey: Because of caring for her child, can’t work before 7pm and wants weekends (FR-SU).

Rebecca: Wants only weekend (FR-SU) hours because better tips.

Anthony: Can’t work past 10pm and wants weekends (FR-SU).

1. Suggest a schedule that accommodates the various needs. Do not schedule any overlap time. Put scheduled and total hours in appropriate cells i.e. “5-12 (7)” means waiter is scheduled that day from 5pm to 12am for 7 hours of continuous work.

Project Management

You are planning renovation construction to change seating and bar capacity. The following information about the new project is provided. The information includes the activities, the three time estimates, and the precedence relationships.

• Determine the expected duration and variances of each activity.
• What is the probability that path 1, 3, 6, 7, 8 will be completed in 15 days?

Summary Recommendations to Rescue Restaurant

• List and defend the top five recommendations to improve operations management.

Recommendation Implementation Metrics

• Construct SMART Metrics for Top Five Recommendations. SMART stands for Specific, Measurable, Actionable, Relevant, and Timely.