Learning_Curve_Theory

Learning Curve Theory Donna S. LaLonde University of Phoenix OPS/571 Jamie G. Shockley-Caffee January 20, 2010 Week 2 Mario has turned over his pizzeria to his grandson for two months to see if he can help the pizzeria make a profit and implement changes to control the waiting time and queue length which will affect the process in the restaurant. If after two months of implementing the proposed changes and Mario is pleased with the outcome, the grandson will receive the restaurant. The decision that was made was to have 10 tables of four and eight tables of two with a wait staff of four and a kitchen staff of two. Mario’s grandson has to meet with the employees and explain to the employees that a performance metric will be conducted. The employees are the people that are responsible for the work and these same employees are most knowledgeable about the work and the customers. During the meeting the group will identify the critical work processes and the customer requirements. As a manager identification will be made of the critical results desired and what the customers need. Also as a manager a list of established performance goals will be set to achieve the maximum production. As a manager Mario’s grandson will have to explain to the employees that measurements cost money. As the acting manager of Mario’s pizzeria one has to choose what is useful for the pizzeria. An example would be the goal the pizzeria is trying to achieve, question if this would be the correct metric and then measure the metric to see if the goal is attainable. Some of the factors that Mario’s pizzeria has to consider is the business objectives and the customer’s needs. The decision that Mario’s grandson made about the amount of tables of four and the tables of two along with the wait staff and kitchen staff increased sales but due to the ovens being slow in processing the cooking time some of the customers left without being served. So the decision was made to purchase a conveyor oven from Plax and also to assist the wait staff and kitchen staff the decision was made to purchase the Menupoint System. Purchasing the new oven and shutting down the old ovens reduced the mean processing time from 15 minutes to 4 minutes and a wait time from 13 minutes to 8 minutes which in turn increased the profit. Also since the Puff Pastry business was vacant, the decision was made to rent this empty establishment which gave Mario’s business much needed space for the customers which inturn increased the tables of four to seven and an additional four tables of two. Completing this transaction has an established wait time of 3.42 minutes and a queue length to 2.79. To apply the learning curve concepts to test the alternative process against the existing process Mario should use the unit and cumulative average theory. From the simulation the findings revealed how if a manager would increase the wait staff or the kitchen staff and the designation of tables how many customers walked out without being waited on and how much the company lost. According to Louis Yelle “the most important finding is that costs have been observed to decrease in a predictable manner as the quantity of an item produced increased. Some of the studies show that the number of units produced in a repetitive process doubles, the cost to produce the doubled quantity declines. “ So with the new equipment that the employees have to learn to use, the wait time and baking time should decrease which again would please the customers, make the company money and keep Mario happy. All of the decisions that were made increased the sales and kept the customers happy and coming back for repeat business. Depending on how the business grows instead of renting the Pastry shop, Mario’s grandson might consider purchasing the building after the clientele is established and the proof shows that purchasing in lieu of renting would increase the business profit. References The Learning Curve. Retrieved from http://fast.fass.gov/pricing/98-30c18.htm on January 15, 2010 Yelle, Louis E. (1967). The Learning Curve: Historical Review and Comprehensive Survey. Operations Management – Mario’s Pizzeria Scenario. Retrieved from https://ecampus.phoenix.edu/secure/aapd/vendors/tata/sims/operations/operations_simulation1.html on January 14, 2010.