Mario's_Learning_Curve

Running head: MARIO’S PIZZERIA LEARNING CURVE Mario’s Pizzeria Learning Curve Kathleen Breene University of Phoenix OPS 571 Operational Management Anthony Barnes January 18, 2010 Introduction Mario’s Pizzeria has been in business since 1950. The restaurant is located in an indoor mall in California. Times have changed since Mario began his venture, and the time has come to review the processes to determine if a different one would improve efficiency and profits. Waiting Currently at Mario’s Pizzeria the customer time spent waiting in long has been 11 minutes or more. Some customers do not stay and wait, and others complain. Unhappy customers stop coming and do not refer friends and family. So the question becomes how long should a customer wait in line for a slice of pizza' Mario believes it is important to maintain a balance between demand and capacity at his restaurant. The factors to consider are customer population, the waiting line, a service system, and a priority rule. Mario takes the conservative approach to these decisions. Current Process The current process at the restaurant consists of seating arrangements of 14 tables to seat four people, and no tables for two. Appendix A contains the process performance data under this process. The loss of sales is calculated to be $1,170, and profits are $1,023. The problem is the average wait time of 12 minutes. In one week 40 customers balked at the wait time and chose to leave. This is not the reputation Mario wants for his restaurant. Change The process needs to change in order for the restaurant to survive. The seating needs to change from the 14 tables of four to 10 tables of four and eight tables of two. This would allow smaller groups to be seated faster. Keeping the wait and kitchen staff at four and two respectively would be cost effective. Mario should also purchase one Plax ovens in place of the manual ovens. The Plax ovens would cost $4,500, but they would be able to make eight pizzas at a time with an automatic delivery conveyor belt. Purchasing Menu Point would increase the efficiency of the wait and kitchen staff. The hand-held units would have all the menu options available on them, and the order would immediately go to the kitchen. This potentially could decrease the wait time by five minutes. Mario would see a 125% ROI from the $45,000 purchase within the first year. References Cooper, D.R. & Schindler, P.S., (2006). Business research methods (9th ed.) Boston: McGraw-Hill Indiana University (2009, November 10). Economists forecast for 2010 looks better Relative to this year. ScienceDaily. Retrieved November 29, 2009 from www.sciencedaily.com Nicklaus, D. (2009). Economists say recession is over, but jobless rate will stay high Retrieved November 29, 2009 from www.stltoday.com Ritholtz, B., (2009). New home sales fall 21.3%, Retrieved November 29, 2009 from www.ritzholtz.com