Restaurant Business on an Example “Benihana Restaurant” Essay Example

(55). Batching helps reaching capacity in dining room during the peak hours. On the other hand, there is the disadvantage of losing customers during the non-peak periods, in which the time needed in order to complete batches is more than the waiting time that customers are willing to spend.

What is the optimum size of the bar for maximum profitability?

The maximum profitability that can be achieved is $242. 38 on average with 79 bar seats and 11 dinner tables. The maximum night profit in this scenario is $ 476. 51. This night there was also increased dinner table utilization to 77. 6% which resulted in dinner revenues of $2,890 and bar revenues of $1,159. Even though dinners bring in more revenue than drinks, as we also saw in challenge 1, our analysis showed that maximizing the number of dinner tables increased our fixed labor costs. This led us to believe that using more bar seats was the way to go to increase nightly profits.

What is the optimal dining time across an evening?

In the Benihana restaurant, diners normally take approximately 60 minutes. As proved from the different simulations, the optimal dinning time is 45 minutes for pre-peak period, 45 minutes for peak period and 75 minutes for post-peak period, which maximizes profit to $220 on average with the maximum profit reaching $594. 10 in one night. This also resulted in having only one (1) lost customer on average and maximizing the dinning room utilization to 63. 85 for the most profitable night.

How do marketing efforts affect operations and profitability?

The best advertising scenario was to invest 0. x normal budget, run “Happy Hour” promotion

and open the restaurant one hour earlier at 5 o’clock. This scenario led us to an average profit of $458. 07 and a maximum nightly profit of $851. 31. This is because the advertising campaign also raises general awareness and “Happy Hour” together with one more hour of operation increases traffic, while discount promotion would increase traffic by decreasing profitability at the same time. Finally, if we had a very high advertising budget we could not cover it to increase profitability under the given data of capacity of the restaurant.

What is the impact of more complex forms of batching?

The best scenario is to have tables of 8 from the opening until 8pm and tables of 4 to 8 from8pm to 10:30pm. This is the most profitable scenario with an average profitability of $126. 06 because we become more flexible between the middle of peak hours until the closing of the restaurant. This is the period in which flexibility is requested, as we had the bigger problem of losing customers because of the not reaching the requested number of filling a batch. The average utilization remains almost stable, at 57%.

Experiment with different combinations of decisions. The combination of the best alternatives from the previous challenges seems to be the among the most profitable ones at $507. 72, while there is a slight improvement of $3. 67 in profitability with a change in dining times (50 minutes – 45 minutes – 60 minutes respectively). What changes between the different scenarios is the number of drinks served. We need to serve less drinks for the same number of dinners served. This will lower our costs and will

be achieved through decreasing the waiting time between bar and dinner room.