BA 2005 Operations Management

Assignment #2 - Solutions

Question 1 (25%)
Based on information given in the case and your understanding of service process design, discuss
the reason(s) behind Benihana of Tokyos cost advantages over a typical restaurant in terms of
food cost (% of food sales) and labor payroll (% of gross sales) as well as the reason(s) behind
Benihana of Tokyos higher advertising cost (% of gross sales) compared to a typical restaurant.

1. Food Cost: Benihana of Tokyo offers only limited food selections (4 points). This allows the
company to significantly reduce the amount of food waste (4 points), which leads to its cost
advantage over a typical restaurant in terms of food cost.

2. Labor Payroll: With the innovative service process and the arrangement of hibachi tables,
the chefs at Benihana of Tokyo perform multiple tasks, including cooking (4 points) and
entertaining the diners (or perform for the diners) (4 points). In contrast, a typical restaurant
needs to hire waiters and waitress to interact with customers. Therefore, Benihana of
Tokyos service process can significantly reduce the size of the workforce (4 points), which
leads to another cost advantage over a typical restaurant in terms of labor payroll.

3. Advertising Cost: For a service business like Benihana of Tokyo, it has to continuously
make its points of differentiation known to customers through advertising, which leads to the
restaurants high advertising cost (5 points).

Question 2 (25%)
a. the precedence diagram (5 points)

B(35) D(35)
H(25)

A(30)

C(30) E(15) G(40)

F(65)

b. work station cycle time (5 points)

 60 . 450
C= = = 75
( ) 360

c. (10 points)

Cumulated
station Candidate choice Task time Idle time
Task time
A A 30 30 45
1 B,C C 30 60 15
E E 15 75 0
2 B,F F 65 65 10
B,G B 35 35 40
3
D,G G 40 75 0
D,H D 35 35 40
4
H H 25 60 15
275 .
d. Efficiency = = 475 . = 91.66% (5 points)

Question 3 (25%)
= 10, = 15, s = 1 (5 points)

10
a. = = 15 = 66.67% (4 points)

b. 1 0 = 66.67%(4 points)
(one desk busy) (one desk busy) = 66.67% 66.67% = 44.44%

c. 0 = 33.33%(4 points)
 (one desk idle) (one desk idle) = 33.33% 33.33% = 11.11%

d. = 1.33 customers (4 points)

e. W = 0.2h = 12mins (4 points)

Question 4 (25%)
= 20, = 15, s = 2 (5 points)

a. 1 0 1 2 = 1 0.2 0.27 0.18 = 0.35 (5 points)

b. = 1.07 customers (5 points)

c. W = 0.12h = 7.2mins (5 points)

d. Yes. Because [Average time spent in the system] is less after the service desks are
consolidated. (5 points)