Operations Management
Operational Management Simulation on Benihana Case
1. What were the take aways and what did you learn?
2. What would you do differently next time?
There are many performance indicators for the success of a business. This include brand identity, reputation, innovation, leadership, productivity, process management, customer satisfaction, and quality to name a few.
Management at Benihana can achieve maximum profitability by maximizing utilization, throughput time, making use of batching, designing of the bar and catering to the optimum number of customers. By varying the hours of operation and carefully balancing operation costs, they can meet customers’ demands and yet maximize overall profit.
Batching
The first decision to see if the restaurant is served with no-batching policy, will it be a better strategy. Running tests against both scenarios (batch and no-batch), it shows that Benihana is already doing well by staying with the batch policy.
Using batching, Benihana improves the average utilization of the dining room capacity from 45% to 57%. They can serve a 275 dinners using less tables (35) compared with no batching which only could have catered to only 204 dinners using more tables (46). With less tables to serve the costs of serving drinks and dinner is substantially lowered, driving down total costs. Higher revenue (from extra sales) and lower costs increases profits.
Bar-restaurant design
The bar concept in Benihana is a good model because not only it allows customers a place to hang out while waiting for their table to be ready for seating, it also serves as an extra source of revenue. In fact, the revenue is so high that some of Benihana’s newer restaurants have increased their floor space to dedicate a larger bar area. When the “Design” of the bar factor is considered independently, the initial simulation shows that optimum bar seats versus table set up is at 79/12. This brings nightly profit to $156 with the high revenue from bar
1. What were the take aways and what did you learn?
2. What would you do differently next time?
There are many performance indicators for the success of a business. This include brand identity, reputation, innovation, leadership, productivity, process management, customer satisfaction, and quality to name a few.
Management at Benihana can achieve maximum profitability by maximizing utilization, throughput time, making use of batching, designing of the bar and catering to the optimum number of customers. By varying the hours of operation and carefully balancing operation costs, they can meet customers’ demands and yet maximize overall profit.
Batching
The first decision to see if the restaurant is served with no-batching policy, will it be a better strategy. Running tests against both scenarios (batch and no-batch), it shows that Benihana is already doing well by staying with the batch policy.
Using batching, Benihana improves the average utilization of the dining room capacity from 45% to 57%. They can serve a 275 dinners using less tables (35) compared with no batching which only could have catered to only 204 dinners using more tables (46). With less tables to serve the costs of serving drinks and dinner is substantially lowered, driving down total costs. Higher revenue (from extra sales) and lower costs increases profits.
Bar-restaurant design
The bar concept in Benihana is a good model because not only it allows customers a place to hang out while waiting for their table to be ready for seating, it also serves as an extra source of revenue. In fact, the revenue is so high that some of Benihana’s newer restaurants have increased their floor space to dedicate a larger bar area. When the “Design” of the bar factor is considered independently, the initial simulation shows that optimum bar seats versus table set up is at 79/12. This brings nightly profit to $156 with the high revenue from bar