Sample Solution

1) The problem identified in the case study is that Fat Angelo’s Italian Restaurant is experiencing customer balking due to long wait times, resulting in lost revenue.

2a) Quantifying the lost revenue due to customers balking can be estimated using the following formula: Number of Balking Customers * Average Check = Lost Revenue. According to Exhibit 4, there were 200 customers who balked between 5-6 pm on Friday, and their average check was $50; therefore, the lost revenue due to customer balking was $10,000.

2b) Potential bottlenecks to turning tables more rapidly include a lack of staff or too few servers available for seating, an inefficient seating process where guests are seated at tables only when all seats are ready (versus partially filled), slow food service that causes delays between courses and overall slower service times than necessary, irregular kitchen staffing levels resulting in inefficient ticket processing times for orders placed by waiters and large menu items that require longer cooking times.

2c) Calculating the customer wait time for each period yields the following results: Between 5-7 pm on Friday night there were 105 customers with an average wait time of 44 minutes; between 7-9 pm there were 98 customers with an average wait time of 36 minutes; and between 9-11 pm there were 97 customers with an average wait time of 30 minutes.

2d) The impact of balking customers on Fat Angelo’s bottom line would be significant considering they are losing out on potential sales from those who choose not to dine because they do not want to experience a lengthy waiting period -this translates into missed opportunities for sales profits as well as losses related to associated costs such as labor expenses incurred while preparing their meals. Additionally, it could create a negative reputation which may deter other potential diners from visiting Fat Angelo’s Italian Restaurant altogether if word gets out about lengthy waiting periods throughout peak hours thus further exacerbating any financial losses already incurred from individuals choosing not dine because of it.

2e) Evaluating the impacts of Groupon and early bird discounts shows that offering these types discounts could potentially increase customer traffic during off peak hours but could also reduce customer loyalty during regular peak hours since people tend take advantage promotions such as this ones which offer them savings regardless what day/time visit restaurant so long meets criteria set forth by promotion being offered (e.g., minimum spend before discount applies). It’s important note however whether additional resources will need allocated order execute promotional campaigns effectively without impacting quality service provided traditional patrons outside promotional window(s). It should also noted potential tradeoff taking place here whereby increased footfall expected bring higher revenues but lower profits due discounted rates factored into equation related cost savings/profitability per patron served relative normal tariff charged nonpromo visits .

2f Performing break even analysis for groupon option looks like this : Break Even Point = Fixed Costs / (Selling Price – Variable Cost). In this case fixed costs would include cost running promoting necessary attract enough patrons cover cost associated setting up campaign variable costs represent actual food & beverage components purchased fulfill orders placed promocode holders point selling price refers tariffs paid patrons its possible calculate profit margin different scenarios using same formula simply adjusting either selling variable accordingly example increasing selling price reduce variable cost slightly still remain profitable yet sustain healthy bottomline outcome respective situation .

2g Based data presented within context provided recommend against utilization Groupon address problem Douglas has outlined primary reason stated above regarding potential tradeoffs experienced when deploying type promotions establishment particularly one limited bandwidth allocated resources required maintain exceptionally high standards delivery services including quality meet expectations loyal patrons have come accustomed receiving along usual brisk pace environment associated bustling restaurants end day providing highly favourable promo packages open market might mean sacrificing level offerings already present historically strong support base detriment otherwise sound enterprise .

2h Recommendations provided enhance customer waiting experience include exploring possibility opening up reservations system allow visitors schedule arrival times advance thereby reducing queue formation physical location upon arrival ensuring proper staffing levels adequately accommodate any influx demand result opting reservation route introducing tier based pricing menu options differentiate offerings depending occasion desired thus addressing specific needs individual diners varying budget constraints restructuring current layout facilitate easier flow traffic amongst dining areas reconfiguring arrangement booths chairs table sizes smooth movement around restaurant minimize disruption meal leisurely stroll through premises creating ‘double sided queue’ allowing two groups form simultaneously rather single lane assist dispersal guests evenly

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