Benihana Case

1)

Sales and costs (percentages are relative to gross sales, unless stated otherwise) | Percentages | Dollars/yr | | Typical Restaurant | Typical Benihana Restaurant | Typical Benihana Restaurant | Gross Sales | 100% | 100% | $1,300,000 | Food Sales | 70-80% | 70% | $910,000 | Beverage Sales | 20-30% | 30% | $390,000 | Food cost, % of food sales | 38-48% | 30% | $273,000 | Beverage cost, % of beverage sales | 25-30% | 20% | $78,000 | Gross profit | 55-65% | 73% | $949,000 | Labor, benefits | 35-40% | 10% | $130,000 | Advertising | 0.75-2% | 8-10% | $130,000 | Rent | 4.5-9% | 4-7% | $65,000 | Other (supplies, isc., utilities, admin, maint., insurance, royalties) | 10-20% | 10-15% (no royalties) | $150,000 |
Between 7 pm and 8 pm, once again on average, we find there to be about 1 minute between arrivals, increasing back to 4 minutes per arrival from 8 pm to 9 pm. If the average party size is 4, then we can sum up these averages to be (60/4*4) + (60/1 * 4) + (60/4 *4) = 360 customers, which is BH’s demand. With 15 tables and batching, BH has a capacity of 15*8= 120 seats at any given time and since the average dining time observed from the simulation is 1 hour, the total capacity within the 3 hour period is 120*3= 360. Since capacity meets demand, one would think the utilization rate should be 100%, but yet for the 15 table simulation run earlier, we find the number to be at 52.21%. The reason for this is that there is variability in demand, size of a party, and even in the dining times. Customers don’t always arrive at a steady stream of 8 per table. There is a higher concentration between 7 pm and 8 pm, in comparison to the other timeframes during which demand can’t be met with capacity while during other times, there will be unused capacity. Customers also don’t always arrive in a perfect batch of 8; a batch of 7 might leave one seat unused. And sometimes, customers tend to stay longer than the average one hour, causing a bottleneck in the
If 14 tables clear every hour, then one table clears ever 60/14 = 4.29 minutes. A customer entering the 54-seater bar would be 55th in line, thus just making the 7th batch in line. The 7th batch in line would have to wait approximately 7 X 4.29 = 30 minutes before being seated at a dining table.
5)
The bar: * increases turnover and efficient allocation of seats * facilitates batching and eliminates variability in the batch size which allows for profit maximization * standardizes the variability of customer throughput * It allows for an opportunity to generate additional revenue while customers wait to be seated in the dining room
The chef: * reduces service time by standardizing training and skill set * delivers consistency in product * turnover is faster and higher capacity because the chef force feeds the customer while making the food * Increases price to customers because it adds an entertainment value * reduces customer anxiety because their food is prepared in front of them * customers don't get bored if they are amongst boring company because they get to see their food being prepared in a stylish way * Reduces fixed costs because less kitchen space required and more space can be given to dining room thus allowing higher potential to earn revenues
Limited