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What Is The Impact of Batching During Peak and Non-Peak Periods?

This document summarizes the results of several simulations run to optimize operations and profitability at a Benihana restaurant. The key findings are: 1) Batching customers into tables of 8 during peak hours increases throughput and average profit compared to no batching. 2) The optimal bar size is 79 seats and 11 tables to maximize average profit. 3) Shortening the dining time to 46 minutes during peak hours from 7-8PM increases turnover and average profit. 4) A "Happy Hour" advertising campaign with a budget of 1.5x normal generates the highest profit. 5) Batching tables of 8 is best during opening hours and peak periods, with no batching from 8-10

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Nehir Altıparmak
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433 views2 pages

What Is The Impact of Batching During Peak and Non-Peak Periods?

This document summarizes the results of several simulations run to optimize operations and profitability at a Benihana restaurant. The key findings are: 1) Batching customers into tables of 8 during peak hours increases throughput and average profit compared to no batching. 2) The optimal bar size is 79 seats and 11 tables to maximize average profit. 3) Shortening the dining time to 46 minutes during peak hours from 7-8PM increases turnover and average profit. 4) A "Happy Hour" advertising campaign with a budget of 1.5x normal generates the highest profit. 5) Batching tables of 8 is best during opening hours and peak periods, with no batching from 8-10

Uploaded by

Nehir Altıparmak
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Dilan Nehir Altiparmak Benihana Simulation OIE501 – Fall 2021

[1.5 points] Challenge 1: How many additional customers can Benihana service with batching?
What is the impact of batching during peak and non-peak periods?
According to the simulation, it was clear that operating without batching was not an option. The
restaurant not only not makes a profit, but also loses money. With batching, the average profit is
$83.64, and without it, the average profit is $-282.29.

Nightly Profit Total Revenue Revenue Bar Revenue Dinner Use Batching

$83.64 $3,090.57 $392.07 $2,698.50 Yes

The tables of 8 were used below capacity with parties of 1 and 2 for the duration of a meal
without batching. Therefore, the average waiting time went up from 11.35 minutes to 36.76
minutes. Also, the number of lost customers rose up to 96 from 19.
Batching would be better to be restricted to peak hours. During the non-peak hours, the batch can
be reduced, or the restaurant can permit smaller groups to occupy tables. Batching should be a
flexible option reduced to peak periods.
[1.5 points] Challenge 2: What is the optimum size of the bar for maximum profitability?
In this challenge, I found that the best option was to have 79 seat at the bar area and 11 tables at
the restaurant. While with 87 bar seats and 10 tables the utilization was higher, the average profit
had a peak on 79 bar seats and 11 tables.

Profit Total Revenue Revenue Use Bar Rest. Avg.


Revenue Bar Dinner Batching Size Size Utilization

$196.32 $3,502.37 $944.37 $2,558 Yes 79 11 71.49%

[1.5 points] Challenge 3: What is the optimal dining time across an evening?


In the original setting, there exists an equal distribution for all the time periods, which is a fixed
60-minute duration. However, when observed the peak times and average dining time of the
customers, it is clearly seen that 60 minutes is too long a time for the peak hours. If the dining
time was limited to 46 minutes during the peak times, the turnover rate would be increased and
the average profitability would reach a maximum. For the non-peak times, the duration didn’t
really matter, the overall profitability stayed approximately the same.

Profit Total Revenue Revenue Open to 7PM- 8PM-


Revenue Bar Dinner 7PM 8PM 10:30PM

$142.94 $3,094.54 $230.04 $2,864.50 46 min 46 min 60 min

1
Dilan Nehir Altiparmak Benihana Simulation OIE501 – Fall 2021

[1.5 points] Challenge 4: How do marketing efforts affect operations and profitability?


The most profitable option as an advertising campaign was the “Happy Hour” after trying all the
options. The awareness building campaign generate a little profit, but Happy Hour passed the
other two options by far. The Discount Campaign caused losses, rather than generating profit.
Therefore, I decided to go with the “Happy Hour” campaign. As per the opening time of the
restaurant, I decided to go with 5PM, since people who left their workplaces come directly to the
restaurant if it opens before 6PM. As expected, 5PM generated more profit than any other time in
the simulation too. The best budget for the campaign was observed to be 1.5 times the normal
budget. This way, the average profit got much higher than it was before the campaign.

Profit Total Revenue Revenue Advertising Advertising Opening


Revenue Bar Dinner Budget Campaign Time

$495.81 $3,924.93 $327.93 $3,597 1.5x Happy Hour 5:00PM

[1 point] Challenge 5: What is the impact of more complex forms of batching?


For the peak period, there is no other option but to batch the tables with groups of 8 as seen in
previous challenges. As observed previously, batching at times other than the peak hours would
cause lost time in terms of customer service, and the customers not agreeing to wait between
8PM-10:30PM made non-batching a better option for that time frame. For the opening, it wasn’t
easy to decide with which option to go, but batching with tables of 8 seemed to be the most
profitable option.

Profit Total Revenue Revenue B.T. (Open B.T. (7PM B.T. (8PM
Revenue Bar Dinner – 7PM) – 8PM) –10:30PM)

$95.58 $3,263.37 $678.87 $2,584.50 Tables of 8 Tables of 8 None

[3 points] Challenge 6: What decisions will produce the highest throughput? What decisions will
produce the highest profit? 
Even though I was tempted to choose the most profitable options in each case for the best design,
I soon figured that it wouldn’t be the most profitable option. The main strategies I needed to use
were that batching, especially during peak periods, is a more efficient way to use the tables,
dining times should be kept short during peak times but it doesn’t matter how long it’s kept other
than the peak times, the aim for advertising should be to maximize the utility during the peak
hours. With these points in mind, I came up with the following setup:
- Bar seats: 71 Seats; Restaurant: 12 Tables
- Dining Times: Open-7PM: 46 min., 7PM-8PM: 45 min., 8PM-10:30PM: 64 min.
- Advertising Campaign: Happy Hour, 2.3x Normal Budget
- Restaurant Opening Time: 5PM
- Batching Type: Tables of 8 at all times

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