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Feb 6 - Breakfast at Paramount

The document provides guidance for analyzing a case study about customer wait times and service experiences at a restaurant called the Paramount, including questions about factors that influence wait times, optimal seating policies, using queue calculators to analyze wait times under different arrival and service rates, and options for managing increased carryout orders.

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Claire Kropp
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340 views6 pages

Feb 6 - Breakfast at Paramount

The document provides guidance for analyzing a case study about customer wait times and service experiences at a restaurant called the Paramount, including questions about factors that influence wait times, optimal seating policies, using queue calculators to analyze wait times under different arrival and service rates, and options for managing increased carryout orders.

Uploaded by

Claire Kropp
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Assignment Questions

Please read and engage with the interactive exhibits in the multimedia case, "Breakfast at the
Paramount," and use the questions below to guide your preparation.
1) Based on your reading of the case, what factors contribute to and detract from dine-in
customers' service experiences waiting in line at the Paramount? How might Michael Conlon
redesign the process to improve the experience?
2) Analyze the Paramount's seating policy. How does the seating policy contribute to the
restaurant's capacity to serve customers? Why does it work?
3) Experiment with the queuing calculator in Exhibit 8 (or Consider Exhibits 6 and 7 in the case
and use the PK formula discussed during our 2nd webinar i.e., Lq formula in the Harvard
Queuing reading), and calculate the length of the Paramount's line. What happens when the
arrival rate (the number of customers arriving per hour) rises in relation to the service rate (the
number of customers served per hour)?
4) What advice do you have for Michael Conlon about how to respond to the increase in carryout
orders at the Paramount?

 Carryout orders represented 10% of sales


 Two meal services each day: 7-4:30 on weekdays, 8-4:30 on weekends
 Average breakfast/lunch ticket was $15 and 20% for carryout customers
 4:30 it closed for 30 minutes and reopened at 5 until 10 each night
 Average dinner ticket was $30
 30 customers queuing on weekends before the doors opened
 Peak arrival times 9-11am and arrivals trailed off after 1:30pm
 Once at the front door still 45 minutes away from breakfast
 Average cycle time for the team of 4 chefs was approximately 40 seconds per customer
 Fulfilling drink orders took a single employee 45 seconds per customer and processing
payment took 1 minute per party
 Average party had 2.6 customers
 Average table turned over every 19 minutes
 44 seats total
 Options:
o Double down on carryout orders
o Continue allowing carryout orders but without actively promoting the option
o Throttle back on carryout orders during peak times
o Eliminate carryout orders altogether
Pros and cons of carryout
 Pros:
o Don’t take up space in restaurant
o Trend, extra revenue
o Locals want it
o More convenient, less waiting
o No fainting in line
 Cons:
o Longer wait for sit down customers
o Losing appeal of long line of customers
o In restaurant experience is lower
o Food is less fresh, food quality decreases
o Tourists want dine-in experience

What do they compete on?


 Quality – good but not fancy
 Community sense
 Experience / atmosphere, ambience

Psychology of queueing
 Equitable treatment
 Purposeful wait / occupied with watching the busy chefs
 Transparency / sense of progress – can see and judge how long the wait will be
 Clustering of experience
 Can turn unpleasant experience of waiting in line into an advantage

True demand would not include the people leaving the queue
Capacity is not enough to meet demand on green highlighted times
But since it decreases after you can meet the backlog of demand through a queue

But even when utilization is less than 100% you still have a queue due to variability of: time to
serve a customer and uncertainty in the interarrival rate of customers (having 1 at the
beginning and then 9 at the end of the period which could create congestion and queues
instead of arriving in equally spaced times) so we still have a queue when we are under 100%
utilization
This does not take into account the fact that before the restaurant even opens there is a queue
of 35 people
Can use little’s law to find out how many minutes you will be waiting in line for

What is the implication of adding carryout orders?


Capacity = 90 customers
Utilization = demand/capacity = 80(Saturday 8-9am)/90
Assuming 2 people ordering takeout
2 schools of thought:
1. Demand is 80 PLUS 2 takeout which increases demand to 82 customers
2. Takeout is included in 80 demand since capacity is fixed and the chef is the bottleneck
and must cook for takeout and dine in customers so now dine in capacity is decreased to
88 instead of 90
When takeout =2 ->Increases queue length from 7 to 9 people and waiting time from 5.4
minutes to 6.8 minutes
Line length and wait time increases exponentially as capacity goes down due to takeout orders
(shown in graph)

More takeout leads to longer lines and slower service causing more balking and reneging and
customers getting angry seeing empty tables but still waiting so they blame the cooks for before
slow or not doing anything which worsens your instore experience
Therefore increasing takeout is not a good idea

What are the options for paramount?


-offer takeout orders but with certain restrictions (specific time, certain amount of orders)
-separate the systems – 1 for dine in and 1 for takeout (convert the downstairs kitchen into a
takeout kitchen only and keep upstairs for dine in only but requires more staff and high set up
costs)
- would also want to separate front line operations, separating queues and staff for
payment
-not physical queue (having people leave and wait somewhere else and come back when their
table is ready) – adds a lot of uncertainty if people actually come back or not, people don’t
want to leave, strips away transparency since you cant see the physical line

What we covered:
 Impact of utilization
 Queues form because of uncertainty of availability within the interarrival times of the
customers
 Utilization increases, queue length and wait time increase exponentially

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