Develop a model to maximize the monthly profit 3.

-Determine which branches should be closed and which should remain open 4.

-Determine how many part-time employees to hire without firing any of the current permeant employees (part-time employees should work for 6 consecutive hours)

-Discuss the possibility that the owner might dismiss some of the permanent staff at the open branches and use part-timers instead to lower the monthly expenses (up to two permeant employees could be dismissed from an open branch)

-What other suggestions you might add to improve the total monthly profit? 7. Clearly state any assumptions you make for this model.

 

An owner of a very successful restaurant that has 5 branches in a small city. While the revenue per month in each branch is relatively high, monthly expenses limit the profit that the restaurant can achieve. The demand on the restaurant is stable on average and given that it is a small city, some of those branches are just few blocks from each other. Restaurant Monthly Revenue ($) 127,000 80,000 162,000 91,000 109,000 Red Yellow Black Green Blue Based on market analysis, the owner found that the optimal number of branches that he should keep is 3 (i.e. 2 branches must be closed). One recommendation is that if two branches are within 4 km from each other, one of them must be closed (ovals indicate a distance of 4 km or less). This leaves the owner in a tough situation because for every branch that he will close, he needs to dismiss all the employees in that branch (cost of dismissing an employee is $300) Restaurant Closing two branches will allow the owner to expand the capacities of the other 3 branches, increasing both the fixed monthly costs and the monthly revenue at each branch that remains open as follows Red Yellow Black Green Blue Monthly Fixed Cost ($) 90,000 64,050 Percentage increase in Monthly Revenue 30% 38% 36% 140,112 70,000 102,500 42% 39% Percentage increase in monthly Fixed Cost 9% 11% 5% 13% 7%