Hilltop Restaurant is located in Dempsey Hill. The restaurant has a capacity of 35 tables to serve customers. When doing its capacity planning and evaluating operational performance, the restaurant adopts the concept of “customer group” and uses it as unit of measurement to measure the workload in the service process. A customer group is a group of one or more people who arrive, get seated at a table, eat and depart. On average, a customer group takes 70 minutes to eat dinner, and then another 25 minutes to eat dessert. On average, a customer group generates a profit of $100 on dinner, and $30 on dessert.

(a) Assume that all customer groups eat both dinner and dessert. Estimate the maximum number of customer groups per hour the restaurant can serve (capacity rate) by applying Little’s Law. At what rate (dollars per hour) is profit generated by the restaurant if it operates at capacity rate?

Now assume that Hilltop leases new space to open a “dessert bar” next door, and has opened up the wall between the two units to allow inside access from the restaurant to the dessert bar. The dessert bar can accommodate 15 tables. With this change, a customer group arrives and is seated at a table in Hilltop restaurant as usual. However, when the customer group finishes eating dinner, the waiter would ask them if they would like to move to the dessert bar for dessert. Assume that all customer groups eat both dinner and dessert and agree to move to dessert bar after dinner.

(b) Apply Little’s Law to the following questions: what is the capacity rate (customer groups per hour) of the total system (restaurant and dessert bar)? At what rate (dollars per hour) is profit generated by the system if it is operating at capacity rate?

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a To estimate the maximum number of customer groups per hour the restaurant can serve capacity rate using Littles Law we need to calculate the average ... View the full answer