Learning curve theory and its applications

Mario's Pizzeria: Layout Simulation

At the beginning of the scenario, the new manager of Mario's Pizzeria has two main objectives: to increase the establishment's profitability and to increase the restaurant's efficiency when serving customers. The average customer wait time was 11.67 minutes and the average line length was 3.21. Customers were walking out before purchasing anything as a result: a relatively greater percentage of potentially more profitable tables of 4 (37 in total) left before placing orders, while a smaller percentage of potential tables for 2 left (2 customers). To deal with these problems, the manager initially increased the numbers of wait staff and kitchen staff, and also split some of the tables for 4 into tables for 2, thereby increasing the available space and potential for table turnover. These measures reduced line length, wait time, and the numbers of customers who 'balked' but proved to be imperfect solutions, given that more waiters and kitchen staff resulted in more underused persons during slow times, thus increasing operational costs and decreasing profits.

Improvements in technology in the form of Menu Point, an automatic order taking system, and the use of an efficient oven created by Plax Ovens had a far more meaningful effect upon sales and reducing wait time. Overall, profits after the implementation of these new forms of technology were substantially greater than the weeks before: $1,644 with only a loss in 'balked' sales of $345. This would seem to indicate a successful alteration in standard company procedures through technology. Technology is often the most effective way to institute meaningful changes in production: overhead costs are reduced while the organization can provide customers with superior service. So long as the initial capital outlay is not too great, and maintenance costs are not prohibitive, technology can be an effective solution to organizational inefficiencies.

However, in the final scenario, although Mario is said to be pleased, the manager's decision to rent Cream Puffs, the next-door bakery seems more questionable. Increasing table capacity has further reduced customer wait time and increased profits, but the numbers of lost sales have also increased. In the final scenario, the average waiting time is now 3.45 minutes and the average line length is 2.68. Mario earned a profit of $2,061, but lost sales worth up to $720. After the implementation of the new technology but before the acquisition of the additional space, the average waiting time in the restaurant was 5.11 minutes and the average line length was 2.3. In other words, line length increased after the expansion into the Cream Puffs space. Because of the expanded seating capacity, wait time decreased, but the decrease in wait time was relatively minimal.