Case Study
Problem 3 – Cody and Lucky’s Bistro
ody and Lucky were nutrition majors at Millersville University, as well as close friends and roommates. Upon graduation Cody and Lucky decided to open a dog-‐friendly restaurant in Millersville. Due to health code violations, dog-‐
friendly restaurants were hard to start. There were no other dog-‐friendly restaurants in Millersville, and the possibility of doing something new and somewhat risky intrigued the two friends. They purchased an old Victorian home just off Frederick Street for their new restaurant, which they named Cody and Lucky’s Bistro. Cody and Lucky knew in advance that at least initially they could not offer a full, varied menu of dishes. They had no idea if anyone would even visit the business, so they decided to serve only two full-‐ course meals each night, one with beef and the other with fish. It was thought that dogs that wouldn’t mind having a taste of their owner’s beef or fish meal. Their chef, Don, was confident he could make each dish so exciting and unique that two meals would be sufficient, at least until they could assess which menu items were most popular. Don indicated that with each meal he could experiment with different appetizers, soups, salads, vegetable dishes, and desserts until they were able to identify a full selection of menu items that would make owner and dog happy. The next problem for Cody and Lucky was to determine how many meals to prepare for each night so they could shop for ingredients and set up the work schedule. They could not afford too much waste. They estimated that they would sell a maximum of 65 meals each night. Each fish dinner, including all accompaniments, requires 20 minutes to prepare, and each beef dinner takes twice as long. There is a total of 25 hours of kitchen staff labor available each day. The profit from each fish dinner will be approximately $15, and the profit from a beef dinner will be about $20. Cody has found some additional information. First, customers will not order what will make the Bistro the most money. After some research, Cody found that at least 3 fish would be ordered for every 2 beef. Lucky thought this was good because beef took much longer to cook than the fish. Don would have more time to cook every night if more fish was moved. Cody was always trying to push the beef though. He thought people naturally wanted fish over beef, but since beef provided a bigger profit, it needed to be pushed. Formulate a linear programming model for Cody and Lucky that will help them estimate the number of meals they should prepare each night and solve this model using Risk Solver. Answer the following questions:
1) Suppose Cody and Lucky changed the profit for fish so the profit for fish and beef are the same. What change would this have on the solution?
2) Suppose the beef started picking up. What would be the suggested product mix if instead of 3 fish to 2 beef, instead the ratio changed to 1 fish to 1 beef?
3) Cody is considering spending $30 a day to increase the total numbers of maximum meals they can sell to 70 a night. Should Cody invest in this advertising?
C
4) Don believes one of his part-‐time helpers will quit and the total time available would drop by 5 hours each day. How will this change in labor affect profitability?
5) Lucky went ahead and changed the price for the fish dinner to $16 a dinner. Cody wants to know if they will have to tell Don to order different ingredients because the product mix changes. Please advise Cody on how the change from $15 to $16 will change the product mix and profit levels. For this problem, write in sentence form, your answer to the 5 questions. Also embed your new worksheet into your Word document and upload the file to the Problem 3 dropbox.