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Albert Cai

OIDD 224
Benihana Case Write-up
Recommendation:
The best strategy I found, in terms of average profit, has the following attributes:

Tables of 8 batching for every hour open


Maximum number of 87 bar seats with 10 tables
Dining times of 47 minutes
This strategy returns a result of $314.08 average nightly profit. This also performed extremely
well with an average utilization of 66.4% and only 12 customers lost per night. Of course, they
will be correlated because more customers served means more profit, but they can vary people
people may order different things depending on the restaurant layout. I focused on profit as
the main metric to evaluate each strategy.
Why does this work?
Ill explain each part independently first, and then how they all play together in conjunction.
Batching:
Having 8 people to a table for the first two hours and no batching the last hour was optimal.
Overall, it makes sense that batching is the best strategy because it allows more of the
restaurant to be utilized at each time. The possible downside of batching is that it takes longer
for people to be seated.
Bar/Table:
79 bar seats to 11 tables was optimal. This is because we still make money from the bar, and
most customers waiting in the bar will eventually go eat dinner. In essence, we have more of
the restaurant making money at a time. The tradeoff to expanding the bar is that there are
fewer seats available for dinner, which has a higher profit margin. However, we rarely get
enough customers to need the full restaurant capacity, it is most efficient to lower the number
of restaurant tables and use more of them throughout the night.
Dining times:
It was optimal to lower the amount of time people spend at a table to 46 minutes. This makes
sense because when people spend less time eating, customers will leave the restaurant
quicker, which means that we will be able to serve more people in total. The trade-off is that
we lose revenue from the bar. However, we have a better margin from dining than we have
from the bar, so our profits are ultimately better.
Overall:
The overall results make sense directionally for the best possible strategy, in that we have
batching, more bar seats available, and shorter dining times. Some tweaking with different
scenarios led to the strategy above. There were a few differences between the overall strategy
and the independent strategies.
1) Batching: batchingindependently, batching was best only in the first two hours
because fewer customers show up later at night. However, when we lower the number
of restaurant tables, we want to batch the entire night.
2) Bar/table: Independently, 79 bar seats was optimal, but after considering the shorter
dining times, we didnt need as many tables.
3) Dining times: 47 minutes was slightly better than 46 minutes, but only marginally. This
is because we allow for better demand smoothing throughout the night.