I.

INTRODUCTION

A. Background of the Case

Gordo’s Fast Foods approved to open a new franchise in Muntinlupa city, Metro
Manila. This new store will include a drive-up window service that will include an
intercom station. The customers can use the drive-up window to order at a service
window to which customers will drive up and pay and receive their orders.

B. Statement of the Problem

Being the first of Gordo’s Fast Foods with a drive-thru window, the
management has not design the drive-thru window. The design has to
consider maximum efficiency and profitability.

C. Variables and Constraints

The franchisee has identified three possible design options for the drive-thru window. The
activities performed by each service window in accomplishing the customer’s order are:
1. Take customer’s order
2. Take customer’s payment
3. Give the customer’s receipt and change
4. Fulfill the order
5. Provide the order to the customer
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Based on the activities, the three designs are based on number of service windows and
number of servers to handle the activities of a service window. The table below describes
each design option.

Arrival
Scenario Service Time
Time
1 Customer is served in 1
minute and 15 seconds
Option
1 service window with 1 employee Or
1
48 Customers is served in 1 1
Hour Customer

1 Customer is served in 1 arrives

minute every two

Option 1 service window with 2 employees (1 to handle
Or minutes
2 payments and 1 to handle orders)
60 Customers is served in 1 Or

Hour 30
Customer
2 service windows with 1 employee each. This
1 Customer is served in 1 arrive
will operate in the same manner as option 1.
minute and 15 seconds every 1
Option
Or hour
3 Arriving customers will queue in a single line and
48 Customers is served in 1
move to the first window that will become
Hour
available when they reach the head of the line.

In addition, the management has identified costs that should be considered with
analyzing the optimal design option.

Manpower cost Php 350 per hour

Php 750 per hour for a single
Employee, facility cost and other overhead window design
expenses Php 1500 per hour for a two-window
design
Customer satisfaction and willingness to Php 1000 per hour are loss when
patronize the franchise customers
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D. Assumptions

It is assumed that the following factors will be considered for the analysis in order
to determine the best choice among the three options for Gordo Fast Food
Franchise. These factors are:

● Efficiency - the average number of customers who can be served during a

specific time
● Cost minimization - these would include the employees’ wages and cost of
maintaining the service

Also, it is assumed that the customers are expected to arrive at an average

(Poisson-distributed) rate of once every two minutes and the service will be on a
negative exponential distribution.

II. QUEUING ANALYSIS

A. Queuing System Characteristics

To analyze the effectiveness of each option in terms of effectiveness and cost,

queuing analysis will be used. However, since queueing analysis is a form of
probabilistic analysis, the results are probabilistic. Despite that, the results generated
can still be used for decision making.

The following are the characteristics of the queuing system for the analysis which
was derived of the franchise’s current dilemma:

Arrival Pattern Poisson arrival process

Service Time Distribution Negative Exponential Distribution

Number of Service 1 Service Window for Option 1 and Option 2

Windows 2 Service Window for Option 3
Population Size Infinite at Source
General Queue Discipline or First Come First
Queue Discipline Served (FCFS)
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M/M/1 for Option 1 and Option 2

Model M/M/s for Option 3

Poisson arrival process was used for the arrival pattern characteristic since generally
number of arrivals per unit of time at a service facility can be defined by a Poisson
distribution. On the other hand, Negative exponential distribution was used for
service time distribution since in the field of queuing, this distribution was been used
the most frequent (Taylor III, 2013).

The population size used was infinite at source due to the huge market of customers
in the vicinity of Muntinlupa city. For the queue discipline, FCFS was used since in
this line of business, customers are served based on their order in the queue.

The queuing model to be used is dependent on the number of service windows

despite the number of servers working at the respective window. M/M/1 will be used
for Option 1 and Option 2 while M/M/s will be used for Option 3 since it uses multiple
service windows.

B. Results

After applying the variables for each respective option and integrating M/M/1 model
for Option 1 and Option 2 and M/M/s for Option 3, the following results were
generated.

Inputs Option 1 Option 2 Option 3

Unit of time hour hour hour
Arrival rate 30 30 30 customers/hour
Service rate per server 48 60 48 customers/hour
Number of service windows 1 1 2

Outputs
Direct outputs from
inputs
Mean time between arrivals 0.033 0.033 0.033 hours
Mean time per service 0.021 0.017 0.021 hours
Traffic intensity 0.625 0.500 0.313
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Summary measures
P(system empty) 0.375 0.500 0.524
P(all servers busy) 62.5% 50.0% 14.9%
Expected number in system 1.667 1.000 0.693 customers
Expected number in queue 1.042 0.500 0.068 customers
Expected time in system 0.056 0.033 0.023 hours
Expected time in queue 0.035 0.017 0.002 hours
Percentage who don't wait
in queue 37.5% 50.0% 85.1%

The table above shows that Option 3 yielded the minimal percentage of customers
who will not wait in the queue and at the same time has the lowest percentage of
server utilization. This means that Option 3, serves the greatest number of
customers and at the same time, does not fully utilize the capacity of the service
window. The spare time can be used on other direct or indirect cash generating
activities.

III. COST AND EFFICIENCY ANALYSIS

Based on the analysis of the options in the queue above, the following analysis were
derived to check the cost implications of the options:

Rates Option 1 Option 2 Option 3

Server/Hour 350.00 350.00 700.00 700.00
Window Fixed Cost 750.00 750.00 750.00 1,500.00
Customer Waiting Value 1,000.00 625.00 312.50 46.50
Total Cost 2,100.00 3,825.00 5,587.50

From the table above, Option 1 yields the total overall costs factoring in server rates,
window fixed costs, and customer waiting value, while Option 3 yields the highest
cost. However, if we just want to factor in the possible costs in incurred due to in
efficient operations in the queue, Option 1 yields the highest customer waiting value
of Php 625.00 at any given hour. This is driven by the total customer waiting time.
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At a level of two service windows, this provides the most efficient method of servicing
the customers waiting in the queue, because there is only a very small window of
waiting for the customers. However, in terms of the cost, this option will entail the
most costs since there is a need to provide salaries and wages to two employees
and allocate overhead costs for the two windows. But the cost of waiting will be
lessened by a lot with the value at a level of Php 46.50 only at any given hour.

Since the employees are also being paid at an hourly basis, it would also be good to
look at the utilization of the servers at the different options. At the point where all
servers are busy, Option 3 has the least busy time for the servers. Given that option
3 also has the highest costs at Php 2,246.50 comparing the three options, this may
be too expensive for Gordo given the idle or non-busy time of the servers. Option 1
also provides the most utilization and busy for the servers, albeit with a higher
waiting time and costs for the customers as discussed above.

IV. CONCLUSIONS AND RECOMMENDATIONS

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REFERENCES

Taylor III, B. W. (2013). Introduction to Management Science. New Jersey: Pearson Education
Inc.