Solved: Johnny s Dynamo Dogs has a drive through line

Customers arrivin

Johnny’s Dynamo Dogs has a drive-through line. Customers arriving at this line during the busy
hours (11:00 A.M. to 1:00 P.M.) either orders items a la carte or on a value-meal basis.
Currently 25% of meals are sold as value meals at art average contribution margin of $2.25.
The A Ia carte meals earn $3.00 per meal but take longer to prepare and this slows the line.
The following are the interarrival times that were recorded over the last 3 weeks of operation.
Interarrival Times for 500 Observations
Time between Arrivals (minute) Number of Occurrences
1 .............. 100
2 .............. 150
3 .............. 125
4 .............. 100
5 .............. 25
In addition, the following service times for a Ia carte and value meals were recorded:

John Cottrell (“Johnny”) has observed that because of street traffic the store loses all the
potential customers who arrive when 4 cars are in the drive-through tine (i.e., the line never
exceeds four customers).
(a) Simulate a 1-hour time period for the current mix of a Ia carte and value-meal orders. To
start, assume two cars are in the line, each with 2-minute service times, Determine the number
of meals served, the income from those meals, and the number of missed sales because
customers go elsewhere.
(b) Johnny is contemplating a reduction of $0.25 in the prices of value meals. He believes that
this will increase the percentage of meals that are value meals form 25% to 40%. This will result
in faster service time and fewer lost sales. Using simulation, determine if this change will be
financially beneficial. Assume that the benefits will be available for 2 hours a day over a
20-daymonth.

ANSWER
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