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Operation- Capacity Plan - Term Paper Example

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The manager will work for five days a week from 8 am. The front desk attendants will work in shifts with the manager filling in a couple of shifts. The…
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Operation- Capacity Plan
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Capa plan The business will employ manager, 4 front desk attendants, I maintenance staff and 6 housekeepers to cater for the visitors. The manager will work for five days a week from 8 am. The front desk attendants will work in shifts with the manager filling in a couple of shifts. The maintenance staff will work for 5 busiest days of the week based on the occupancy. There will be at least one housekeeper scheduled at all times of the day, 8 hours for each shift. The company will offer high speed internet connectivity, free coffee, 32” televisions and sanitary items.
Below is the demand forecast for the annual users, average monthly visitors and average daily users (Kerzner, 2009). The manager will also provide front desk and house keeping services during the day in case of peak demand.
year
Annual number of customers
Average monthly customers
Average daily number of customers (365 days/year)
1
7,300
608
20
2
12,000
1,000
33
3
13,500
1,125
37
4
14,000
1,167
38
5
14,000
1,167
38
168 hours per week. An average of 266 customers to be served per week. The above figures will an average of 2 customers per hour. The revenue per customer per hour is $ 11.51. Total revenue per hour will be $ 23.02.
Hours of operation
Day
Hours of operations
Working shifts
Number of employees at work
Monday- Friday
7 am- 7 am. (24 hours a day)
7 am- 3 pm, 3 pm- 11pm, 11pm-7am
3 front desk attendants, 3 housekeepers, 1 manager, 1 maintenance staff
Saturday
7 am- 7 am. (24 hours a day)
7 am- 3 pm, 3 pm- 11pm, 11pm-7am
3 front desk attendants, 3 housekeepers
Sunday
7 am- 7 am. (24 hours a day)
7 am- 3 pm, 3 pm- 11pm, 11pm-7am
3 front desk attendants, 3 housekeepers
Expenses
We assume that all customers will utilize the added services provided in the Pods. The customers will use the toilets, take coffee and use the high internet.
Variable expenses
Amount per unit used by each customer
Item cost (one unit per customer)
Year one (7300 customer) variable expense
Year variable expense (12,000 customers)
Year three variable expenses (13,500 customers)
Year four variable expense (14,000 customers)
Year five variable expense (14,000 customers)
coffee
$ 0.30
$ 2,190
$ 3,600
$ 4,050
$ 4,200
$ 4,200
Complimentary toiletries-toothbrush, deodorant lotion, razor, tooth paste and shaving cream
$ 2
$ 14,600
$ 24,000
$ 27,000
$ 28,000
$ 28,000
Fixed expenses
Year one
Year 2
Year 4
Year 4
Year 5
Water
$ 250
$ 250
$ 250
$ 250
$ 250
$ 250
Rent
$ 1200
$ 1200
$ 1200
$ 1200
$ 1200
$ 1200
Business permit
$ 50
$ 150
$ 150
$ 150
$ 150
$ 150
salaries
$ 350,000
$ 350,000
$ 350,000
$ 350,000
$ 350,000
$ 350,000
insurance
$ 2000
$ 2000
$ 2000
$ 2000
$ 2000
$ 2000
High speed internet per annum charges
$ 400
$ 400
$ 400
$ 400
$ 400
$ 400
Capital investment
Capital investment
8 Pods
$ 40000
8 televisions
$ 16,000
Start-up costs
Cupboards, lockable doors and shelves
$ $ 2400
Internet cabling system
$ 2000
Toilets installation
$ 1600
2 Cash registers
$ 1,500
8 coffee tables, brewing equipments and serving mugs
$ 1000
Couches, bed cushions and curtains in all pods
$ 600
Office, Waiting and dining lounge
$ 500
Total
65,600
The capital investments and start-up costs will occur at the beginning of the business (time-zero) and will remain the same for the next five years.
Appendix one-sales forecast
In sales forecasting, we utilized the product concept test. The first step was to collect information through questionnaires to travelers in the airports. We also surveyed business air travelers in order to gain knowledge on the expected sales volumes of the business. A total of 150 responses were collected.
The second step involved estimating the preference rates for the pods.
A
B
C
response
% giving the response
% of respondents likely to use the service
(A *B)
Will automatically use the pods
0.185
0.70
0.1295
May probably use the pods
0.455
0.30
0.1365
Might/might not use the pods
0.345
0.00
0.000
Will never use the service
0.015
0.00
0.000
Estimated preference rate
0.2660
Step three: the third step involved determining the market potential for the service. The pods are consumer goods and preference rate should be multiplied by 25 %.
The new rate = 0.2660* 0.25 = 0.0665
The market potential will be calculated by multiplying the new rate with the target market size
= 0.0665 * 210,526
= 14,000 customers per annum
NB: in determining the target market size, we used statistics of air travelers in the city.
Step four: the fourth step involved determining the sales potential, which is the number of people likely to utilize the pods at the airport. Since no competitors in the market, we assumed that the market potential will remain 14,000 customers per annum.
Below is a calculation of the expected amount of dollar spent by each customer per year. We assume that each customer will spend an average of three hours in the pod and will use the service five times in a year.
Year
Annual number of customers
Average number of hours spent per customer
Expected revenue per customer per annum ($ 11.51 * 3 hours* 5 times in a year)
Annual sales forecast in dollars
Year one
7,300
3
$ 172.65
$ 1,260,345
Year two
12,000
3
$ 172.65
$ 2,071, 800
Year three
13,500
3
$ 172.65
$ 2, 330,775
Year four
14,000
3
$ 172.65
$ 2,417,100
Year five
14,000
3
$ 172.65
$ 2,417,100
References:
Kerzner, H. project management: a systems approach to planning, scheduling, and controlling. New Jersey. John Wiley. 2009. Read More
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