Operation- Capacity Plan - Term Paper Example

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. yearAnnual number of customersAverage monthly customersAverage daily number of customers (365 days/year)17,30060820212,0001,00033313,5001,12537414,0001,16738514,0001,16738168 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 operationDayHours of operationsWorking shiftsNumber of employees at workMonday- Friday7 am- 7 am. (24 hours a day)7 am- 3 pm, 3 pm- 11pm, 11pm-7am3 front desk attendants, 3 housekeepers, 1 manager, 1 maintenance staffSaturday7 am- 7 am. (24 hours a day)7 am- 3 pm, 3 pm- 11pm, 11pm-7am3 front desk attendants, 3 housekeepersSunday7 am- 7 am. (24 hours a day)7 am- 3 pm, 3 pm- 11pm, 11pm-7am3 front desk attendants, 3 housekeepersExpensesWe 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 expensesAmount per unit used by each customerItem cost (one unit per customer)Year one (7300 customer) variable expenseYear 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$ 4,200Complimentary toiletries-toothbrush, deodorant lotion, razor, tooth paste and shaving cream$ 2$ 14,600$ 24,000$ 27,000$ 28,000$ 28,000Fixed expensesYear oneYear 2Year 4Year 4Year 5Water$ 250$ 250$ 250$ 250$ 250$ 250Rent $ 1200$ 1200$ 1200$ 1200$ 1200$ 1200Business permit$ 50$ 150$ 150$ 150$ 150$ 150salaries$ 350,000$ 350,000$ 350,000$ 350,000$ 350,000$ 350,000insurance$ 2000$ 2000$ 2000$ 2000$ 2000$ 2000High speed internet per annum charges$ 400$ 400$ 400$ 400$ 400$ 400Capital investmentCapital investment8 Pods$ 400008 televisions$ 16,000Start-up costsCupboards, lockable doors and shelves$ $ 2400Internet cabling system $ 2000Toilets installation$ 16002 Cash registers$ 1,5008 coffee tables, brewing equipments and serving mugs$ 1000Couches, bed cushions and curtains in all pods$ 600Office, Waiting and dining lounge$ 500 Total 65,600The 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.AB Cresponse% giving the response% of respondents likely to use the service(A *B)Will automatically use the pods0.1850.700.

1295May probably use the pods0.4550.300.1365Might/might not use the pods0.3450.000.000Will never use the service0.0150.000.000Estimated preference rate0.2660Step 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 = 0.0665The market potential will be calculated by multiplying the new rate with the target market size= 0.0665 * 210,526= 14,000 customers per annumNB: 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.YearAnnual number of customersAverage number of hours spent per customerExpected revenue per customer per annum ($ 11.

51 * 3 hours* 5 times in a year)Annual sales forecast in dollarsYear one7,3003$ 172.65$ 1,260,345Year two12,0003$ 172.65$ 2,071, 800Year three13,5003$ 172.65$ 2, 330,775Year four 14,0003$ 172.65$ 2,417,100Year five14,0003$ 172.65$ 2,417,100References:Kerzner, H. project management: a systems approach to planning, scheduling, and controlling. New Jersey. John Wiley. 2009.