The best strategy for Benihana is the one that maximizes the utilization of time and space to ensure the attainment of maximum profits. Benihana can only achieve the best strategy by understanding the previous challenges and factors that have an effect on them. From the simulation exercise, it is clear that a batching strategy was much better than a non-batching one as far as profit maximization is concerned. It is clear that batching enabled the proper utilization of dining space to 55% whereas the non-batching enabled the utilization of 42%. It is also imperative to understand that this strategy had a significant impact on fixed costs as it reduced the number of chefs substantially.

General Insights

Effect of Batching

Although batching is, by far, the best strategy for Benihana as far as profit maximization is concerned, it is worth noting that there are several underlying issues. For instance, batching can only be effective in the short-term, and its long-term effects can be detrimental. The strategy fails to take into account other issues such as idle time and throughput times, which are critical in the attainment of profits. For batching to be effective, organizations should incorporate other strategies such as advertising to ensure the acquisition of maximum profits.

Demand Variability

This concept is concerned with the difference between the expected and actual demand. In most cases, the disparities are far-reaching, and this makes it necessary for managements to design ways of coping with them. Some of the best approaches to dealing with demand variability include driving supply from the real demand, using probability to determine different demand outcomes, and synchronizing demand management processes with supply management processes.

Service Variability

The mismatch between the demand and supply brings about demand and service/production variability.  This mismatch has great undoing to an organization’s overall success. The best way to deal with service variability is to study and understand the consumer behaviour. Understanding the consumers’ tastes and preferences helps organizations build on the gaps and maximize profits.

Capacity Utilization and Profitability

Capacity utilization has a great impact on the level of profitability that an organization realizes. Benihana west discovered that it failed to utilize its space since it only had a sitting capacity and had no lounge area. After opening the Benihana East, Rocky doubled the size of the bar and lounge thus maximizing the capacity.  It is evident from the simulation that Benihana registered increased sales of 18%.

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