A Fast-Food Stand Has a Thriving Business in Downtown Portland

question 37

Essay

A fast-food stand has a thriving business in downtown Portland. They serve 3,500 burgers; 3,000 orders of fries; and 4,000 soft drinks per week. The workers work 40 hours per week but are idle two percent of the time. The manager wants to try to become more efficient. He has done a time study and found:
$$\begin{array} { l l } \text { Elements for One ltem } & \text { Minutes } \\\text { Take order } & 2 \\\text { Time taken for kitchen to fill } & 5 \\\text { order } & \\\text { Pick up order \& put in bag } & 1 \\\text { Take customer's money } & 2\end{array}$$ It takes 1 additional minute per additional item. The average order size is 3 items.
a. What is the average number of orders per week?
b. What is the average cycle time (in minutes) per order?
c. What is the labor standard (in minutes) per order?
d. How many workers does the manager need per week?

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Definitions:

Call

An option contract giving the owner the right, but not the obligation, to buy a specified amount of an underlying asset at a set price within a specified time.

Positive Intrinsic Value

The condition where an option or other financial instrument has a market price below its calculated value, suggesting undervaluation.

In-the-Money

An option is considered in-the-money when it has intrinsic value, meaning that for a call option the market price of the asset is above the strike price, and for a put option, it's below the strike price.

Strike Price

The fixed price at which an option's holder has the right to purchase (if a call option) or sell (if a put option) the underlying asset or commodity.