November 05, 2007

Operations Management Lesson 6 Exercise

Operations Management Lesson 6 Exercise

The 6th lesson is about the management of capacity and wants to point out the importance of resources used, in terms of quantity and quality.

For this blog I’ve chosen the “Warne Village Cinema” based in Rome.

It is composed of 16 cinema halls (with different seat capacity for each of them) and is situated out of the centre of the city, occupying a very large space.

Around Warner Village area we can find different kind of shops, like:

-        Amusement arcades

-        Library

-        Restaurants and Pizzerias

-        Sport shops

-        Big gymnasium

-        Large Supermarket.

Level/chase capacity Management

Starting from the Warner Village conception, cinema is able to meet demand by:

-        programming films in cinema halls with a certain number of seats at particular times;

-        choosing the number of times to program each film;

The big space at the entrance and exit of “Village” does not create any bottleneck for people passage.

Then different film typologies attract different people who are also interested in other activities to be done in the Warner surroundings (children are interested in amusement arcades, singles or people groups have the chance to meet ourselves, families go shopping).

The choice of opening a big supermarket and a big gymnasium in front of the cinema turned out to be a right decision for reasons here below.

Yield Management / Queue design

Supermarket and gymnasium facilities represent for the customers a way to optimize their own time because they could buy the cinema ticket before doing shopping or physical activities. That means saving a lot of time, avoiding queues for ticket buying or cinema entrance.

The same thinking could be done at the opposite: customers could prefer going to the cinema before going to gym or doing shopping, depending on the time.

Customer could avoid the crowding of the gym (for example) or they could prefer to do shopping in certain hour of the day because the supermarket offers special prices for goods in limited hours of the day.

Moreover, fidelity cards released by Warner Village attract people in “living the club”; so this concept of “global village” brings value to everybody in terms of minimizing the wasting time (for customers and for business locations) and maximizing revenue for the village.

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