Case study one - retail outlet: Fry's electronics, incorporated
Fry's Electronics Incorporated is a national consumer electronics dealer that is based in San Jose, CA. The Company ranks 14th nationally in retail electronics sales. Reported sales in 2009 were $1.7 billion. Fry's Electronics Incorporated is a privately-held company (Fry's Electronics, Inc., 2011). The Company operates 34 retail stores (The TOP 100 Consumer Electronics Retailers, 2010). The retail stores operated by the Company are located in the states of Arizona, California, Georgia, Illinois, Nevada, Oregon, Texas, and Washington (Fry's Electronics, Inc., 2011). This case study concerns one of those 34 retail outlets.
The Fry's Electronics store that is the focus of this case records annual sales approximating $55 million. The average transaction approximates $255, which translates into approximately 215,686 transactions annually. While some times of the year tend to be characterized by higher sales volumes than other times of the year, the peak transaction hours of operation tend to be from 10AM through 3PM daily throughout the year. Transaction volumes also tend to be relatively uniform throughout the year during this time period because of special promotions that re implemented during higher volume months to motive consumers to shop in non transaction peak hours. The approximate transaction count on an annual basis during the 10AM-#PM period is 129,412. The average daily transaction count during this time period is 359. The arrival rate at the check-out area is relatively uniform across the five-hour period, which rounds-up to an average of 72 arrivals per hour.
The problem confronting Fry's Electronics managers at this particular retail outlet is to determine how many checkout stations to operate during the 10AM-3PM period to assure that customer waiting time in the queue does not exceed 15 minutes. Past experience has shown that a...