Farm Management - Free Essay Example

Sample details Pages: 7 Words: 2057 Downloads: 5 Date added: 2017/06/26 Category Management Essay Type Critical essay Level High school Did you like this example? Farm Management Assess the current capacity of ‘Holly Farm and critically evaluate the optional ways of achieving the intended growth in the number of visitors, bearing in mind that capital investment is not available, although self-financing revenue earning ventures can be considered. 1. Introduction This piece examines the case of Holly Farm, and the plan proposed by Gillian Giles to attempt to boost the number of visitors attending the farm. Holly Farm is currently quite a successful example of a farm that has diversified into visitor activities to boost its overall revenue levels. Don’t waste time! Our writers will create an original "Farm Management" essay for you Create order However, the farm has now reached a point at which visitor levels are relatively steady, and hence the farm is failing to grow its revenue significantly. This piece will thus investigate the current situation at the farm, including the current visitor numbers and the projected capacity for the farm. This data will then be used to determine the extent to which the farm can try to attract more visitors and the strategies that could be used to achieve this. This analysis will take place assuming that the farm is unable to raise further capital investment, other than through additional services that will also generate revenue. 2. Analysis and current situation Car park capacity Coach spaces 6 Car spaces 40 Average visitors per coach 35 Average visitors per car 3 Daily coach visitor capacity 210 Daily car visitor capacity 120 Total daily capacity 330 Current visitor numbers April May June July August September October Total Visitors 1,200 1800 2800 3200 3400 1800 600 14,800 Days open 16 16 16 16 16 16 16 112 Weekend days open 8 8 8 8 8 8 8 56 Week days open 8 8 8 8 8 8 8 56 Average weekend day visitors 100 150 233 267 283 150 50 176 Average weekday day visitors 50 75 117 133 142 75 25 88 Daily car park capacity 330 330 330 330 330 330 330 330 Weekend utilisation 30.3% 45.5% 70.7% 80.8% 85.9% 45.5% 15.2% 53.4% Weekday utilisation 15.2% 22.7% 35.4% 40.4% 42.9% 22.7% 7.6% 26.7% Daily milking parlour capacity 200 200 200 200 200 200 200 200 Weekend milking parlour visitors 80 120 187 213 227 120 40 141 Weekday milking parlour visitors 40 60 93 107 113 60 20 70 Weekend utilisation 40.0% 60.0% 93.3% 106.7% 113.3% 60.0% 20.0% 70.5% Weekday utilisation 20.0% 30.0% 46.7% 53.3% 56.7% 30.0% 10.0% 35.2% The analysis of the current situation is based on the following assumptions: On average, each coach visiting the farm will contain 35 visitors, and each car will contain 3 visitors. This is to account for the number of single parent families and families with only one child that may visit the farm. The proportion of visitors by coach and by car are roughly proportional to the respective visitor capacity for coach and car visitors The car and coach spaces cannot be used flexibly, i.e. coaches cannot park in the car spaces and vice versa The milking sheds can support 80 people per hour for a period of two and a half hours, thus they have a daily capacity of 200 The visitors are spread roughly evenly throughout each month 90% of visitors arrive after 12:30pm, and the visitors that arrived before 12:30pm at still there at this time. As such, around 1pm all visitors to the farm are at the farm and hence all need a car park space The analysis indicates that the farm is currently very close to its maximum visitor capacity in July and August, with 80.8% and 85.9% capacity utilisation in the car park on these days. With 80% of visitors going to the milking parlour, the parlour itself is already over capacity on these days, with capacity utilisation levels of 106.7% and 113.3% respectively. It must be assumed therefore that some visitors that would have liked to have visited the milking sheds were unable to do so due to the capacity constraints. 3. Different scenarios Two primary scenarios have been considered. The first is where the farm engages in widespread promotional activity designed to boost overall levels of attendance by 50%. The second is where the farm engages in targeted promotional activity designed to encourage school visits during the week, thus boosting weekday attendance levels by 50%. The analysis for these two scenarios is shown below: 3.1 Boost visitor demand by 50% on all days Projected visitor numbers April May June July August September October Total Visitors 1,800 2,700 4,200 4,800 5,100 2,700 900 22,200 Days open 16 16 16 16 16 16 16 112 Weekend days open 8 8 8 8 8 8 8 56 Week days open 8 8 8 8 8 8 8 56 Average weekend day visitors 150 225 350 400 425 225 75 264 Average weekday day visitors 75 113 175 200 213 113 38 132 Daily car park capacity 330 330 330 330 330 330 330 330 Weekend utilisation 45.5% 68.2% 106.1% 121.2% 128.8% 68.2% 22.7% 80.1% Weekday utilisation 22.7% 34.1% 53.0% 60.6% 64.4% 34.1% 11.4% 40.0% Actual average weekend day visitors 150 225 330 330 330 225 75 238 Actual average weekday day visitors 75 113 175 200 213 113 38 132 Total weekend day visitors 1200 1800 2640 2640 2640 1800 600 13320 Total weekday day visitors 600 900 1400 1600 1700 900 300 7400 Total visitors 1800 2700 4040 4240 4340 2700 900 20720 Daily milking parlour capacity 200 200 200 200 200 200 200 200 Weekend milking parlour visitors 120 180 264 264 264 180 60 190 Weekday milking parlour visitors 60 90 140 160 170 90 30 106 Weekend utilisation 60.0% 90.0% 132.0% 132.0% 132.0% 90.0% 30.0% 95.1% Weekday utilisation 30.0% 45.0% 70.0% 80.0% 85.0% 45.0% 15.0% 52.9% It should be noted that, for this scenario, as the capacity of the car park is limited to around 330 people per day, some visitors who wish to visit the farm on weekends in July and August will be unable to do so. The farm will thus have maximum average daily weekend visitor numbers during these months of 330. A plan should thus be put in place to manage capacity on these days, and ensure that visitors do not travel a long way only to find there is no space in the car park. 3.2 Boost visitor demand by 50% for weekdays only Projected visitor numbers April May June July August September October Total Average weekend day visitors 100 150 233 267 283 150 50 264 Average weekend day visitors 75 112.5 175 200 212.5 112.5 37.5 132 Weekend days open 8 8 8 8 8 8 8 56 Week days open 8 8 8 8 8 8 8 56 Total weekend day visitors 800 1200 1867 2133 2267 1200 400 9867 Total weekday day visitors 600 900 1400 1600 1700 900 300 7400 Total visitors 1400 2100 3267 3733 3967 2100 700 17267 Daily milking parlour capacity 200 200 200 200 200 200 200 200 Weekend milking parlour visitors 80 120 187 213 227 120 40 211 Weekday milking parlour visitors 60 90 140 160 170 90 30 106 Weekend utilisation 40.0% 60.0% 93.3% 106.7% 113.3% 60.0% 20.0% 105.7% Weekday utilisation 30.0% 45.0% 70.0% 80.0% 85.0% 45.0% 15.0% 52.9% In this scenario, the capacity of the car park does not represent a critical factor, as the farm will never attract more than 330 visitors per day on average. This will thus help relieve the problems associated with an across the board increase in visitor numbers. 4. Suggestions and validation The results from the first scenario show two main issues with Gillians desire to boost visitor numbers. The first is that boosting levels of demand will cause capacity issues in the car park in the busy months of June, July and August. This will create issues for the farm as it may result in visitors arriving and having to be turned away, which could create a negative image for the farm. In addition to this, boosting the number of visitors during these peak periods will result in the milking sheds becoming very congested with long queues, and potentially large numbers of people unable to visit the sheds. As the carousel appears to be a very important attraction, if people are unable to visit it they may again become unhappy and this could damage the reputation of the farm as well as causing problems for the employees running the attraction (Waters, 1999, p. 85). In terms of the actual impact on visitor numbers, the 50% increase in demand across the board would be expected to boo st visitor numbers by around 40%, from 14,800 to 20,720 per annum. In contrast, the 50% increase during weekdays would boost visitor numbers by around 17%, from 14,800 to 17,267 per annum. As such, the 50% increase across the board would be more beneficial in terms of total numbers, but would also likely cost more to implement, and would not provide a full 50% increase in visitor numbers. In order to achieve this 50% increase, the best option would be to implement both the general marketing scheme to increase overall numbers, and the targeted partnership scheme with schools to boost visitor numbers during the weekdays. This would help achieve the 50% target within the existing capacity constraints. At the same time, the farm will need to carry out targeted analysis of the current levels of car park usage, in order to determine whether it should target more coach groups or more family groups depending on the capacity utilisation of the coach and the car spaces. However, the best way to achieve the goal of a 50% expansion in visitor numbers whilst avoiding the potential issues with capacity and overcrowding the in the milk sheds as discussed above would be to address the constraints the company faces. According to Huefner (2011, p. 40), â€Å"companies of all sizes are limited by any number of constraints: capacity of their plants and other physical structures, distribution channels, rules and regulations, size and education of the workforce, and access to raw materials, to name a few†. As such, addressing and overcoming these constraints is a vital aspect of operations management, and enables companies to improve their profitability without having to invest additional capital. One of the main ways this could be achieved for the farm would be to improve capacity management through car park flexibility. Specifically, the farm should look to arrange the spaces in the car park so that coaches can park across two or three car parking spaces in order to bo ost capacity. This is because two or three cars will bring an average of around nine visitors, but a coach can contain 35 visitors. As such, by allowing some car spaces to be used for coaches, the farm could focus on attracting more coach groups at the weekends, and thus boost the effective capacity of the car park. This will play a vital role in boosting overall capacity, as parking is a critical factor in determining travel destinations (Nurul Habib et al, 2012, p. 154). This would also help the farm profit more by offering discounted entry fees to coach tours, as well as potentially running coaches from larger nearby car parks where other visitors could park and then ride to the farm. Another important tool that could be used to boost revenues and visitor numbers is to engage in superior demand management, through pricing structures. According to Hwang et al (2010, p. 465) the use of pricing for demand management plays a key role in the effective management of demand levels, a nd thus maximises potential revenue levels. In this case, the farm could offer half day visitor structures, whereby people who arrive later, after 4pm, when around 20% of visitors have left, will be offered discounted prices. There could also be discounted prices offered to people who arrive at 11am and stay only for a couple of hours, thus leaving before the large groups arrive. This would help ensure that more visitors can attend during quieter periods. Similarly, setting higher prices at the weekend and lower prices during the week could help ensure that more people came on Friday and Monday, when the farm is quiet, instead of at the weekends when it is busy. These efforts could be combined with revenue management techniques which use differential pricing strategies and capacity allocation tactics to maximise overall revenue levels for the farm, as well as visitor numbers (Deng et al, 2008, p. 737). In addition to this, the farm could boost capacity by opening new attraction n earby such as a go kart course. This would create funds to expand the car park and encourage people to visit both attractions at once. Different tickets could be sold for people who want to go on the go kart in the morning and visit the farm in the afternoon and vice versa, in order to smooth out demand levels across the two attractions. These efforts would improve capacity utilisation in the car park and boost the overall visitor numbers, but efforts will still be needed to address the issue of queuing for the milking shed, and ensuring capacity is smoothed in this area. One of the main ways to achieve this would be for each visitor to the milking shed to come to the shed when they first arrive and book a time slot for their viewing. This would help customers avoid having to queue and reduce customer discontent due to the length of the queue (Xu et al, 2007, p. 971). It would also ensure that customers were not left waiting until the end of the day and then frustrated that the m ilking shed was not open for them to see the milking. This approach would thus help reduce the queues in the milking shed and hence support the increase in visitor numbers for the farm as a whole. References and Bibliography Deng, H. Wang, Q. Leong, G. and Sun, S. (2008) The Usage of Opportunity Cost to Maximize Performance in Revenue Management. Decision Sciences; Nov2008, Vol. 39 Issue 4, p737-758 Huefner, R. (2011) A Guide to Integrating Revenue Management and Capacity Analysis. Management Accounting Quarterly; Autumn2011, Vol. 13 Issue 1, p40-46 Hwang, J. Gao, L. and Jang, W. (2010) Joint demand and capacity management in a restaurant system. European Journal of Operational Research; Nov2010, Vol. 207 Issue 1, p465-472 Nurul Habib, K. Morency, C. and Trà ©panier, M. (2012) Integrating parking behaviour in activity-based travel demand modelling: Investigation of the relationship between parking type choice and activity scheduling process. Transportation Research Part A: Policy Practice; Jan2012, Vol. 46 Issue 1, p154-166 Shim, J. and Siegel, J. (1999) Operations Management. Barrons Educational Series. Waters, D. (1999) Operations Management. Kogan Page Publishers. Xu, S. Long, G. and Jihong, O. (2007) Service Performance Analysis and Improvement for a Ticket Queue with Balking Customers. Management Science; Jun2007, Vol. 53 Issue 6, p971-990