Pantry Shopper - a Supermarket in Philadelphia

Pantry Shopper is a supermarket in Philadelphia, where competition among supermarkets is fierce. Pantry Shopper management feels that because prices are so competitive, shoppers will choose one supermarket over another due to the services offered.

Beth Smith-Danto, a new manager of Pantry Shopper, felt that by providing shoppers with faster, more efficient service, she might be able to improve the store's competitive position and market share.

The following changes are;

• Moving check approval from the main desk to the cash register
• Increasing the limit on cash back from checks from $20 to $50 above the purchase amount.
• Instituting a delivery service to make shopping more convenient, especially for senior citizens

Problems

• Beth had not changed the checkout system.
• The last major remodeling of the checkout system occurred in 1982.
• The demand at the store has increased and the technology of the cash registers has changed.

Objectives

• Redesigning the checkout system
• Use store square footage efficiently
• To design the system for peak usage but does not want to over design the system

Collected Data

Customers arrived at the checkout at a rate of approximately 100 per hour.

20 % of the customers had 10 items or less and took about 2 minutes to serve on average

80% of the customers had more than 10 items took about 4 minutes to process

Queuing Diagram

[pic 1]

Model Analysis

Customer arrival rate       →         Poisson Distribution
Service time rate               →         Exponential distribution

Therefore, the model that will fit in is M/M/S model.

Express Lane Analysis

[pic 2]

Normal Lane Analysis

[pic 3]

Cost Analysis

Total cost                  = Total service cost + total waiting cost (in system)

                         = (S x Cs ) + (L x Cw)

Assume :          Cost of waiting = 12 dollars/hour        = 0.200 dollars/minute

                 Cost of service = 10 dollar/hour        = 0.167 dollars/minute

[pic 4]

When         S         = Number of channels        

                L          = Average number of customer in the system

                Cs        = Cost of providing service per server per minute