Case Study: McDonald's Capacity Management and Performance Objectives

This case study examines McDonald's approach to capacity management using the Management by Objectives (MBO) framework. It explores strategies for reconciling capacity with demand, including level capacity, chase demand, and demand management. The analysis delves into the implementation of the 'four Ds' – Design, Direct, Develop, and Deliver – within McDonald's operations, highlighting their impact on service delivery. Furthermore, the study evaluates the five key performance objectives: quality, speed, dependability, flexibility, and cost, and calculates the average customer arrival rate and waiting time. The conclusion summarizes the findings and suggests improvements to enhance efficiency and customer satisfaction, emphasizing the importance of technological advancements and online platforms for order and delivery processes. The assignment is a contribution from a student and is published on Desklib, a platform providing AI-based study tools.

MBO CASE STUDY

Table of Contents
INTRODUCTION...........................................................................................................................3
P1 Approaches which Mc Donald seems to take for capacity management to reconcile
capacity and demand..............................................................................................................3
P2 Analysing implementation of four Ds which is by the McDonald restaurant...................4
P3 Evaluating the five performance objectives which mean for the operation in McDonald's. .5
P4 Calculating the average number of customer which are arriving till average time...........5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
MBO refers to the management by objectives which is an strategic approach to enhancing
the performance of an organisation. In this essay, there is the discussion about the different
approaches which is there in the company to reconcile the capacity along with demand. There is
analysis of the implementation of strategies, of four Ds, there is also the evaluation of five
objectives which are there in the company. There is calculation of the average customer Drive
thru or take away as the delivery (Woodhouse 2019).
P1 Approaches which Mc Donald seems to take for capacity management to reconcile capacity
and demand
There are many of the approaches which is there need to take for the capacity
management for reconcile the capacity along with demand.
Level capacity- This is one of the strategy which is there can use to supply the product
according to demand which is setting up uniform level of capacity in some particular period of
time. As per the given scenario there is need to have some minimum capacity which can help in
getting high demand and there is need to fulfil the demand which can be done through having
some capacity which should be there to deliver the product at the instant demand time which can
also help in increase in the delivery along with leads to profit (Vega and et. al., 2016).
Chase Demand- This is the one where production is taken at constant which mean there
is high level of capacity when there is less demand and during the high demand the inventory
capacity got decreases. This means inventory level decrease during high demand period and vice
versa. This refers to the type of strategy where changes are there which is related with the
demand where it matched the demand which is by hiring and firing their workers. In this, there is
control in the level of production along with using the inventories which is used to control the
changes which is there in the demand level.
Demand management- In McDonald there is using the strategy which is there the pull
strategy in which there is creation on demand which is there retailer need to have the stock of
such product to direct deal with their customer. Here, this demand creates the profit and high
level of production which helps in growing the business. Here, McDonald is able to full fill the
demand with the help of their supply chain management which can help in getting execute the
plan which is by minimal disruptions (Tirschwell and et. al., 2018).

P2 Analysing implementation of four Ds which is by the McDonald restaurant
There are the analysis of four Ds which is there by the McDonald restaurant which is
discussed further.
Design- This is the one which is having its own value in the whole procedure of
delivering of services which is in the McDonald restaurant. In which product and process design
plays their major role. Product design refers to the design of the product which can be helpful in
the decision process for which McDonald refers to food product designers which required there
for different customer base. Professional can help in selecting the ingredient, flavour, fragrance
etc. which can be attractive and delicious to create the high demand of such product which can
help the brand to get high profit with high demand. Process design is the one which can help in
getting the cost minimization which is there can support the strategy of the company which is
there to fulfil the market demand which is by efficiency and adequate capacity (Prasetyo 2016).
Direct- Management plays their role in the whole process where all the process is done
which is as per the direction of the management which is there can give the ensure about the
quality which involves the process management along. This management plays its role in the
whole process which is there in the company to get the product till the delivery of the product to
the customer which is by different processes. If there is any change in the direction of the process
or any problem is there then the process management is the one which is responsible for such
activity which need to be under control to get the effective process which is in the business unit
in the McDonald (Feng and et. al., 2016).
Develop- This is the one which is there can help in business to get some new strategy
which can help in growth. This involves the brainstorming where desired outcomes is evaluated
and then responsibility for implementation is there given to owner and then evaluation of budget
and after-that development of implementation plan is scheduled.
Deliver- After the production process is done then its time to delivering the finished food
to the customer which is there in present time as the Drive Thru and McDelivery. In which there
is role of the inventory management which are there can help in managing the stock which is
there as the inventory. This one give the advantage to get the product according to the demand
(Jovanović 2016).

P3 Evaluating the five performance objectives which mean for the operation in McDonald's
There are five performance objectives which is evaluated for the operation in McDonald
and playing their own role in managing the whole business there which is there can help in
getting more profit. These five performance objectives are discussed below.
Quality- This is one of the basic and the most important objective which is there in the
McDonald. The aim is on the quality product which is there can help in delivering them to their
customer. High quality product along with less in price attracts the costumer and the main focus
on the service which is there delivering of high quality service along with product can help in
getting high business. In this company is most focus on implementing some techniques which is
there can help in delivering of best quality service (Wu 2020).
Speed- In relation to providing the delivery in which customer need to wait for their
finished food which takes some time. McDonald is there working on the reducing the delivery
time of the product which also comes under the service for which company is working for to
deliver the best service at reasonable price which is there very less than their competitors.
Average calculated time is 5 min per customer which they also want to reduce it for minimizing
it.
Dependability- This is the one which refers to the service on time where the delivery of
the product should be on time which is the part of the services where speed plays their high level
of role in the process of delivery of product as the service (Bansal and et. al., 2016).
Flexibility- This refers to the flexible in product along with working hours to the
employees which gives the trust towards the company.
Cost- This is another most important objective where to be in the competition, the
company is reducing the production cost while providing the quality product in less price which
is for being top in the market which is there can help in growing.
P4 Calculating the average number of customer which are arriving till average time
Average number of units in the system= u/(1-u)
= [5/ (1-5)]
= [5/-4]
= [-1.25]
= 1.25
Working Note:

u=ra/rs
=25/5
= 5
Average waiting time in the system= ts/(1-u)
= [5/ (1-1.25)]
= [5/-0.25]
= [-20]
= 20
Service rate= ts*12
= 5*12
= 60 Minutes
= 60 minutes per order
There are about 20 people per hour there for the delivery of their product which is there for the
orders (Gama 2017). To minimise the waiting time there is need to show some improvement in
the waiting time which is there can help in getting such high level of delivering of services which
is there can help in getting large customer base in such limited period of time. Using the
technology and different online platform which can help in getting order and can help in getting
deliver as per arrival of the customer which can help in saving the waiting time and also can be
there some minimised time to get the delivery on some limited period of time. There can be the
challenge to get the delivery in such limited time which can help in getting high level of
customer satisfaction which is there can help in generation high productivity which also can help
in getting large profit (Tabouli 2016).
CONCLUSION
From the above discussion, one is able to get the different approaches which is there can
help in reconcile the capacity along with demand. There is discussion about some
implementation of strategy and some analysis on five objective along with suggestion which can
help in improving the time period in delivering process.

REFERENCES
Books and Journals
Woodhouse 2019. Consensus-derived quality performance indicators for neuroendocrine tumour
care. Journal of clinical medicine, 8(9), p.1455.
Vega and et. al., 2016. Establishing cost-effective allocation of proton therapy for breast
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pp.11-18.
Tirschwell and et. al., 2018. Cost-effectiveness of percutaneous patent foramen ovale closure as
secondary stroke prevention. Journal of medical economics, 21(7), pp.656-665.
Prasetyo 2016. Towards strategic mix 5P. International Journal of Business Management and
Economic Research (IJBMER), 7(3), pp.654-661.
Feng and et. al., 2016. Using game theory to optimize allocation of defensive resources to protect
multiple chemical facilities in a city against terrorist attacks. Journal of loss prevention
in the process industries, 43, pp.614-628.
Jovanović 2016. Consumer behaviour in the new products management in Serbia. Management:
Journal of Sustainable Business and Management Solutions in Emerging Economies,
21(79), pp.27-36.
Wu 2020. Combined connected vehicles and variable speed limit strategies to reduce rear-end
crash risk under fog conditions. Journal of Intelligent Transportation Systems, 24(5),
pp.494-513.
Bansal and et. al., 2016. Audit committee, corporate governance and firm performance:
Empirical evidence from India. International Journal of Economics and Finance, 8(3),
p.103.
Tabouli 2016. Employee Performance Scale: Using (CFA) On Jumhouria Bank in Libya.
International Journal of Science and Research (IJSR), 5(6), pp.735-739.
Gama 2017. A balanced scorecard for marketing. International Journal of Business Performance
Management, 18(4), pp.476-494.