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Has Fitness Plus Reached Its Capacity Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 3994 words Published: 1st Jan 2015

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Fitness Initial stands out as the most substantial independently owned or operated fitness center business across the world with much more than 540 branches globally achieving much more than 1.4 million normal members throughout 19 nations. Within the united kingdom solely you’ll discover 161 clubs of Fitness Initial with much more than 425,000 members.

Within the year of 2005, organization ended up being bought by Partners of BC Partners, an EU non-public equity group of businesses. Within the country like Australia, Fitness Initial acquired much more than a wide selection of Residing Well Lady locations really owned and operated by Hilton Group. Additionally, It made the acquisition of chain of healthclubes, 11-gym Healthland and right now possess in excess of eighty fitness centers throughout Australia.

It’s behind the worldwide International Fitness Week campaign to encourage much more individuals to discover what fitness regime works for them. The campaign uses former Spice Girl Mel B as the face of International Fitness Week

Subsequent consist of the unique routines supplied by Fitness Plus, within their own possible :

Fitness Routines

• Exercise region

• Free excercise weights

• Training region

• Cardiovascular workout room (9 stair steppers, 6 treadmills, 6 life-cycle bikes, three airdyne bikes, 2 cross-aerobics machines, 2 rowing machines, and 1 climber)

Recreation Activities

• Racquetball (8 courts)

• Tennis (6 courts)

• Outdoor pool

• City sports teams (softball, volleyball, and swim teams)

Relaxation Activities

• Yoga classes (2/week in aerobics room)

• Whirlpool tubs (1/locker room)

• Trained massage therapist

Hours of Operation

Monday via Thursday 6:30 a.m. to 11:00 p.m.

Friday and Saturday 6:30 a.m. to 8:00 p.m.

Sunday 12:00 p.m. to 8:00 p.m.

Capacity Presumptions

Concentrate to the possible choice will most likely be about a couple of aspects of client issues: exercise, cardio exercise, also as nautilus areas. Restrictions ought to be positioned on utilisation on these locations simply because of maximum customer desire, as represented here. This provides a way of measuring in number of members utilizing the health club per hour with regard to capacity scheduling. A essential component of total capacity organising for this case would be to observe that the maximum demand is really about 3 hours each day. Furthermore, a issue that creates capacity organizing much more complex tends to be that a single member will use all of these region which are extremely demanded, and could make use of an region much more frequently than once.

Maximum Demand

The maximum demand details are supplied on the purpose of looking at trouble spots also as maximum usage of particular precise regions of this facility.

• Exercise = 35 members per hour in a 1 class. We tend to believe that hardly any members is going to finish a number of exercises class.

• Cardio exercise = 58 members per hour in which the machines are tied to half an hour for every member simply because you will find 29 machines. Nevertheless, observe that a single member could use a number of machine, which tends to make the maximum demand capacity organizing much more complex.

• Nautilus = 48 member per hour, let’s assume that region is not unfilled at the begin of the maximum demand, the users of the health club move at stable rate and in pattern, 24 machine are utilized by members which is in timeframe is use of 1 minute per machine, a couple of hanging around and activity among areas. We have to make supposition that generally completely no member uses any piece of machines ; on the other hand, a member may make use of a handful of pieces and come correct out of the sequence.


So it appears apparant that club areas of aerobics, cardiovascular, and nautilus could effortlessly accommodate peak demand, if the room limitations are adhered-to utilizing employee monitoring. But you will find complaints. The suspected reason for this is that members use much more than 1 region of the club. Moreover, it’s likely that members visiting much more than 1 region throughout their workout heavily use the aerobics, cardiovascular, and nautilus areas. Numerous members might also workout for much more than 1 hour.

Measurement Technique

The issue identified is capacity, and being that Fitness Plus is really a flexible flow procedure, i.e., members select their own workouts, input measures are being utilized. At the present time and with the present flow of members, Fitness Plus has big periods of operating near peak capacity in multiple areas. This is causing flow problems, such as bottlenecking within the much more well-liked workout areas. Members are utilizing much more than 1 region of the fitness center throughout every go to, but there’s a lack of information to depict actual usage of these areas. For instance, we know that approximately 80 mph enter the fitness center throughout our 3 peak hours, but we don’t know which areas the members go to specifically. As a result, the fitness center intends to measure use of the 3 issue areas (aerobics, cardio, nautilus) throughout the peak three-hour period. Members will utilize their membership card to enter and leave all areas of the center. The average utilization of every region will probably be computed and also the outcomes will probably be depicted in a chart, like the attached example Figure three. This will show actual usage throughout peak hours of the fitness center. Measurement ought to be over a fairly short time period since member complaints have recently increased. Some action is required within the short-term.

Key Indicators

Particular key indicators have been identified based on case info, which outcomes in a capacity forecast approach. Indicators consist of:

• External Leading Indicators

• Coincident Indicators

• Lagging Indicators

The measurement technique for the key indicators offers a technique for every also as other choices for analysis. The measurement methods for every key indicator consist of:

• External Leading Indicators = Causal Forecasting

• Coincident Indicators = Time-Series Analysis

• Lagging Indicators = Time-Series Analysis

The key indicator information and measurement methods are also depicted in Figure 4.

2. Which capacity technique would be suitable for

Fitness Plus? Justify your answer.

In a short time period, fitness initial has to ascertain the requirements and requirements of the possible clients, and endeavour to satisfy mismatch between those requirements and present offerings. To improve the existing dealings and accomplishment of today’s requirements, directed study will probably be finalized. This will take account of: gathering real control information of equipment and rooms, bringing on innovation and ideas from operatives, market study, service plan study, effectual time table, and enhanced defensive upholding of equipment and also the service facility as a entire.

1. PROBLEM: The capacity of the fitness club, mostly within the Nautilus, cardiovascular, and aerobics fitness areas, is insufficient to meet demand.

2. RECOMMENDED Answer: Construct an extra facility.


(A) Do nothing. Growth has increased the average number of members checking in at the existing fitness club to 25 members per hour in 2000. Nevertheless, complaints from members about overcrowding and unavailability of equipment could lead to dissatisfied members terminating their membership and possibly joining an additional club. If the growth continues, the number of complaints and dissatisfied members ought to improve. “Do nothing” isn’t a great answer.

(B) Extend company hours. The club is currently open 101 hours per week. Growing the number of open hours could spread out the number of clients throughout the day. Nevertheless, peak times will still exist and continue to produce complaints. Extending company hours isn’t a great answer.

(C) Expand the capacity of the facility. (See attached calculation sheet) The average number of members arriving per hour varies a great deal between the slow periods and peak times. The capacity cushion in 1995 was an 83%. There’s no mention of complaining throughout this time. The capacity cushion in 2000 is 72%. Present capacity measured as inputs for the Nautilus, cardiovascular, and aerobics fitness areas is 88 members per hour. To get an 83% capacity cushion like in 1995, with an average flow of 25 members per hour of year 2000, the capacity would need to be increased to 147 members per hour. Unique consideration ought to focus on the cardiovascular region where demand is over capacity at peak times. Simply because of the limited quantity of land at the present facility, expansion from 88 to 147 members per hour is most likely not feasible.

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(D) Build an extra facility. The resurgence of activity within the downtown region has brought increased population and new companies. Fitness club competition already exists within the downtown market. Nevertheless, members are still coming to Fitness Plus with the overcrowding and unavailability of machines with competing fitness clubs only 10-15 minutes away. Some members should prefer the services of Fitness Plus over the competition. Building an extra facility the exact same size as the present facility would double the capacity of Fitness Plus within the region. Building a new Fitness Plus club downtown will encourage a few of the present members who are closer to downtown to begin utilizing the new location. Building an extra facility will put Fitness Plus in a growing market, take a few of the strain off the present facility by growing capacity and decrease the number of dissatisfied clients.

4. ADDITIONAL CONSIDERATIONS: The perfect capacity cushion for the Fitness Plus facility with a capacity of 88 might not be 83%. The 83% capacity cushion was utilized within the calculations simply because there was no mention of member complaints in 1995. The perfect capacity cushion might be somewhere between the 83% in 1995 and also the 72% in 2000. If the perfect capacity cushion is lower than 83%, the capacity would have to be increased but not as a lot as the 147 within the calculations. Extra info would be required to discover the perfect capacity cushion.

Fitness Plus requirements to produce greater value for activities and services which are not being utilized to efficient capacity. Ideas will probably be generated from the employees to make certain that there’s buy-in from the top level down. Employees are dealing with clients everyday on a much more personal level. They might be able to assess what the facility is missing to satisfy a greater quantity of clients. Study will probably be carried out to make particular that changing customer requirements are identified. You will find two new competitors that have opened fitness centers within 15 minutes of Fitness Plus, and every facility caters to a various clientele. 1 caters to a young adult crowd, not allowing kids under 16 to access the facilities, and also the other concentrates on weight and cardiovascular training only. Taking this into account, Fitness Plus has the capability to satisfy extra customer requirements with the present facility offerings.

Fitness Plus has a waiting line issue that’s resulting in bottlenecks. The service system has multiple lines along with a mixed arrangement of facilities involving clients with individual service requirements. The present priority rule is first-come, first-served. Fitness Plus will have to calculate both the arrival and service time distributions. To complete the waiting line analysis, Fitness Plus will also have to think about:

1. Line length – both in terms of customer service and capacity

2. Number of clients in system – related to efficiency and capacity

three. Waiting time in line – such as service rate and customer perceptions

4. Total time in system – which might indicate issues with service, capacity or customer themselves

5. Service facility utilization – keeping in mind total facility operating costs

After analyzing the information collected via the monitoring, the outcomes might foster the development of a new layout for the facility. This layout might improve the space, equipment, and peak capacity of some areas, and decrease or eliminate other people. The focus of the facility might change to satisfy much more of the present customer base and to attract new clients which are searching for services which are not accessible at the competing locations. Additionally, Fitness Plus ought to think about alternatives to customer flow, like clients being assigned a designated time to use equipment throughout peak hours. This might be handled upon registration when entering the club. Members would have opportunity to take benefit of other, less-popular areas although they wait. They would then have a ten-minute window, based on their designated time, to return to the Nautilus or cardiovascular equipment for their workout. These members would also have a set time limit for their workouts on this equipment throughout peak times only.

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Other opportunities might be apparent within the scheduling of employees and aerobics classes. For aerobic class scheduling, a sign-up sheet or reservation system will assist to stop customer disappointments around full classes. A reservation system is also an outstanding tracking tool to figure out what classes are the most well-liked and what times are the most sought after. For employee scheduling, staggering employee shifts ought to be evaluated. Staggering shifts of staff will assist to eliminate excess staff members working at slow times. By concentrating on peak times, the customer will have much more personal interaction and attention from the staff, possibly improving their satisfaction.

Creating a normal schedule for equipment maintenance will lower repair costs for Fitness Plus, but most of all, will maximize the availability of the equipment that clients are demanding. This will also have an indirect effect in growing both customer and employee morale and satisfaction (Al-Hassan, 2000).

Fitness Plus will employ benchmarking of their competitors in an effort to discover from their successes and failures. “Benchmarking is moving much more towards areas that reinforce the role of the employee within the success of the business like customer service, high quality, teamwork, communication and supplier relationships” (Simpson, 2000). Analysis of outcomes will probably be completed to permit for adjustments of the objectives and improvement plan.

In the long-term, Fitness Plus will have to think about expansion and figure out the optimum economies of scale to spread fixed costs, decrease construction costs, and identify procedure benefits. Present facilities limit the capacity cushion. As region population grows, Fitness Plus will have to expand to improve its capacity cushion. This will permit them to effectively deal with sudden increases in demand by its members. Average utilization rates ought to be maintained at a rate somewhat much less than 100 percent to steer clear of constant operation at peak capacity. The capacity cushions, both existing and required, are measured as 100 percent minus the utilization rate as a percentage:

Capacity cushion = 100% – Utilization rate (%)

Utilization is equal to the average output rate divided by maximum capacity:

Utilization = Average output rate x 100%

Maximum capacity

Simply because Fitness Plus’ capacity demand can vary considerably, it’ll have to think about a larger capacity cushion-possibly as a lot as 20%–to maintain satisfactory customer service levels and sustain membership sales.

Choice Inputs

Before making its final choice on expansion, Fitness Plus will have to undertake four actions to arrive at the correct capacity choice. These actions consist of:

1. Estimate Capacity Requirements

2. Address Projected Demand versus Present Capacity

three. Identify Capacity Alternative Choices

4. Evaluate Alternatives Identified

Initial, estimated capacity requirements will probably be calculated for every region as follows:

Number of machines needed = [Forecast # customers/year] x Customer time per machine

hrs avail from machine per yr much less desired capacity cushion

Setup time isn’t a main factor within the customer workout procedure, and won’t have to be included within the calculation.

Next, Fitness Plus will have to identify gaps between projected demand and present capacity. This will probably be evident per the outcomes of member monitoring and analysis throughout short-term improvement procedure. Those areas with bottlenecks-Nautilus, cardiovascular and aerobics-will be the primary focus since overall capacity can’t be expanded unless bottleneck operation is expanded.

The third step would be to take a look at alternatives and identify a number of choices. In light of the present scenario, Fitness Plus has 3 long-term alternatives:

1. No expansion of existing facilities and wait to see what the market will bear within the future prior to making a choice on expansion

2. Minor expansion of existing facilities on the limited land accessible at the present website

three. Major expansion to a second facility within the downtown region

The final step would be to evaluate these alternatives based on both qualitative and quantitative terms, such as capacity technique, market competition, and financial analysis with price estimates and money flows.

Simply because clients are already complaining and average capacity is running well above cushion, the initial alternative-no expansion-would most likely be eliminated. Fitness Plus is beyond the wait-and-see phase. Alternate two-minor expansion of the existing facility-is extremely limited because of the lack of land at the present location. Given the steady population improve and Fitness Plus’ only competition in full range workout services being the YMCA, alternative three-the expansionist strategy-may be the very best option. This capacity technique will maintain Fitness Plus ahead of customer demand. This will also limit the competition’s abilities of expanding by growing their risk of overburdening the market with too a lot capacity.

Fitness Plus will have to act rapidly to announce its long-term expansion plans to stop giving the competition the opportunity to do the exact same. Additionally, Fitness Plus runs the risk of over expansion, ought to the population improve level off or the fitness craze decrease.

Plan Evaluation

Fitness Plus’ implemented short-term improvements will probably be readily measurable by monitoring the number of customer complaints, the continued tracking of member usage of facility services, and also the new membership campaign in January. Assuming that Fitness Plus announces it’s main expansion plans-the new downtown facility-January membership will also be a gauge for that technique also. Fitness Plus will have to continue to observe population growth trends and region competition as it expands into this new market. Continued analysis of market capacity will probably be needed.

three. How would you link the capacity choice being made

by Fitness Plus to other kinds of operating decisions?

There’s a random demand for the firm’s capacity in every period: the demand in excess of the capacity is lost, and revenue is generated for the fulfilled demand. At the beginning of every period, the firm may improve its capacity via buying equipment for immediate delivery, which is constrained by a random supply limit, or it may sign a future contract for equipment delivery within the following period. We assume that the firm’s capacity may partially turn out to be obsolete because of natural deterioration or technology innovation. We aim at characterizing optimal capacity expansion methods and comparing the profit functions also as the optimal control policies of various choices. Specifically, we show that the optimal capacity expansion policy for the present period is determined by a base-stock policy. Compared with the case where no future contracts are accessible, the optimal control parameters of capacity expansion are usually smaller. We further show that when the obsolescence rate is deterministic, the optimal policy for capacity expansion via future contracts is also a base-stock kind. The outcomes are extended to the instances with stochastically dependent capacity supply limits and stochastically dependent demand processes, which establish the robustness of the optimal policy in numerous market conditions.

Investment in capacity expansion remains 1 of the most critical decisions for a

manufacturing organisation with global production facilities. Multiple elements have to be

considered making the choice procedure extremely complex.

The study discovered that there’s a substantial

quantity of work on development of mathematical multi-factor models for capacity

expansion. Despite that, no single work captures all of the various facets of the issue.

Since the early 1960s, numerous quantitative studies of capacity expansion issues have

been conducted. Manne (1961) offers the initial and simplest models of capacity

expansion with deterministic demand, single facility and infinite economic life. His

book (Manne, 1967a) offers a description of numerous capacity expansion issues in

which optimal location for every expansion is considered explicitly (Erlenkotter, 1967;

Manne, 1967b). By the early 1980s, the capacity expansion literature evolved to consist of

multiple problems and think about multiple facilities within the decision-making procedure. Luss (1982) points out that the typical objective was to minimise the discounted costs

associated with the expansion procedure. Porter (1980), nevertheless, argued that the capacity

expansion issue isn’t as easy as just carrying out such analysis based on a couple of

elements. Estimating the elements that influence a capacity expansion is really a subtle issue in


Most of the recent work within the region of capacity expansion choice processes has

focused on the advancement of computational methods (Syam, 2000) to solve

various aspects of the issue based on various constraints and objectives. Some

work has been carried out investigating soft elements (O’Brien and Smith, 1993;

Meijboom and Voordijk, 2003) yet no complete procedure has been put forward. Thus the

challenge would be to develop a choice procedure that will capture leading thinking within the region

and to expand this to consist of soft problems in capacity expansion in global manufacturing


Fitness Plus, Component B, explores alternatives to expanding a new downtown facility and is included within the Instructor’s

Manual. If you’re interested in this topic, ask your instructor for a preview.


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