Authenticity in Scaling the Vision: Defining Boundaries in the Food and Beverage Entrepreneurship Development Cycle

The October 2015 Food and Beverage Entrepreneurship Roundtable brought together over 30 food and beverage industry leaders, entrepreneurs, faculty, and students at the School of Hotel Administration at Cornell University. Discussion topics covered entrepreneurship in the food and beverage industry, including development, intrapreneurship, operational efficiency, beverage product development, and technology. The roundtable began with the presentation of a five-point framework on food and beverage venue development. The first three phases focused on the launch of a venue, including how to define the guest experience; the creation of operational functionality by strategically planning out the design, flow, and efficiency of a defined space; and development capacity. The remaining two points of the framework focused on post-opening considerations, including operating systems and culture development. Participants discussed the importance of culture in the growth of a business. They suggested that intrapreneurship needs to be fostered in the culture of an organization and in an educational curriculum for those who are preparing to enter the industry. Participants also discussed the fine balance between setting expectations for an experience and subsequently being able to maintain this experience in a fast changing environment. In particular they considered what it means to say no to customers. A discussion on the beverage industry focused on how to distribute products in a crowded marketplace. One method to ensure that the product gets into the hands of the consumers is face-to-face sales. Finally, in the technology session, the group discussed technology adoption, specifically focusing on the point at which technology detracts from the guest experience, how to minimize operational risk from technology, and how to maximize consumers’ adoption rates.

Labor Scheduling Using NPV Estimates of the Marginal Benefit of Additional Labor Capacity

An extensive literature exists on the problems of daily (shift) and weekly (tour) labor scheduling. In representing requirements for employees in these problems, researchers have used formulations based either on the model of Dantzig (1954) or on the model of Keith (1979). We show that both formulations have weakness in environments where management knows, or can attempt to identify, how different levels of customer service affect profits. These weaknesses results in lower-than-necessary profits. This paper presents a New Formulation of the daily and weekly Labor Scheduling Problems (NFLSP) designed to overcome the limitations of earlier models. NFLSP incorporates information on how changing the number of employees working in each planning period affects profits. NFLP uses this information during the development of the schedule to identify the number of employees who, ideally, should be working in each period. In an extensive simulation of 1,152 service environments, NFLSP outperformed the formulations of Dantzig (1954) and Keith (1979) at a level of significance of 0.001. Assuming year-round operations and an hourly wage, including benefits, of $6.00, NFLSP's schedules were $96,046 (2.2%) and $24,648 (0.6%) more profitable, on average, than schedules developed using the formulations of Danzig (1954) and Keith (1979), respectively. Although the average percentage gain over Keith's model was fairly small, it could be much larger in some real cases with different parameters. In 73 and 100 percent of the cases we simulated NFLSP yielded a higher profit than the models of Keith (1979) and Danzig (1954), respectively.