FITNESS PLUS CASE STUDY

Fitness Plus is a full service health and sports club in Greensboro, North Carolina. The club

provides a range of facilities and services to support three primary activities as follows :

Issues :
Fitness Activities Recreation Activities Relaxation Activities

 Aerobic Rooms(35  8 Racquetball courts  Yoga classes (twice a

people/class) week)
 6 tennis courts

 Free weight  Whirlpool tubs located in

 Outdoor pool
each locker room
 Workout room (24
 City Recreation (Softball,
Nautilus machines)  Trained massage therapist
Volleyball, Swim teams)
 Cardiovascular

workout room

consists of 9 stair

steppers, 6 treadmills,

6 life cycle bikes, 3

airdyne bikes, 2 cross

aerobics machines, 2

rowing machines and

1 climber (total 29

equipments)
 Due to growth in membership and increased in demand, Fitness Plus become congested.

The case study will focus on the current capacity issues of Fitness Plus and the decision

whether to expand the existing capacities or build a new facility

 Focus for the capacity solution will be on the three areas of customer complaints that is

cardiovascular, aerobics and nautilus

 New competitors in the area include YMCA (offers a full range of services at a low cost),

OASIS (caters to members above 16) and Gold’s Gym (weight and cardiovascular

training only)
1. What method would you use to measure the capacity of Fitness Plus

The suitable method to measure capacity of Fitness Plus is by using the input measures

because the club is a flexible flow process and members can choose their own workouts.

At current time with current flow of members, Fitness Plus has large periods of operating

near peak capacity in multiple areas.

This caused flow issues including bottleneck in more popular workout areas. We can

assume that members are using more than one area of fitness centre during each visit.

Currently, approximately 80 members per hour enter the club during peak hours but we

cannot identify which areas the member specifically.

Has Fitness Plus reached its capacity?

From the calculation of capacity cushion in year 2000 and 2005, it shows that Fitness

Plus has reached its capacity by increasing of demand

Weekly Operation Hours – 101 hours

Peak Demand – 3 hours daily from 4.00 pm to 7.00 pm

Aerobics : 35 members per hour

Cardiovascular : 29 pieces of equipment ( we assume equipment will be limited to 30

minutes per member)

Nautilus : 24 pieces of equipment ( we assume equipment will be limited to 30 minutes

per member)

Current capacity measured as inputs for nautilus, cardiovascular, and aerobics fitness

Current demand is 88 members per hour (35+ 29 +24 = 88)

Projected demand is 141 members per hour (35+58+48 = 141)

Capacity cushion is the amount reserve capacity a process uses to handle sudden

increases in demand or temporary losses of production capacity. It measures the amount

by which the average utilization falls below 100%. Large cushions appropriate when

demand varies and uncertain where in this case, demand on some days of the week is

predictable higher than on other days.

In 2000 – Average is 15 members per hour

Utilization = Average Output Rate/ Maximum Capacity x 100

15/88 x 100 = 17%

Capacity cushion in 2000 = 100% - 17% = 83%

 In 2005 – Average is 25 members per hour

Utilization = 25/88 x 100 = 28%

Capacity cushion in 2005 = 100%-28% = 72%

To get an 83% capacity cushion like in 2000, with an average flow of 25 members per

hour of year 2005, the capacity would have to be increased to 141 members per hour.

Special consideration should focus on the cardiovascular area where demand is over

capacity at peak times. Because of the limited amount of land at the current facility,

expansion from 88 to 141 members per hour is probably not feasible.

2. Which capacity strategy would be appropriate for Fitness Plus?

For the short term strategy:

 Focus at the bottlenecks areas which are aerobics, Cardiovascular and Nautilus. This

strategy implies the limitation of time for these 3 areas during peak demand.

 Continued tracking of member usage of facility services and the new membership

campaign in January. It can be done through limiting the membership due to

excessive in capacity demanded. Therefore, customer satisfaction will be increased.

 Improve preventing maintenance of equipment and facility in general. This strategy

will lower the repair cost and will maximize the usage of its services life.
  Improve the current business and fulfilment of these needs, targeted analysis will be

completed.

For the long term strategy:

 Need to look into four steps to arrive at the proper capacity decision. Those steps are:

o Estimate capacity requirement

o Projected Demand versus current capacity

o Identify capacity alternatives actions

o Evaluate alternatives identified

 Along with the current situation, Fitness Plus has three long term alternatives

o No expansion of existing facilities and wait to see what market bear in the

future before proceed with the decision on expansion

o Minor expansion of existing facilities on the limited land available at the

current site

o Major expansion to a second facility in the downtown area.

 Need to consider expansion in order to determine the optimum economics of scale to

o Fixed costs
 o Reduced construction costs

o Identify process advantages

 Based on customer’s complaint and average capacity running well,

o First alternative, no expansion, might be eliminated.

o For the second alternative, minor expansion of the existing facility, the limited

is due to lack of land at the current location.

o Third alternative, the expansion strategy, is the best choice for the long term

strategy. It is because this strategy keeps the Fitness Plus ahead of customer

demand.

 Finally, the Fitness Plus needs to announce its long term expansion plans to prevent

the competitors to do the same thing. It also will increase customer’s loyalty.

3. How would you link the capacity decision being made by Fitness Plus to other types

of operating decisions?

Other types of operating decisions are

1. Handling a waiting line problem

The service system has multiple lines and mixed arrangement of facilities involving

customers with individual service needs. Current practise or priority rules of Fitness Plus

are base on First Come First Serve basis.

 In order to solve this problem, Fitness Plus needs to calculate both arrival and service

time distributions by considering these five factors:

a) Line Length – both in terms of customer service and capacity

b) Number of customers in systems – efficiency and capacity

c) Waiting time in line – including service rate and customer perceptions

d)Total time in systems – indicate problems with service, capacity or customers

e) Service facility utilization – operating costs of total facility

2. The Layout Decision

Layout increase space, equipment, peak capacity of some areas

The purpose of facility to satisfy more/current customer base and attract new customers

Fitness Plus must consider alternatives to customer flow such as assigned customers to

designated time for using equipment especially during peak hour

Members have opportunities to take advantage of other, less popular areas while they wait
Based on designated time, customer can have gap to return to Nautilus or Cardiovascular

equipment for workout.

Have a set time limit for their workout on this equipment (during peak time only)

3. The Scheduling Decision

The scheduling of time for each employee with aerobic classes where a sign up sheet or

reservation system for aerobic class scheduling in order to help prevent customer

disappointments around full classes.

Reservation system can be as an excellent tracking tool to determine what is the most popular

class and also the peak period

Other solution is to stagger the employees shift to eliminate excess staff members working at

slow time and concentrated on the peak time

Fitness Plus can enhance the relationship between the employees and customers by improving

personal interaction and attachment of instructor to meet customer’s satisfaction.