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**Fitness Plus: Capacity Considerations**

Fitness Plus is a full-service health and sports club in Bristol, England. The club provides a range of facilities and services to support three primary activities: fitness, recreation, and relaxation.

**Facilities and Equipment:**

- **Fitness Activities:**
- Aerobics room: Accommodates 30 people per class.
- Free weights room.
- Nautilus equipment room: Contains 26 pieces of equipment.
- Cardiovascular equipment room: Contains 28 pieces, including:
- 4 stair steppers
- 6 treadmills
- 4 life-cycle bikes
- 4 Watt bikes
- 6 cross aerobics machines
- 4 rowing machines

- **Recreational Facilities:**
- 8 racquetball courts
- 6 tennis courts
- Large outdoor pool
- Sponsorship of racquetball, volleyball, and swim teams in city recreation leagues

- **Relaxation Services:**
- Yoga classes: Held twice a week in the aerobics room
- Whirlpool tubs: Located in each changing room
- Massage therapist

**History and Membership Growth:**

Fitness Plus opened in 2004 in a large suburban office park. During the first two years, membership was small and use of the facilities was light. By 2006, membership grew significantly as fitness gained popularity. Records from 2009 show an average of 15 members per hour checked in during a typical day. Numbers varied, with only 6-8 members per hour during slow periods and up to 50 per hour during peak times (e.g., Mondays from 4:00 pm to 7:00 pm).

- **Operating Hours:**
- Monday to Thursday: 6:30 am to 11:00 pm
- Friday and Saturday: Closed at 8:00 pm
- Sunday: 8:30 am to 6:00 pm

By May 2014, the average number of members per hour increased to 25. During peak periods, 85 members per hour checked in. Complaints arose about overcrowding and unavailability of equipment, particularly in the Nautilus, cardiovascular, and aerobics areas.

**Member Usage Patterns:**

- Average workout duration: 60 minutes
- Aerobics: 30% of members
- Cardiovascular equipment: 40% of members
- Nautilus machines: 25% of members
- Free weights: 20% of members
- Racquetball courts: 15% of members
- Tennis courts: 10% of members

**Considerations for Capacity Expansion:**

The owners are considering whether the club's current capacity is too small. Factors include:

- Potential capacity constraints.
- Need for capacity expansion.
- Possibility of expanding the existing facility, which might require reducing other services due to limited space.
- Increased competition and growth in the city centre, possibly indicating the need for a new facility. A new facility would take six months to renovate, and financial resources are limited to either expanding the current facility or opening a new one.

**Questions:**

1. What method would you use to measure the capacity of Fitness Plus? Has Fitness Plus reached its capacity? Justify your answer, including relevant calculations and consideration of the capacity cushion.

2. Which capacity strategy would be appropriate for Fitness Plus? Justify your answer, including consideration of short- and long-term alternatives.

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

Answer :

1- The method used to measure capacity of Fitness Plus is the utilization rate. Based on the calculation, it appears that Fitness Plus has not reached its capacity in any of the fitness areas. 2. The capacity strategy that would be appropriate for Fitness Plus is the expansionist strategy. 3. The capacity decision being made by Fitness Plus is linked to other types of operating decisions, including staffing, marketing, and financial decisions.

1- The method used to measure capacity of Fitness Plus is the utilization rate. The utilization rate is calculated by dividing the actual output by the design capacity. The design capacity is the maximum output that can be achieved under ideal conditions, while the actual output is the actual amount of output produced.

To calculate the utilization rate for each of the four fitness areas, we need to know the design capacity and actual output for each area. The design capacity for the aerobics room is 30 people, the free weights room is 26 people, the Nautilus room is 26 people, and the cardiovascular room is 28 people. The actual output for each area can be calculated by multiplying the average number of members arriving per hour by the percentage of members that use each area. For example, the actual output for the aerobics room is 25 members per hour x 30% = 7.5 members per hour.

The utilization rate for each area is as follows:
- Aerobics room: 7.5/30 = 25%
- Free weights room: 25 x 20% = 5/26 = 19.2%
- Nautilus room: 25 x 25% = 6.25/26 = 24%
- Cardiovascular room: 25 x 40% = 10/28 = 35.7%

Based on these calculations, it appears that Fitness Plus has not reached its capacity in any of the fitness areas. However, it is important to consider the capacity cushion, which is the amount of capacity in excess of expected demand. The capacity cushion for each area is as follows:
- Aerobics room: 30 - 7.5 = 22.5
- Free weights room: 26 - 5 = 21
- Nautilus room: 26 - 6.25 = 19.75
- Cardiovascular room: 28 - 10 = 18

While Fitness Plus has not reached its capacity, the capacity cushion for each area is relatively large, indicating that there is a lot of unused capacity. This could be a concern for the owners, as unused capacity is a cost to the business.

2- The capacity strategy that would be appropriate for Fitness Plus is the expansionist strategy. The expansionist strategy involves adding capacity in large increments in anticipation of future demand. This strategy is appropriate for Fitness Plus because the business is experiencing growth and there is potential for even more growth in the future due to the population and geographic growth in the area.

In the short-term, Fitness Plus could consider expanding the existing facility to accommodate the growing demand. This could involve adding more equipment or expanding the size of the fitness areas. In the longer-term, Fitness Plus could consider opening a new facility in the city centre to serve the growing market in that area. This would require a significant investment, but could potentially bring in new customers and increase revenue.

3- The capacity decision being made by Fitness Plus is linked to other types of operating decisions, including staffing, marketing, and financial decisions. For example, if Fitness Plus decides to expand the existing facility or open a new facility, they will need to hire additional staff to manage the increased capacity. They will also need to consider marketing strategies to attract new customers and retain existing customers.

Financially, the capacity decision will have an impact on the business's expenses and revenue. Expanding the existing facility or opening a new facility will require a significant investment, but could potentially increase revenue in the long run. It is important for Fitness Plus to consider all of these factors when making the capacity decision.

Learn more about Utilization rate:

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