JUNE 13, 2013

Since I live in Orlando, the theme park capital of the world, the recent New York Timesarticle (June 10, 2013) “At Theme Parks, A VIP Ticket to Ride”, caught my eye. Theme parks have traditionally been the ultimate melting pots. Tourists, retirees, rowdy teenagers, families and fathers who would rather be golfing are all thrown together in an egalitarian experience in which the queue for one is the queue for all, and cotton candy is the food of the masses. Not anymore.

As stratification becomes more pronounced in all corners of America, from air travel to Broadway shows to health care, theme parks in recent years have been adopting a similarly tiered model, with special access and perks for those willing to pay. Now Universal Studios has pushed the practice to a new level. It has introduced a $299 V.I.P. ticket (the regular admission is about $85), just in time for the summer high season, that comes with valet parking, breakfast in a luxury lounge, special access to Universal’s back lot, unlimited line-skipping and a fancy lunch.

Fearful of puncturing its utopian image, Disney has stuck to a single class of ticket. V.I.P. tour guides are available, but Disney charges an exorbitant price — $380 an hour, with a minimum of six hours — to limit demand. Business is good at both companies. Universal’s 3 theme parks in the U.S. attracted 20 million people last year, a 19% increase from 2010. The Magic Kingdom at Walt Disney World recently recorded the busiest day in its 41-year history.

The amusement park industry urgently wants to expand profits without introducing costly new rides every summer. Universal, which recorded $953 million in profit from its parks in 2012, has no major new attractions planned until next year; the V.I.P. Experience, in the meantime, is a relatively low-cost way to generate revenue and send a message of bigger and better into the marketplace.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.com. Professors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.

June 6, 2013

by Barry Render

Roof of new Walgreen store in Evanston, IL contains 800 solar panels

As the Walgreen Company expands its sales items to fresh salads, Redbox DVD rentals and digital photo scanners, among other products, its consumption of power keeps inching up. While the drugstore chain cannot significantly reduce its electricity use in all stores immediately, it is building its first “net zero energy” store in Evanston, IL, that it hopes will produce more energy than it consumes. Alternative energy equipment at the store includes more than 800 solar panels on the roof, two 35-foot wind turbines and a geothermal energy system dug hundreds of feet beneath the store’s foundation.

The net zero concept is part of the retail giant’s overall sustainability plan to reduce energy use by 20% by 2020 across all of its more than 8,000 stores, reports The New York Times (June 5, 2013). The cost of building the new store will be about twice that of a typical new store. Over time, however, executives expect to recoup the extra costs from reductions in the store’s energy use, tax credits and rebates from utility companies.

Walgreen is also incorporating several conservation and energy producing strategies in existing stores, including LED lighting, energy-efficient building materials and carbon dioxide refrigerant for heating, cooling and refrigeration.

The new store, on the site of an old store that had been razed, is being built by recycling more than 85% of the demolished store’s material like bricks, concrete and metal. In addition, Walgreen has drilled eight 550-foot holes for pipes — about as deep as the landmark Chicago Board of Trade building is tall — to create a geothermal energy system that will use the constant temperature of earth to heat and cool the building.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.com. Professors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.