CASE FITNESS PLUS, PART A Fitness Plus is a full-service health and sports club in Greensboro, North Carolina.

CASE FITNESS PLUS, PART AFitness Plus is a full-service health and sports club inGreensboro, North Carolina. The club provides a range offacilities and services to support three primary activities:fitness, recreation, and relaxation. Fitness activities generallytake place in four areas of the club: the aerobics room,which can accommodate 35 people per class; a roomequipped with free weights; a workout room with 24pieces of Nautilus equipment; and a large workout roomcontaining 29 pieces of cardiovascular equipment. Thisequipment includes nine stairsteppers, six treadmills, sixlife-cycle bikes, three airdyne bikes, two cross-aerobicsmachines, two rowing machines, and one climber.Recreational facilities comprise eight racquetball courts,six tennis courts, and a large outdoor pool. Fitness Plusalso sponsors softball, volleyball, and swim teams in cityrecreation leagues. Relaxation is accomplished throughyoga classes held twice a week in the aerobics room,whirlpool tubs located in each locker room, and a trainedmassage therapist.Situated in a large suburban office park, Fitness Plusopened its doors in 1991. During the first two years, membershipwas small and use of the facilities was light. By1992, membership had grown as fitness began to play alarge role in more and more people’s lives. Along with thisgrowth came increased use of club facilities. Records indicatethat, in 1995, an average of 15 members per hourchecked into the club during a typical day. Of course, theactual number of members per hour varied by both dayand time. On some days during a slow period, only six toeight members would check in per hour. At a peak time,such as Mondays from 4:00 P.M. to 7:00 P.M., the numberwould be as high as 40 per hour.The club was open from 6:30 A.M. to 11:00 P.M.Monday through Thursday. On Friday and Saturday, theclub closed at 8:00 P.M., and on Sunday the hours were12:00 noon to 8:00 P.M.As the popularity of health and fitness continued togrow, so did Fitness Plus. By May 2000, the average numberof members arriving per hour during a typical day hadincreased to 25. The lowest period had a rate of 10 membersper hour; during peak periods, 80 members per hourchecked in to use the facilities. This growth brought complaintsfrom members about overcrowding and unavailabilityof equipment. Most of these complaints centered onthe Nautilus, cardiovascular, and aerobics fitness areas.The owners began to wonder whether the club was indeedtoo small for its membership. Past research had indicatedthat individuals work out an average of 60 minutes pervisit. Data collected from member surveys showed the followingfacilities usage pattern: 30 percent of the membersdo aerobics, 40 percent use the cardiovascular equipment,25 percent use the Nautilus machines, 20 percent use thefree weights, 15 percent use the racquetball courts, and 10percent use the tennis courts. The owners wonderedwhether they could use this information to estimate howwell existing capacity was being utilized.If capacity levels were being stretched, now was the timeto decide what to do. It was already May, and any expansionof the existing facility would take at least four months.The owners knew that January was always a peak membershipenrollment month and that any new capacity needed tobe ready by then. However, other factors had to be considered.The area was growing both in terms of population andgeographically. The downtown area had just received amajor facelift, and many new offices and businesses weremoving back to it, causing a resurgence in activity.With this growth came increased competition. A newYMCA was offering a full range of services at a low cost.Two new health and fitness facilities had opened withinthe past year in locations 10 to 15 minutes from FitnessPlus. The first, called the Oasis, catered to the young adultcrowd and restricted the access of children under 16 yearsold. The other facility, Gold’s Gym, provided excellentweight and cardiovascular training only.As the owners thought about the situation, they hadmany questions: Were the capacities of the existing facilitiesconstrained, and if so, where? If capacity expansionwas necessary, should the existing facility be expanded?Because of the limited amount of land at the present site,expansion of some services might require reducing thecapacity of others. Finally, owing to increased competitionand growth downtown, was now the time to open a facilityto serve that market? A new facility would take sixmonths to renovate, and the financial resources were notavailable to do both.Questions1. What method would you use to measure the capacity ofFitness Plus? Has Fitness Plus reached its capacity?2. Which capacity strategy would be appropriate forFitness Plus? Justify your answer.3. How would you link the capacity decision being madeby Fitness Plus to other types of operating decisions?