Flow Management to Optimize Retail Profits at Theme Parks

In many theme parks, stores are located within major attractions to sell related merchandise. Sales at such stores form a significant portion of theme park profits. Typically, store sales depend upon visitor flows through the attraction, customer satisfaction with the attraction, and the merchandise at the store. In addition, such stores constitute a unique retail environment, as visitor flows to attractions can be managed and stores are not competitors, but belong to the same parent company. This provides the opportunity to increase store sales by interfacing park operations, which manages visitor flows by setting schedules and capacity of attractions, with the store-level merchandising process, which determines which and how much product to order. Motivated by a study at Universal Studios Hollywood (USH), we develop a flow management model to link park operations with store-level merchandising. This model sets the capacities and schedules of the major attractions to increase visitor flows to high-profit retail areas subject to visitor satisfaction, capacity, scheduling, and flow-balance constraints. In addition, this model serves as an important tool to generate and evaluate various strategies aimed at increasing theme park profitability at USH.