An Integrated Labor-Management System for Taco Bell

Taco Bell Corporation has approximately 6,490 company-owned, licensed, and franchised locations in 50 states and a growing international market. Worldwide yearly sales are approximately $4.6 billion. In 1988, Taco Bell introduced six core-menu items for the reduced price of 59 cents and offered free drink refills. Taco Bell has since continued to change and innovate. Its new strategy meant restructuring the business to become more efficient and cost-effective. To do this, the company relied on an integrated set of operations research models, including forecasting to predict customer arrivals, simulation to determine the optimum labor required to provide desired customer service, and optimization to schedule and allocate crew members to minimize payroll. Through 1997, these models have saved over $53 million in labor costs. T aco Bell was established in 1962 by Glenn Bell in Downey, California. By the early 1970s, Taco Bell Corporation was a booming regional chain and had gained the food service industry's attention. PepsiCo, Inc. purchased Taco Bell in 1978 and transformed it into a dynamic, international fast-food business. By the mid-1980s, it had achieved a successful steady-state position in the fast-food marketplace by delivering consistent food quality, service , and value to its customers. As is typical in the industry, operating procedures and management principles evolved as a