Ihe fast-foxl industry in the United States has typically used drive-through windows to increase vyofitability. With 65 per- cent of fast-food revenue derived from drive-through win. dows, these windows have focal point for market share competition among fast-foxl outlets such as Wendy's, McDonald' s. Burger King. Arbys, and Taco Bell- Even chains that did not use drive-through windows in the past. such Starbucks and Dunkin Donuts, have added them to their Production technology changes have included the use of separate kitchens for the drive-through window, timers to monitor tlr seconds it takes a customer to move from board to the pickup window. kitchen redesign to mini- mize umrcessary movenrnt, and scanners that send custom- ers a monthly bill rather than having them pay at each visit. Now, in an attempt to cut costs arui increase speed even fur- ther. McDonald' s franchises have tested remote order-taking. It takes an average of 10 seconds for a new car to pull up to a drive-through menu after one car has moved forward. With a remote call center. an crder-taker can answer a call from a different McDonalds where another customer has already pulled up. Thus, a call center worker in California may take orders from Honolulu, Gulfport. Miss and Gillette. Wyo. This means that during peak periods, a worker can take up to 95 orders per hour. The trade-offs with this increased speed at the drive-through window are employee dissatisfaction with constant mKmitoring and the stress of the process, decreases in in tilling orders. and possible breakdowns in commu- over long distances. However. this technology may be expanded to allow stores. such as Home Depot. to equip carts with speakers that customers could use to wirelessly ccMitact a call center for shopping assistance. In Asia and other parts of the world where crowded cit- ies and high real estate costs limit the construction of IJennifer Ordonez, "An Efficiency Drive: FaWFood Lames, drive-throughs, McDonald's and KFC have a'Med motorbike delivery as part of their growth strategy' Fifteen hundred of the 8,800 restaurants in McDonald's Asia/Pacific, Middle East. and Africa division offer delivery. while half of the new restaurants KFC builds in China each year will offer deliv- ery- The delivery option requires an area in the restaurant to assemble orders that are placed in battery-powered induction heating boxes. Along with cold items in insulated contain- ers, all of the orders are placed the back of yellow and red McDonald's branded motorbikes or electric scooters. Most Mcmnalds delivery orders are phoned in, but company has started offering Internet-based otdering in Singavxre and Turkey. The number of call centers may be reduced in the future as online ordering increases. Neither McDonald-s nor KFC plan to use this technology in United States, w'lwre McDonald's derives two-thirds of its sales from drive-through customers. This case illustrates how firms can use production tech- nology to influence costs, revenues, and profits. Because firms in nure competitive markets may not have much abil- ity to influence the prices of their products, they may depend more on strategies to inctease the number of customers and lower the costs of production. These strategies may involve changing the underlying production technology, lowering the prices paid for the inputs used. and changing the scale of To analyze these issues, we'll first discuss the nature of a firm's production process and the types of decisions that managers make regarding production. Well then show how a firm's costs of production are related to the underlying EYO- duction technology_ Because the time frame affects a man- agers decisions about production and cost. we distinguish between the short run and the long run and discuss the impli- cations of these time frames for managerial decision making. This chapter focuses on short-run production and cost deci- sions. while we analyze production and cost in the long run later (Chapter 6).