7_COQ - Barry's Burger Shack template 0809 MSA

7_COQ - Barry's Burger Shack template 0809 MSA - Barry's...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Barry's Burger Shack Barry's Burger Shack operates a single location in Babson Park selling burgers, fries and sodas to Babson and Wellesley students. Revenues for 2006 were $90,000 with profits of $2,250; industry benchmarks suggest profit margins should be close to 10% of revenue. Barry had noticed an increasing number of complaints from customers over the quality of his burgers and the messiness of the soda self service area and has hired you to estimate the cost of quality for his burger business. Your analysis identified the following broad categories of quality costs in 2006: 1 One in 30 customers returned their burgers for a replacement due to burger being too greasy, being served too cool, or served with wrong ingredients; cost to replace was ~$1,600 per year 2 Approximately 5% of burgers have to be scrapped during preparation process at an estimated cost of about $1,200 per year; fries scrap cost about $600 per year 3 Barry uses a mystery shopper service to evaluate employee performance at an annual cost
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/08/2011 for the course MA 827 taught by Professor Wain during the Summer '11 term at BC.

Ask a homework question - tutors are online