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00:22Biz Cafe Decisions1.0Beginning DecisionsBought Modern new furniture, $4000Bought AutoFour High Capacity coffee maker, $6000Management Decisions2 managers at $650 a weekHired 10 servers at $9 an hourMarketing DecisionsPrice—$4 a cupNewspaper ($200 a day) General Awareness ($1400 a week)Radio ($40 a spot) 5 per day ($1400 a week)Operations DecisionsShop Hours: Mon-Fri 7-10Weekly Purchases: Coffee—35 lbs organic ($245), 5000 medium cups ($450)Special Purchased insurance ($600)Decision Analysis
Service Capacity—1.2 servers per hour, 300 daily capacity, 1500 weekly capacityProjected sales—$4412, projected expenses—$7910Breakeven—1536 cupsProjected coffee required—35.3 lbsLocal AveragesManager wages—$600 a weekAverage staff wages—$8.75 an hourAverage turnover rate—12.5%Minimum wage—$7.25 an hour2.1ResultsCoffee purchase was just right3897 cups left in inventoryCustomer satisfaction—33.3%Revenue—$4412Net income—$(3000.5)Management DecisionsNo changesMarketing DecisionsNo changesOperations Decisions
Weekly purchases: Coffee—40 lbs organic ($280)Special Customer Survey: Data from the standard customer survey is very limited, showing only the customer satisfaction rate. It would be a good idea to obtain more information about your customers and how they rate your café. Below are some options for obtaining additional customer feedback.Add a suggestion box in the café. ($0)Print survey forms and place them on café tables. Customers will rate their satisfaction with ambiance, quality of service, and price in your café. ($50)Hire a company to survey local public (customers and non-customers) for ratings on the items listed in the printed survey, plus ratings for satisfaction with café hours, and general awareness of your café. ($500)No change. ($0)I decided on the print survey. ($50)Decision AnalysisService Capacity—1.2 servers an hour, 435 daily, 2175 weeklyProjected sales—$5688 (1422 cups), projected expenses—$4,945Breakeven—1535 cupsProjected coffee required—45.5 lbsMaterials reportCost per cup (for cups)—$0.09Cost per cup (for coffee)—$0.22No wasteLocal AveragesManager wages—$625 a weekAverage staff wages—$8.88 an hourAverage turnover rate—11.7%
Minimum wage—$7.25Industry average customers satisfied—51.7%3.2ResultsHad to make emergency purchase of 6 lbs of coffee2475 cups left in inventoryRevenue—$5688 (+28.9%), gross margin—$5232 (+28.6%), Net income (for period)—$113.8 (+103.8%), Net income (total)—$(2886.75)Management DecisionsHired 1 managerHired 3 serversMarketing DecisionsChanged price of coffee to $3.90 a cupOperations DecisionsChanged Shop Hours to Mon-Fri 7-10, Sat 7-11, Sun 7-10Weekly purchases: Coffee—62 lbs organic ($434), 5000 cups ($450)Special Staff Training: Mistakes made by staff are having an effect on overall efficiency, so you have contacted the local community college to enquire about customer service training courses. They offer a one-time customer service course that will train existing employees at a cost of $50 per employee. They also offer an on-going training program that can train existing and future employees at a cost of $1200 per year. Will you sign up