Discussion of the problem
Sanjay Thomas, a second-year MBA student at M.I.T. Sloan School of Management has three choices after he graduates. The first one is an excellent job offer that he received from a top-flight management consulting firm. The second option is to open an upscale restaurant that will serve Indian gourmet cuisine. The third option is to open the restaurant with his aunt. Each option has positive and negative aspects, but when Sanjay compares them only the financial benefits are relevant.
If Sanjay takes the job offered by the management consulting firm he would earn a salary of $80,000 a year. If he decides to open the restaurant, he would face a different scenario. To figure out Sanjay’s salary he would have to take into account three variables: number of meals sold, revenue per meal, and labor cost. If Sanjay opens the restaurant in partnership with his aunt, she would guarantee him a salary of at least $3,500 a month, and in return she would get 90% of all monthly earnings in excess of $9,000.
Data Analysis
Sanjay estimated the following statistics for the variables that affect the expected salary at the restaurant. First, the number of meals obeys a normal distribution with a mean of 3,000 and a standard deviation of 1,000. Second, the revenue per meals is $20.00 with a probability of 25%, $18.50 with a probability of 35%, $16.50 with a probability of 30%, and $15.00 with a probability of 10%. Third, the labor cost follows a continuous uniform distribution between $5,040 and $6,860. He also estimates that there are two fixed costs. One is the fixed cost per meal of $11 and the other one is non labor cost of $3,995.
All these variables and fixed costs were used in a simulation software package to forecast the expected salary on the restaurant for the two situations: one running the restaurant by alone, and the other one, running it with his aunt. Each simulation consisted of 10,000 trials.
The result of Sanjay running the restaurant alone is represented in Graph A. With a mean of $10,845 and standard deviation of $8,568 (Table 1), this option shows that the expected salary would be higher than the $6,666 monthly salary that he would earn in the consulting firm ($80,000/ 12). At the same time, the standard deviation projects a high variability on the expected salary, which means that there is the potential of earning more money than at the firm and of losing money running the business.
Stephen Boos has worked in the food service industry for over 30 years. He started as a bus person and subsequently trained as a chef’s apprentice. Steve’s mother believed that a college education was something that everyone should receive. She felt that a college degree was a good investment in Steve’s future. In 1976 at his mother’s insistence, Boos moved to Northeastern Ohio to attend Kent State University where he earned a bachelor’s degree in business administration. After graduation, Steve began working for East Park Restaurant as a line cook. Using his education as a foundation, Steve made a point to learn everything he could about running a restaurant, from cutting meat to the bi-weekly food and beverage orders. His versatility, keen business sense, and ability to control costs resulted in Steve’s promotion to General Manager, as role he has held since 1995.
Fixed costs of $100,000 plus the variable costs of $60,000 will give us $160,000 in total expenses. The gross ticket sales of $660,000 minus the total expenses of $160,000 give us a yearly net income of $500,000. The new lift has an economic life of 20 years and we would like to make 14% on our investment. The NPV factor of 14% at 20 years is 6.6231. By multiplying our net yearly income or our annuity of $500,000 times the NPV factor of 6.6231 we will have a NPV of $3,311,550.
What's risky about Jobs A and B is that they both require Armstrong to contribute personal funds which he may end up losing. Alternatively, if he does invest this money, there is a chance that his gamble pays off and the job becomes very profitable. When faced with Job C, not only does it provide Armstrong with nearly no risk because he is not required to invest any personal funds, but it also pleases his family because there is high job security. However, this job also provides Armstrong with the least personal satisfaction.
If you are interested in a management career in hospitality industry it is good to research the management position that you may be interested in. Find out what the different positions are is a good way to start your research. The two different industries within the hospitality industry are the Hotel and Lodging industry and the Restaurant industry. The different top management position in the Hotel and Lodging are: General Manager, Director of Human Resources, Director of Food and beverage, Director of Rooms Division, Director of Sales and Marketing, Director of Engineering, Director of Accounting. The different top management for the restaurant industry are: General Manager, Kitchen Manager, Bar Manager, and Dining Room Manager.
Total retail (users+non-users)MM $65.98 $39.68 Total factory sales (2/3 of retail)MM $43.99 $26.45 NRFC hurdle (factory sales)MM $45 $45 ? Pizza kit and topping: 43.99 MM, reach company's projected factory sales of 45MM ? Pizza kit only: 26.45 MM, Fail to reach company's projected factory sales of 45MM Exhibit 2 Sensitivity analysis Change in penetration rate Change in pizza sales Percentage change in pizza sales 25% to 15% - 7.11M
The. Read "4 Quotes From Gurbaksh Chahal That Will Set You Up For Success. " Under 30 CEO. N.p., n.d. Web. The Web.
Our team has been instructed to help advise on a business case involving a restaurant, The Mongolian Grill. It’s owner, John Butkus, is contemplating renovations, in hopes of adding capacity and increasing revenue. There are several scenarios that are available to him. One option is to add an extra food bar. The second option is to move the location of the cooking area. He can also implement both options, if he so chooses. Our team has done the appropriate financial calculations, as well as qualitative considerations.
The cafeteria serves about one hundred and fifty residents of Cambridge Hall and approximately one hundred residents from Nottingham Hall. The cafeteria serves hot foods, salads, snacks, sandwiches, and beverages. The data has given me information on the percentage of customers that preferred a hot meal (interactive and precooked) to snacks, the ratio of customers that prefer precooked hot meals over an interactive hot meal, line formation, service times at the different stations, arrival times and the location of the different stations. I also learned that the peak hours of operations are from 5:00 p.m. to 6:30 p.m. and that the cafeteria has two cash registers available but only one is being utilized during the peak hours. If customers decide on a hot meal there is a 2 to 1 ratio that customers will purchase a precooked meal over an interactive meal. Through an informal customer survey, reasonable waiting times were established for the precooked line (5 minutes), the interactive line (10 minutes), and the cashier payment line (1minute).
The world has become so fast paced that everything is rushed. Almost every aspect of life has become industrialized. Food and the way it is prepared is no exception to this world that always appears to be in fast forward. The fast food industry has revolutionized how and what people eat. The public has begun to consume more fast food and the problem is that people do not know what they are eating. If the concept of a nutritious meal is thrown out the window for the convenience of fast food then the health risks will outnumber any pros in favor of that cheeseburger.
Profit is the aim of any business organisation. Their efficiency to perform profit maximization strongly depends on their internal organisational structure. There are several types of business organisation, each one of them with unique legal status. We have been requested to comment on the decision of two physical persons, Nikos and Konstantinos, to form a general partnership for the provision of catering services. Pursuant to that and in the following paragraphs, we shall analyse the general partnership; state the main differences between a general partnership and limited liability partnership. In addition, we shall apply the general partnership characteristics on the case study provided.
This book is intended as reference book for courses in Entrepreneurship. There are not many books on becoming an entrepreneur in India & this book certainly tries to fill that vacuum. The book guides how to be your own boss. The book is structured along 20 key questions that an entrepreneur is supposed to encounter. In 20 simple and easy steps, the author tells us all that we need to know before starting a business. The book answers all possible questions in these 20 steps.—Why do you want to become an entrepreneur?, Where do you get your ideas from?, How to raise money? How to make your business plan? How to choose your co-founders? How to use the social media for your benefit? What is the need for a mentor, and where to find one? How to hire a good team? The bo...
Planning is important through the whole business. One of the reasons that some restaurants fail is due to lack of planning. Restaurant industry sales in the United States were projected to be $632 billion in 2012, or 4% of the U.S. gross domestic
“Conceptualizing is an integrative strategy designed to take scientific and mathematical thinking beyond the facts and singular theories to the level of the underlying concepts. Such core concepts such as linearity, change, and scale can effectively tie together algebra and geometry, physics and biology, illuminating a hidden pattern of relationships.” (Frid, 1995) When talking about the conceptualization of restaurants all these fundamentals play an important role. To scoop out all the hidden patterns and analyzing them in order to set up a working model for more stability and profitability by understanding customer needs and other influencing factors are the restaurant concepts. The role of restaurant concepts is not just the aesthetic or visual design of a restaurant but is also about pre-assessment
The first part provides reasons why starting a new business is profitable in terms of having higher or bigger possibility for growth of the business and higher rate of return. The second part highlights the originality of starting a new business as an entrepreneur. The last part mentions why starting a new business is more entrepreneurial than franchising in terms of entrepreneurial skills and
...ded once they see that the sales will be increasing and tips will be larger. Good staff will increase good public relations which will result in better business. Marketing a restaurant is the most important part in running a restaurant. If a restaurant is not marketed, no one will know about the restaurant causing it to lose money to operate forcing it to close down. Prices on the menu should always be appealing to the restaurant target market and set towards the products on the menu. It is essential that a restaurant develops its staff to the fullest, for a strong staff creates better sales and the public is pleased .