Subway Cost Analysis

702 Words3 Pages
Cost determines the amount of resources needed to produce the products necessary to fill Subway’s inventory (Schroeder, 2011). In order for the Subway chain to preserve low costs, it is necessary to continue concentrating on the quality ingredients and the healthier alternatives that draw consumers to its restaurants. All things considered, Subway has grown exceedingly aware of what its target audience craves: a healthy alternative to fast food, quality nutrition, and great value. After all, nothing exceeds the value of the “$5 Foot Long” deal, a foot-long sandwich that includes a choice of meat stacked on fresh baked bread, and piled with fresh vegetables. It may seem doubtful that Subway can profit off of these sandwiches, but the secret…show more content…
The objectives of operations are short term, measurable goals that drive an organization towards the success of achieving its long-term goals. These objectives include: quality, cost, flexibility, and delivery (Schroeder, 2011). In terms of these objectives, Subway seems to be high quality and moderately low cost. Subway retains low unit costs throughout the supply chain by reducing unnecessary deliveries, while minimizing packaging material and shipping material (Subway, 2015). However, inconsistent delivery may be negatively affected by placing too much emphasis on low costs. Several Subway locations continue to operate while understaffed, which means that the consumer’s sub is left waiting to move onto the next step in the assembly line. First, employees need to be cautious of a sandwich left waiting, as it will continue to lose quality the longer that it is stagnant. Second, a customer who has a short lunch break cannot be delayed by a shorthanded business. The inconsistent delivery can result in a negative experience for any potential consumer. Overall, Subway upholds an excellent business practice that remains cost efficient. Subway restaurants meet the demands of an increasingly health-conscious as it provides quality products at a lower cost. However, the quality food and low costs will not be enough to increase sales. If the Subway chain genuinely wants to measure up to the competition without having to raise its costs, it would be wise to consider the addition of drive-thru locations in order to boost
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