1.       What do you think is the cost of a serving of chicken and fries? Provide an explanation to Madame Rosmerta supporting your cost analysis.  Explain any assumptions included in your calculations.

2.       Make a recommendation regarding each of Madam Rosmerta’s proposed changes.  Consider each proposed change independently.You will likely need to make some additional assumptions, so be sure to outline your important assumptions and explain their effects on your recommendations. You should address the following in your recommendations:

a.       For scenario 1, what is the minimum price for which Madam Rosmerta can sell leftovers and still make a profit? Explain your recommendation to Madam Rosmerta.

b.      For scenario2, what is the expected incremental effect on monthly profit?  How many additional servings would Three Broomsticks have to sell in order for the monthly profit with the new fryer to equal the monthly profit with the current fryer? Explain your recommendation to Madam Rosmerta.

 

c.       For scenario 3, what is the expected incremental effect on monthly profit? Explain your recommendation to Madam Rosmerta.

  • 10 years ago
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