I’m trying to study for my Management course and I need some help to understand this question.
Michael Scott, a recent graduate with a degree in management, is planning to open a coffee shop on the campus of Southwestern Oklahoma State University. You will help Michael develop a production and operations business plan for the shop. Use the tools learned in your POM class to analyze the following scenarios, apply mathematical reasoning, and develop recommendations. You will present your recommendations in a formal report at the end of the semester.
Appendix A: Chapter 1 – Productivity
- Open a new Excel file and name it “Final Project Appendices – Your Name”. Create a worksheet named “Appendix A”.
- Complete the problem below as shown in examples using similar formatting.
- Insert a text box explaining your answer and recommendation.
- Name and show all variables.
- Must use Excel formulas when calculating your answers.
- Take all numbers to two decimals.
- Add a Header on the Appendix A worksheet (left – name, center- “Appendix A”, right – date)
- Submit to Canvas prior to the due date and time.
Michael is considering how many baristas he should hire in order to achieve the appropriate level of productivity given speculated demand. The coffee shop will be open between the hours of 6 am and 8 pm daily. Michael is considering whether he should have one or two baristas on duty each day. One barista would be able to produce 10 specialty drinks in an hour while managing other duties (working register, clean up, etc.). Two baristas would be able to produce a total of 25 specialty drinks in an hour. Use Single-Factor Productivity Measurement to compare Michael’s options. Calculate the percent difference in productivity between one or two baristas.
Additionally, Michael is considering whether to purchase a standard espresso machine or a deluxe espresso machine. The daily overhead expenses with the standard machine is $150 while the daily overhead for the deluxe machine is $200. Two workers could produce 25 specialty drinks per hour with the standard machine and 35 specialty drinks in an hour with the deluxe machine. The baristas are paid $8 per hour. Use multifactor productivity measurement to compare the espresso machine options. Your factors are labor hours and overhead. Compare percent change in productivity between the two options.
Demand will affect Michael’s final decision. Which options result in higher productivity? What do you recommend?