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The Bright N Early Coffee Shop sells Regular, Mocha, and Irish blends of coffee. The shop s current daily labor cost is $ 4 0
The Bright N Early Coffee Shop sells Regular, Mocha, and Irish blends of coffee. The shops current daily labor cost is $ the daily equipment cost is $ and the daily overhead cost is $ The table below shows the daily demand, along with selling prices and material costs per beverage. Coffee Product Regular Mocha Irish # drinks sold Price per beverage Materials $ per beverage $ $ $ $ $ $ Kayla Jacobson, the manager at Bright N Early Coffee Shop, would like to understand how adding Affogato an Italian coffeebased dessert that usually takes the form of a scoop of plain milkflavored or vanilla gelato or ice cream topped with a shot of hot espresso to the menu will alter the shops producvity. Based on her market research, Affogato should atract new customers without negavely impacng the current demand for the exisng products. Assuming that the new equipment is purchased before Affogato is added to the menu, Jacobson has developed new average daily demand and cost projecons. Adding the new product is expected to result in the equipment cost increasing to $ and the overhead cost increasing to $ The labor cost is not expected to change. The projected daily demands for the new product, as well as selling price and material costs per beverage for the new product line, are shown below. Coffee Product Affogato # drinks sold Price per beverage Materials $ per beverage $ $ a Calculate and comment on the change in labor and mulfactor producvity if Affogato is added to the menu. Show your calculaons. b If everything else remains unchanged, what is the minimum number of units of Affogato that would have to be sold per day to ensure that the mulfactor producvity increases from its current level. Show your calculaons illustrang this increase. c Comment on the feasibility of the number determined in part b d Describe at least two other ways that Bright N Early Coffee Shop can increase its producvity. Provide a numeric example of each showing the effect on producvity. e Based upon the data provided, would you recommend adding the new product line? Why or why not?
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