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Tommy & Mona Foods (TMF) sells freshly made panini, Italian sandwiches toasted on a special grill known as a panini press. The owners, Tommy
Tommy & Mona Foods (TMF) sells freshly made panini, Italian sandwiches toasted on a special grill known as a panini press. The owners, Tommy and Mona are the only workers in the shop. Their process for making a panino is as follows: Tommy takes the order; this usually takes 2 minutes. The order is given to Mona who first prepares the bread, which usually takes 1 minute. Next she adds cheese and vegetable to the sandwich. This takes another minute. Tommy then takes over, adding ham or other meats depending on the order. This step usually takes Tommy 2 minutes. He then oils one of TMF's two panini presses and places the sandwich in the press (this step takes another minute). The panino then cooks in the press for 5 minutes. Each press can cook only one sandwich at a time. Finally, Mona serves the panino (which takes a negligible amount of time) to the customer and takes the customer's payment. Handling the payment takes 1 minute. The process flow chart for TMF is provided below: Take order +A+ 2 mins Tom Prep. bread 1min Mona cheese & veggies Answer the following questions: 1min Mona +A+ Add meat 2mins Tom Oil press & place sand. 1min Tom+Oven Panini Cooks 5min Oven Serve & take payment 1min Mona b) Tommy believes that the process would be more efficient if TMF partially prepared the most popular sandwiches before opening the shop. They could then simply toast these sandwiches to order. The process for finishing these pre-assembled sandwiches would be as follows: When a customer asks for a pre-assembled sandwich, the first step would be for Tommy to oil a panini press and place the sandwich in the press. This will take him 1 minute. As before, it will take 5 minute to grill the panino. Finally, Mona would serve the final order and take the cash from the customer. As before, this will take 1 minute. To drive demand for the pre-assembled panini, Tommy argues that they should sell for $2 less than custom-made sandwiches. With this discount, he expects that 50% of customers would opt for pre-assembled sandwiches. However 50% customer would still want a custom order. Assume that there is sufficient demand and the process runs at capacity. Also, the cost of ingredients is same for both sandwiches. If TMF offers a $2 discount on the pre-assembled sandwiches, what would TMF's hourly profit be? Hourly profit would be $ per hour.
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