User:Asongscout/economics

David Macdonald, Period 1

Analysis:

I have listed all the profits that each restaurant would make if they sold their food at a particular price.

The “Best Price” row indicates what price is the most profitable.

The “# of Buyers” row indicates how many students wanted to pay for that meal at that price.

The “Profit Daily” row is how much money the business would make daily.

The “4 years” row is how much money the business would make over the course of the 4 year contract (based on the math of 4 x 180 school days a year).

The “School Profit” row is how much money the Student Council would receive (they get 20% of the profits).

The “Rank” row displays which businesses are the most profitable on the surface.

The “Ghost Profit” row displays hidden benefits.

Rita Rice’s personal advice says that we should choose Wildcat’s Den because it is run by students and will give them job experience, plus the profits go to help the careers class at the school. I agree.

The Parent Teacher Association is disgusted with some of the restaurant’s unhealthy offerings and says we should include only nutritionally healthy options, essentially forcing the kids to eat wholesome and healthy. I don’t think it’s realistic to fully meet their demands.

The Gourmet Club is disgusted with some of the restaurant’s rather plain-tasting offerings and says we should include the Roastery and Fleur De Ly’s because they taste really good. They say they’d be willing to pay higher prices for better food, and they also remind us that most of their parents are members of the Boosters Club which funds numerous school activities (including a trip for the student council to Washington D.C.). It is tough to ignore their demands but I think we have to, I’ll get deeper into this further down.

The Vegetarians want a meat-free option, which would be Veggie Vittles. They also don’t want Hunan Wok or Taco Villa because those locations aren’t environmentally friendly. I think we can meet them at least halfway and include Veggie Vittles, because in this imaginary world it’s a closed campus and bringing a lunch from home is not an option, so we have to include an option for everyone.

The School Counselor points out that while they won’t admit it, many kids can’t afford high prices. She suggested the Home Economics Kitchen because it’s cheap and affordable. I fully agree with her request.

Mrs. Stravinsky is a very interesting case. She is extremely rich and has funded the building of most of the school, and wants to stay involved through the Borsch Palace by serving her homeland food. She is expected to help fund a swimming pool and tennis courts, which are quite expensive.

Our goal is to choose restaurants that will 1) give us a profit, 2) provide tasty/healthy/cheap/beneficial lunch options for the students.

Analysis of the restaurants, in order of rank…

Hunan Wok, Taco Villa, Pizza Place and Bennie’s are all fast food chain restaurants that will make far more raw profits than any other restaurant, for an obvious reason – a huge number of teenagers like this sort of food. We’d want to include at least one of them not only because it’ll make us huge amounts of cash, it would also satisfy more teenagers than any other option. The PTA hates them all because they’re unhealthy chains restaurants. Vegetarians hate Hunan Wok and Taco Villa, but Hunan Wok is twice as profitable as all the others. My personal vote would be for Hunan Wok because it would make us money; it’s by far the most popular restaurant amongst teenagers, and it’ll only offend the PTA and a few vegetarians. (Not that I don’t disvalue the PTA and vegetarians opinions, but the majority opinion has the louder, more influential voice in this area.)

Wildcat’s Den is a definite yes in my opinion. It makes a decent amount of profit for the student council and has huge benefits for the school.

Home Economics Kitchen is another definite yes in my opinion. It provides lunches for low income families, it’s healthy (to appease the PTA for including Hunan Wok), it’s actually profitable due to low fixed costs and it has benefits for the school.

Veggie Vittles is another yes in my opinion. It’s healthy (to appease the PTA), it’s vegetarian (to appease the vegetarians), and it produces a (very small) amount of profits.

Bubba’s simply does not make enough money, and the fact that it has no extra benefits eliminates it from consideration in my opinion.

The Roastery and Fleur de Lys are both fairly popular amongst the student body since they are tasty, but only at a very low price. This is a problem since the Roastery and Fleur de Lys have the most expensive production costs. As a result, the Roastery and Fleur are doomed to lose money in the long run. Not only would this not give us any profit, they wouldn’t be economically sound businesses. Their managers would have to be complete idiots to sign our 4-year contract. If they did, they’d try to minimize losses by selling at the best (or least worst) price – which is shown on the chart to be very high, so that only a few rich kids would be eating there every day. It wouldn’t feed or satisfy much of our student body or bring us money. Both of them are nixed in my opinion.

So that’s 4 restaurants I would pick so far: Hunan Wok, Wildcat’s Den, Home Economics Kitchen, and Veggie Vittles. So what about the last one? I see it as coming down to a decision between another big fast-food money maker and the Borsch Palace.

Borsch Palace pros: It would satisfy Mrs. Stravinsky, and she would most likely donate to making the pools and tennis courts which are very expensive and might cost more than the profits. If we were willing to waste a spot in the food court on borsch, we could get other non-culinary benefits for the students. And since Mrs. Stravinsky is super wealthy, having her restaurant be 5 grand in the red every year shouldn’t be an issue for her (she even stated that making money is not her goal).

Borsch Palace cons: It’s a gamble. The money isn’t guaranteed. Mrs. Stravinsky could die, or choose not to donate. And let’s face it – practically nobody likes borsch. Satisfying one person (Mrs. Stravinsky) might not outweigh satisfying hundreds of students. And hey – maybe Mrs. Stravinsky would donate the money anyway even if she didn’t get her way.

Benny’s/Pizza place pros: Guaranteed money. Popular amongst teenagers. A more sound economic decision.

Benny’s/Pizza place cons: The PTA won’t like it. We could be missing out on gifts from Mrs. Stravinsky’s magical bank account.

My final pick would be Hunan Wok, Pizza Place, Veggie Vittles, Home Economics Kitchen, and Wildcat’s Den. Do you agree/disagree with me on anything? Let me know!