For my project, I ran Coffee-Roma, a coffee shop located in the business district of a large city. My simulation ran for 60 days. Over this timeframe, I hired 7 employees and earned gross revenues of $89,984.20. From those revenues, my net profit totaled $14,046.83. Below are the details of how I attempted to best run my business.
What adjustments did you make to try and improve performance?
The primary adjustments that I made to improve performance included proper staffing procedures and inventory control procedures.
With respect to staffing, I found that I initially had trouble serving customers quickly enough during peak hours. Customers dissatisfied with their queue times often left the store, resulting in lost sales.…show more content… In addition to these cost savings, I also found it beneficial to concentrate most of business with one main supplier. By doing so, I was able to increase my credit limit with that supplier and better manage my cash flow.
My employee training and advertising measures were tailored toward increasing revenues. In contrast, my actions in closing for the weekend and taking advantage of supplier discounts were tailored toward cost savings.
Pertaining to any adjustments related to cost savings, was it changes to variable costs, fixed costs, or both? Give specifics.
With respect to supplier discounts, those adjustments were related to variable cost savings. Generally, those variable cost savings would be best described as savings related to cost of goods sold.
My inventory control procedures produced both variable and fixed cost savings. As with the supplier discounts, the inventory control procedures produced cost savings in terms of overall spending with cost of goods sold. Put simply, the less inventory I lost to waste, the more variable cost savings I experienced. In addition, I experienced shipping cost savings. Shipping costs were themselves mixed costs, involving both fixed and variable components. By using the longer shipping windows, I was able to reduce the fixed component of the shipping cost. For example, my main supplier offered five-day
