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Nov 24, 2024

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1 Demand Management Plan Student’s Name Professor Course Institution Date

2 Table of Contents Demand Forecasting and Advertising Impact ........................................................................................ 2 Interpretation Using Linear Graph .......................................................................................................... 4 Inventory Management Analysis ............................................................................................................. 6 Business Scheduling ................................................................................................................................. 8 References ............................................................................................................................................... 12

3 Demand Management Plan Making suggestions and examining board demands are included in this activity, which supports dealing with improvement for an organization's effective opening of a second location. A short breakfast and lunch menu, a small supper menu, and various coffee items are available at the locally-owned Wild Dog Coffee Company. As the business owner of Wild Dog Espresso Company, preparing to create a second location while the company is financially successful is on top of the list. The board would want to develop an inspection and proposals for requests for the board, including determining, stocking, and booking for the current area, to improve the model before opening the next zone. Demand Forecasting and Advertising Impact Different Wild Dog Coffee Company stakeholders in charge of the company's marketing and sales believe that public relations expenditures have an impact on the availability of espresso drinks. Contrary, promotion can significantly impact the development of both small and large enterprises. According to Hackley & Rungpaka (2021), there are numerous ways for a firm to advertise, including TV, radio, periodicals, and message boards. Hackley & Rungpaka (2021), also denote that advertising serves various functions, including informing consumers about new goods or services and boosting business activity. The following information on the costs associated with advertising for the expresso beans used each month will assist in determining whether or not advertising is beneficial for the firm, even though the owners question the impact of advertising. From the figure, it is evident that advertising has positive impacts on the quantity sold as the higher the advertising costs, the higher the quantity sold. For example, at 987 Lbs advertising cost was $1050. However, an increase in the advertising cost to $1500 increases the

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4 Lbs to 1412. A further increase in Lbs consumed is thus expected with an increase in advertising cost. Table 1 Lbs/Beans Advertising Dollars (x) ($) 1 987 1050 2 1412 1500 3 1020 1000 4 1140 1250 5 1322 1500 6 1399 1500 As indicated in the table, advertising plays a critical role in affecting product sales by firms in all economic sectors. Firstly, advertising is a strategy for building brand recognition and ensuring that prospective customers are aware of a product's existence. Additionally, through advertising, credibility, and trust are established, which are essential for customer decision- making. Also, effective advertising campaigns can draw attention to the characteristics, advantages, and special selling points of a product, influencing consumers to pick one brand over rivals (Danaher, 2021). Furthermore, advertising can heighten interest and desire for a product, increasing demand and sales. Moreover, consistent marketing initiatives maintain brand recognition in the marketplace and guarantee that items stay at the top of consumers' minds, which is crucial in competitive marketplaces for increased purchases (Arshada & Aslam, 2015). This scenario is well exemplified in the table in months 5 and 6 where customers are aware of the product thus advertising will make little or no difference. Therefore, advertising increases not only short-term revenue but also long-term brand performance by cultivating and maintaining client loyalty.

5 Interpretation Using Linear Graph To illustrate or forecast the relationship between two variables, linear regression models are used. The dependent variable is the one being studied or predicted, whereas the independent variable is the one being utilized to predict the value of the dependent variable (Andrade, 2021). We can distinguish between the two variables being used to analyze the influence of advertising after looking at Figures 2 and 3 below. The predicting algorithm reveals that while the utilization of espresso beans was 1,050 in month one, it increased to 1,500 in month two. The linear model demonstrates that the amount of espresso beans consumed decreases to 1,000 in month three. This model shows us the expenses in Month Lbs./Beans (y)/Advertising Dollars (x) as well as the company's current production of espresso beans. It is evident from the linear graph that when the budget varies for any reason, the quantity of espresso beans utilized likewise changes at the same rate. For example, if the advertising budget increases to $2,000.00 per day, the coffee shop will have to utilize more espresso beans to create drinks. However, a thorough examination of the two graphs indicates an almost similar pattern. This graph shows that an increase in advertising cost leads to an increase in Lbs of beans consumed. For example, in month one, the company uses $1050 for advertising and has 987 Lbs of beans consumption. However, an increase to $1500 in month 2 leads to an increase in Lbs of beans consumption from 987 to 1412. Months 5 and 6 show similar cost utilization in advertising but different Lbs beans consumption. The quantity consumed also differs from month 2 which also has a $1500 advertising cost. This variation in months 5 and 6 may indicate the product is well known to customers and that increased product promotion may have less or no impact on purchases. To increase consumption in such a case, the organization can vary its product promotion strategy or ensure product differentiation to attract more customers.

6 Figure 1 month 1 Month 2 Month 3 Month 4 Month 5 Month 6 0 200 400 600 800 1000 1200 1400 1600 Linear Graph for Lbs/Beans (y) & Advertising Dollars (x) Lbs/Beans Column1 On average, the business must use the Wild Dog Coffee Business Information to determine how many espresso drinks are needed for preparation. First off, it is well known that roughly 30 espresso drinks are produced per hour, using each 1.5 ounces of espresso beans. Except for Christmas Day, the coffee shop is open every day from 6:00 a.m. until 8:00 p.m. The projected daily requirement of 420 espresso beverages is determined by multiplying the total daily operation hours, or 14 hours, by the average number of espresso drinks produced per hour. The daily consumption of espresso beans is calculated by multiplying this amount by 1.5 ounces, which yields a result of 630 ounces. However, establishing the daily demand for espresso beans in pounds is essential. To convert from ounces to pounds, we divide 630 by 16, which yields an average daily demand of 39.375 pounds of espresso beans. The allocation of advertising expenditures significantly affects the demand for espresso beans since advertising costs frequently exceed coffee bean

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7 consumption. Because greater advertising expenditures result in increased beverage output, which necessitates more coffee beans, higher advertising expenses are therefore a good indicator of the quantity of espresso beans required in this situation. Inventory Management Analysis Inventory control is crucial because Wild Dog Coffee is a small business. A large inventory cannot be completed because of the shop's tiny size and limited storage space. Despite a monthly demand of 1,400 pounds for espresso beans, there is just one type of espresso bean available. If the company ran out, it would be essential to temporarily close the shop while awaiting the arrival of the next shipment of coffee beans. The possibility of losing clients if the store must close makes this a very risky situation for the company. It is important to remember that espresso beans are shipped in 25-pound bundles for a price of $9.00 per pound. The corporation should make sure to place an order worth $250 or more to avoid being charged $19.95 for delivery because that fee might be utilized to purchase since shipping is free for any sale over $250. Using the bulk shipping technique and inventory cycle counting are two inventory management strategies that might be employed in this situation or to avoid one altogether, according to the information provided. Both of these approaches have advantages and disadvantages, but they are mostly advantageous to the business. Because it comes with a discount as opposed to when you buy a product separately, when you utilize the bulk shipment method, you may always save money. Bulk shipment is a practice used in the market for goods with large consumer demand, which applies in this instance. The maximum potential for profitability, fewer shipments mean reduced or no shipping expenses, and convenience for the company are some benefits of bulk shipment (Burrows, 2020). Cons include the largest potential level of capital risk, rising storage

8 holding fees, and budgetary restrictions. This company has adequate storage room to buy a bulk or two at once to avoid problems with back orders or running out of products. When acquiring bulk shipments, there are sometimes organizations who define a bulk to be a total of 10 or more. The corporation must always have adequate inventory on hand to create beverages since demand will rise. Inventory cycle counting is a second strategy that requires a small portion of inventory to be counted on a given day rather than a full manual stock take. Due to the Wild Dog Coffee Company's tiny size and high cost of conducting a large inventory, this is both practical and acceptable. It would not be expensive to do inventory cycle counting and only take a few hours out of the week or month to sample products and see how closely the company's inventory records correspond to actual stock. This approach has advantages and disadvantages, but many organizations use it as part of their inventory management procedures since it ultimately ensures that customers can receive timely receive products while minimizing the costs associated with inventory holding (Kunz, 2022). In addition, inventory cycle counting can be done without disrupting operations, is more time and cost-effective than performing a thorough inventory, and keeps inventory holding costs down. The strategy cons include time consumption and being less thorough and precise than a complete stock take. Even though there are only two techniques, inventory management could use other approaches or perform trial and error to test the suitability of a particular strategy. Therefore, more espresso beans consumption will indicate more sales revenue with demand increasing at a standard deviation of 1.84 pounds daily. Business Scheduling Through the schedule management process, business employees' work schedules are created, maintained, and collaboratively planned (Joubert, 2021). Organization staff should be

9 positioned to create a good staff management timetable depending on demand to boost revenue while spending less. Part-time workers often work 20 hours per week, compared to full-time employees who typically work for 40 hours. The amount of time and a half of their regular pay will be paid to those who work overtime (over and above their regular hours). Wild Dog Coffee Company now employs one full-time barista, three part-time baristas, and one full-time, two part-time non-baristas. Each additional employee costs $500 to hire, but each employee termination costs $250. Including the two extra hours they are open daily for opening and closing activities, the store is open 84 hours a week. Shifts have been planned based on the company's convenience. To produce a coffee beverage, two people are needed. In addition, the beverage is being made while one person takes the customer's order. Two potential staffing situations are examined in the charts below; Staffing Scenario 1 Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total (hours) FT Non barista (8 hrs) FT Non barista (8 hrs) FT Non barista (8 hrs) FT Non barista (8 hrs) FT Non barista (8 hrs) 40 FT Barista (14 hrs) FT Barista (14 hrs) FT Barista (14 hrs) 42 PT 1 Barista (14 hrs) PT 1 Barista (4.67 hrs) 18.67 PT 2 Barista (14 hrs) PT 2 Barista (4.67 hrs) 18.67 PT 1 NonBarist a (7 hrs) PT 1 NonBarist a (7 hrs) PT 1 NonBarist a (7 hrs) PT 1 NonBarista (7 hrs) PT 1 NonBarista (7 hrs) 26 PT 2 NonBarist a (7 hrs) PT 2 NonBarist a (7 hrs) PT 2 NonBarista (6 hrs) PT 2 NonBarista (6 hrs) 26 $322 $322 $346 $292.14 $346 $346 $346 190.01 (hrs)

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10 Staffing Scenario 2 Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total (hours) FT Barista (8 hrs) FT Barista (8 hrs) FT Barista (8 hrs) FT Barista (8 hrs) 40 FT nonBarista (6 hrs) FT nonBarista (8 hrs) FT nonBarist a (8 hrs) FT nonBarista (8 hrs) 38 PT Barista 1 (4hrs) PT Barista 1 (4hrs) PT Barista 1 (4hrs) PT Barista 1 (4hrs) 20 PT Nonbarist a 1 (4hrs) PT Nonbarista 1 (4hrs) PT Nonbarista 1 (4hrs) PT Nonbarista 1 (4hrs) 20 PT Nonbarist a 2 (4 hrs) PT Nonbarista 2 (4hrs) 8 PT Barista 2 (4 hrs) PT Barista 2 (4 hrs) PT Barista 2 (4 hrs) 12 (138hrs) While there are benefits and drawbacks to each scenario, some of the first scenario's advantages include that almost every employee will meet their goal of working 40 or more hours per week. Additionally, this scenario allows the employees to have two or more days off per week. Also, two or more employees working together each day is helpful during peak hours. On the other hand, the negatives are the expense of paying employees overtime and the schedule's overstaffing. The second option for staffing is less time-consuming. Fewer employees are scheduled to work each day, fewer overtime hours, fewer hours worked per employee while maintaining the same open-to-shut business hours, and numerous days off during the week are some advantages of this staffing scenario. Additionally, this scenario emphasizes peak days when more employees are assigned to work. This scenario however has some drawbacks. For example,

11 employees may be dissatisfied with the fewer hours they are working than they would want, and it might take longer to deliver drinks orders. In addition, some of the employees such as the full-time barista have to work overtime on some days of the week. Increased working hours can negatively affect their productivity and increase employee burnout which can cause errors and increased employee turnover rates (Peart, 2019). To ease pressure on those working overtime, the staffing schedule can allocate some working time to part-time employees which may help improve productivity and efficiency by reducing errors that may result from burnout and stress. Furthermore, employing more employees would also help improve efficiency. However, increased employees would lead to increased employee expense thus less profit generation. The aforementioned staff scenario examines each employee's daily and weekly staffing costs as well as the hours spent by each. Whether working full- or part-time, baristas are compensated at the same rate of $14 per hour. 3 part-time baristas and 1 full-time barista are employed by Wild Dog Coffee Company. In the second scenario, the company prioritizes peak days to assign work to employees. The organization estimates that Friday, Saturday, and Sunday are the peak days in a weak. During this period, the organization assigns more employees and issues their days off during weak days to reduce burnout and workplace stress. For example, on a Saturday, the organization will have PT Barista 2 working for 4 hours, PT Nonbarista 1 working for 4 hours, PT Barista 1 also working for 4 hours, and a FT Barista working for 8 hours. These employees will be positioned to effectively meet customer demands without delays. With increased demand, the company may shift a schedule to accommodate another employee or employ a new one to match the rising demand. However, hiring new employees would indicate increased expenses thus it is easier to accommodate existing ones. Based on the two staffing scheduling scenarios, scenario 2

12 is the most effective because employees work for a set period or less. Working for a set period reduces errors that may arise due to tiredness. Additionally, the organization can maximize on utility in scenario 2 compared to one. In scenario 2, more employees are utilized during peak hours indicating more customers are served hence increased returns.

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13 References Andrade, C. (2021). A Student’s Guide to the Classification and Operationalization of Variables in the Conceptualization and Design of a Clinical Study: Part 1. Indian Journal of Psychological Medicine , 43 (2), 177–179. Sagepub. https://doi.org/10.1177/0253717621994334 . Arshada, M. S., & Aslam, T. (2015). The Impact of Advertisement on Consumer’s Purchase Intentions. SSRN Electronic Journal . https://doi.org/10.2139/ssrn.2636927 . Burrows, S. (2020). In a Nutshell: The Benefits of Bulk Shipping . Shiphawk.com. https://shiphawk.com/bulk-shipping-benefits . Danaher, P., J. (2021). Advertising Effectiveness, Impact at JMR , (January), Available at: https://www.ama.org/2021/01/26/advertising-effectiveness/ Hackley, C., & Rungpaka A., H. (2021). Advertising and Promotion . SAGE. https://www.researchgate.net/publication/322164885_Advertising_and_Promotion_4th_E dition_2018 . Joubert, S. (2021, June 2). How to Create a Schedule Management Plan in 6 Steps . Graduate Blog. https://graduate.northeastern.edu/resources/schedule-management-plan/ . Kunz, B. (2022, February 23). What is Inventory Cycle Counting?: A 2022 Guide . Business.org. https://www.business.org/finance/inventory-management/what-is-inventory-cycle- counting/#:~:text=Inventory%20cycle%20counting%20is%20a%20method%20of %20ensuring . Peart, N. (2019, November 5). Making Work Less Stressful and More Engaging for Your Employees . Harvard Business Review. https://hbr.org/2019/11/making-work-less- stressful-and-more-engaging-for-your-employees .

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