Case Study– Requirements. Speedy Burger is a small regional hamburger chain that has 10 stores in Oregon. Recent state legislation has promised to raise the minimum wage from $10 to $15 per hour over the next two years. In addition, there is a serious shortage of labor in the Oregon market at this time. Knowing that their business has marginal returns, the owner, Jason Wilson, decides to investigate the incorporation of a robotics system to reduce his labor costs. Currently, each store employs about 30 part time hourly workers and 3 full-time salaried managers. Speedy Burger stores are open from 10:30am to 10:30pm Monday through Saturday for a total of 72 hours each week. Usually, the store requires 3 cooks, 2 order takers and a worker that gets drinks and assembles meals. Speedy Burger is considering a major change that would have customers order their food through a kiosk system. This is simplified because Speedy Burger has a reductionist menu that consists of hamburgers, fries, sodas (pop) and shakes (only chocolate and vanilla). Jason is visualizing a kiosk that lets customers pick pictures of either a hamburger or cheeseburger, and the condiments that can be included (ketchup, mustard, pickles, onions, lettuce or tomatoes. Then they can touch any combination of soda (coke products), water or shake. The order system will then accept the customers cash or credit cards for payment. On the kitchen side, orders will show up on a display for the cooks, and the assembler will use a touch screen to show which orders have been completed. The system will also provide analytics that show order information, order turn-around time, and also predict supply requirements and keep track of food inventory. Jason believes that this system will eliminate the need for the two order takers as the manager will be able to assist customers that have any problems ordering. It is also expandable as it can also later be integrated with a robotic hamburger press. The initial cost of the kiosk system for one store is $900,000. This includes all hardware and software. In addition, there is a 15% annual maintenance fee that covers all ongoing repairs and software updates. Perform a cost-benefit analysis. Does this proposal make sense financially? Assume that Jason’s cost of working capital is 7%. Are there non-financial considerations that should be take into account when looking at this investment?
Case Study– Requirements.
Speedy Burger is a small regional hamburger chain that has 10 stores in Oregon. Recent state legislation has promised to raise the minimum wage from $10 to $15 per hour over the next two years. In addition, there is a serious shortage of labor in the Oregon market at this time. Knowing that their business has marginal returns, the owner, Jason Wilson, decides to investigate the incorporation of a robotics system to reduce his labor costs.
Currently, each store employs about 30 part time hourly workers and 3 full-time salaried managers. Speedy Burger stores are open from 10:30am to 10:30pm Monday through Saturday for a total of 72 hours each week. Usually, the store requires 3 cooks, 2 order takers and a worker that gets drinks and assembles meals.
Speedy Burger is considering a major change that would have customers order their food through a kiosk system. This is simplified because Speedy Burger has a reductionist menu that consists of hamburgers, fries, sodas (pop) and shakes (only chocolate and vanilla). Jason is visualizing a kiosk that lets customers pick pictures of either a hamburger or cheeseburger, and the condiments that can be included (ketchup, mustard, pickles, onions, lettuce or tomatoes. Then they can touch any combination of soda (coke products), water or shake. The order system will then accept the customers cash or credit cards for payment. On the kitchen side, orders will show up on a display for the cooks, and the assembler will use a touch screen to show which orders have been completed. The system will also provide analytics that show order information, order turn-around time, and also predict supply requirements and keep track of food inventory.
Jason believes that this system will eliminate the need for the two order takers as the manager will be able to assist customers that have any problems ordering. It is also expandable as it can also later be integrated with a robotic hamburger press.
The initial cost of the kiosk system for one store is $900,000. This includes all hardware and software. In addition, there is a 15% annual maintenance fee that covers all ongoing repairs and software updates.
Perform a cost-benefit analysis.
Does this proposal make sense financially? Assume that Jason’s cost of
Are there non-financial considerations that should be take into account when looking at this investment?
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