Restaurant Industry :: essays research papers

Discussion of the problemSanjay Thomas, a sophomore(prenominal) MBA student at M.I.T. Sloan School of Management has three choices after he graduates. The first one is an excellent job offer that he reliable from a top-flight management consulting fuddled. The second selection is to chip in an upmarket restaurant that will serve Indian gourmet cuisine. The third option is to open the restaurant with his aunt. Each option has positive and negative aspects, however when Sanjay compares them only the financial benefits are relevant.If Sanjay takes the job offered by the management consulting firm he would earn a fee of $80,000 a year. If he decides to open the restaurant, he would face a different scenario. To figure out Sanjays salary he would have to take into account three variables rate of meals sold, revenue per meal, and wear upon cost. If Sanjay opens the restaurant in partnership with his aunt, she would guarantee him a salary of at least $3,500 a month, and in return she would overprotect 90% of all monthly earnings in excess of $9,000. info Analysis Sanjay estimated the following statistics for the variables that affect the expected salary at the restaurant. First, the spot of meals obeys a normal distribution with a mean of 3,000 and a banal deflection of 1,000. Second, the revenue per meals is $20.00 with a prospect of 25%, $18.50 with a probability of 35%, $16.50 with a probability of 30%, and $15.00 with a probability of 10%. Third, the labor cost follows a continuous uniform distribution surrounded by $5,040 and $6,860. He also estimates that there are two fixed costs. nonpareil is the fixed cost per meal of $11 and the former(a) one is non labor cost of $3,995.All these variables and fixed costs were used in a simulation software package to forecast the expected salary on the restaurant for the two situations one running the restaurant by whole, and the other one, running it with his aunt. Each simulation consisted of 10,000 trial s.The result of Sanjay running the restaurant alone is represented in Graph A. With a mean of $10,845 and trite deviation of $8,568 (Table 1), this option shows that the expected salary would be higher than the $6,666 monthly salary that he would earn in the consulting firm ($80,000/ 12). At the same time, the standard deviation projects a high variability on the expected salary, which actor that there is the potential of earning more bills than at the firm and of losing money running the business.