CASE STUDY Penn & Pat\'s Pretty Hot Pizza Pronto ou and your roommate are prepar

Question

CASE STUDY Penn & Pat's Pretty Hot Pizza Pronto ou and your roommate are preparing to start Penn make the pizzas to order and have them at the cus. Pat's Pretty Hot Pizza Pronto delivery service in tomer's door within 10 minutes of their coming out your apartment. The company will provide fresh, hot of the oven, ensuring a product that is much hotter pizza with a short lead time to the other residents in and delivered more quickly than your competitor can your very large apartment complex. However, before deliver. In addition, both you and your roommate you start, you need to conduct some preliminary analysis of the pizza-making process and determine necessary pizza-making skills and know-how to be your costs (and your profit!) and your capacity have worked in pizza places, so you feel you have th successful The Production Process Making pizza is a relatively simple process: premade Business Concept Your idea is to bake fresh pizzas to order and allow the customers to determine the toppings from a list of more than 15 different items; you will offer pizzas , the customer-designated in dough is flattened out gredients are put onto the flattened dough, the raw pizza is carefully loaded into the oven to ensure that only in a "large" size to simplify the ordering and making process. The pizzas will be available for deliv ery only to other apartments in your very large build- ing. You believe that this is a good market because the closest competitor is five miles away, making it very difficult for the people in your building to get a hot pizza delivered in a timely fashion. Your strategy is to it cooks evenly, the pizza cooks, it is taken out and quickly sliced and boxed, and finally the pizza is de- livered to the customer's door. You already own the necessary capital equipment of an oven, three pizza trays, and enough containers to store all the offered ingredients. However, your countertop and oven are

Explanation / Answer

a) To answer the first part of the question: If a Pizza is sold for $8, how much will you earn per pizza.

The given costs need to be taken into consideration:

Cost of Ingredients : $5.50

Cost of pizza box   :$0.50

Total Cost              :$6.00

The value of the time spent by the two on making Pizzas:

Time to flatten the dough : 2 min

Time to place the ingredients : 5 mins

Time to bake in oven:8 mins

Time to adjust the pizza in the oven:1 min

Time to slice and pack the pizza : 1 min

Time to deliver the pizza : 10 mins ( assuming the delivery is taken care of by you)

So a total of 27 mins are spent by you on making and delivering 1 pizza.

Since it is given that you take night classes and only one of you will be able to work, it is safe to assume that both of you are students. So the cost of 27 mins that are spent bu you to make and deliver a pizza cannot be put down in monetary terms as there is no opportunity cost invloved, The next best thing that you could do besides this business is studying or working at a pizza outlet in which you ample experience. The value addition that is received because of studies is not quantifiable in monetary terms. And your salary for working in a pizza outlet is not known in the given case.

So the amount of money earned per pizza sold is $2.00

b)With profit of $2 per pizza and the total of 27 mins of work per pizza , you will earn $2/27 mins which is approx:0.07 cents per minute.

c) In 1 hour with only 1 of you is working you will make and sell 2 pizza and for each pizza you will earn $2. So $2*2 pizzas will help you earn $4.00 per hour.

d)If both of you are working you will individually make 2 pizzas in 1 hour and together will make 4 pizzas. So your total earning in 1 hour will be 4pizzas*$2 per pizza = $ 8 per hour.

e) To answer the question as to what price you would like to sell the pizzas, though you will like to earn maximum profit by selling pizzas,various factors need to be taken into consideration before deciding the price and profit:

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.