Reference no: EM13877410
Target Costing Using Quality Function Deployment (QFD) Rick's is a popular restaurant for fine dining. The owner and chef, Rick Goetz, is pleased with his success and is now considering expand- ing his existing restaurant or perhaps opening a second restaurant. Before making his decision, Rick wants to find out more about his competitive position. There are three other restaurants that compete directly with him on food quality and price. Rick knows that his profitability depends on his ability to provide a satisfying meal at the market price. His first step is to gather some information about his customers, using an independent market research firm, which informed him that his customers were looking for taste, comfort (the ambiance, service, and overall presentation of the food), and enjoyment (the distinctiveness of the dining experience, a degree of excitement). He was surprised to find that comfort and enjoyment ranked highest.
First: Customer Criteria and Ranking
|
Importance
|
Relative Importance
|
|
Taste
|
50
|
16.7%
|
|
Comfort
|
100
|
33.3
|
|
Enjoyment
|
150
|
50.0
|
|
Total
|
300
|
100.0%
|
Next, he worked with his key wait staff and chefs to try to identify the three main components, and related cost, of the service Rick's provided:
Second: Components and Cost
|
Components
|
Cost
|
Percent of Total
|
|
Menu and Food Preparation
|
$8
|
30.77%
|
|
Wait Staff
|
12
|
46.15
|
|
Food Ingredients
|
6
|
23.08
|
|
Total
|
$26
|
100.00%
|
Having the customer criteria and components, Rick now again worked with his staff to assess how each component contributed to the desired customer criteria.
Third: Determine How Components Contribute to Customer Satisfaction
|
Components
|
Taste
|
Comfort
|
Enjoyment
|
|
Menu and Food Preparation
|
30%
|
20%
|
50%
|
|
Wait Staff
|
40
|
60
|
30
|
|
Food Ingredients
|
30
|
20
|
20
|
|
Customer Criteria
|
100%
|
100%
|
100%
|
Required
1. Using the information Rick has developed, determine the importance index for each component (menu and food preparation, wait staff, and food ingredients).
2. Compare your findings in Part 1 to the cost of the components. What conclusions can you draw from this comparison?
|
Find the function''s point of diminishing return
: Consider the following function relating number of units (in 100) of a product sold, N , to the amount (in $1,000) spend on advertising, S. N = -0.08S3 + 3.6S2 - 30S + 80 , 5 ≤ S ≤ 25 - Find the function's point of diminishing ret..
|
|
What is weighted average cost of capital
: What is weighted average cost of capital (WACC) and how do you calculate it?
|
|
The first interest resetting date
: A company borrowed USD 100 million by way of a 5 year floating rate note priced at 6 month LIBOR plush 85 basis points. On the date of issue, 6 month libor was .95% p.a. 6 months later, on the first interest resetting date, 6 month libor was 1.15%.
|
|
What is retailers optimal stocking quantity
: What is retailer's optimal stocking quantity and What is the service level (also called fill rate) with this optimal stocking quantity?
|
|
Determine importance index for menu and food preparation
: Using the information Rick has developed, determine the importance index for each component (menu and food preparation, wait staff, and food ingredients).
|
|
What was the kwat repayment amount
: Duck Inc, a company based in Oracabessa borrowed USD 50 Milion. from a syndicate of banks at rate of 6% p.a. for one year. At the time of the loan, the spot exchange rate of the Oracabessa Kwat (ORK) WAS 4.50, (european terms). At the maturity of the..
|
|
Is jill behavior ethical why or why not
: Is Jill's behavior ethical? Why or why not? Use the relevant section of the ACA Code of Ethics to justify your response
|
|
What is the firm''s profit maximizing level of output
: A competitive firm has the short-run production function given by Q = 4L2 - 0.08L3 Assume the firm's fixed cost is $15,000, the labor cost (wage and benefits) is $70 per unit, and the price of the good in the market is $20. What is the firm's pro..
|
|
Part of the oncology therapeutic area
: Before thinking about appropriate portfolio decisions, the value of each project in the portfolio needs to be determined. How would you determine the value of the following project ('Project 1') in XYZ's portfolio, a project in the pre-clinical phase..
|