What would make this a decision model

Assignment Help Operation Management

Reference no: EM131941027

As a restaurant manager, you have the option to work with an online company and offer a 40% off coupon on any meal. Currently, your monthly revenue is $50,000 with no offers or discounts, and the total profit is $30,000.

This means that a $50 meal sold to one of your regular customers costs you $20 on average and profits $30. If you start advertising online coupons, some of your regular customers will get to know it and just take advantage of it.

This will causing you an immediate loss of profit, because the $50 meal is discounted to $30 and the profit is now only $10. However, the new discount will attract new customers, who will hopefully

a. If after you advertise the coupon, a $10,000 portion of the old $50,000 revenue from your regular customers is now discounted, and an additional $20,000 discounted revenue arrives from new customers, what is the new profit?

b. Create a formula that links the profit with the portion of the old revenue that has to be discounted and the additional already discounted revenue that arrives from new customers.

c. Create a two-way table that shows all the possible profits. The two revenue levels can be shown with increments of $10,000.

d. What would make this a decision model?

e. Explain the relationship between this business process and the concepts of customer segmentation and yield management.

Reference no: EM131941027

Questions Cloud

Products of the nucleophilic substitution reaction : What are the products of the nucleophilic substitution reaction of 1-chlorobutane and NaI in acetone?

Prepare journal entries to record the machine purchase : Prepare journal entries to record the machine's purchase and the costs to ready and install it. Cash is paid for all costs incurred

Titration of a strong acid and a strong base : At half titration of HCL with sodium hydroxide, do you make a buffer in this case. (Titration of a strong acid and a strong base) Please explain.

Explain the emerging enterprise network applications : Explain the Emerging enterprise network applications and Strategic importance of cloud computing in business organizations.

What would make this a decision model : Explain the relationship between this business process and the concepts of customer segmentation and yield management.

Balanced the equation using the smallest integers possible : When you have balanced the equation using the smallest integers possible, enter the coefficients of the species shown. Enter "1" if the coefficient is "1".

State how one determines the accuracy of a measurement : Demonstrate the specific knowledge gained by repeated measurements of the length and width of a table - Demonstrate propagation of errors

Molar equilibrium concentration of uncomplexed : What is the molar equilibrium concentration of uncomplexed Ag+(aq) in a solution composed of 1.1 mol Ag(CN)2-dissolved in 1.00L of 0.47 M NaCN. Kf for Ag(CN)2

Why are restrictions on free agency considered legal : Courts ruled that teams could not survive if every player was a free agent, so the leagues are allowed to restrict player movement.

User Account

All Pages