Quantitative Concerns:

The manager approximates the change in cash flows for each of the substitute over the forecast time horizon compared to the base case. The difference among the flows of funds in and out of an organization over a definite time interval, including revenues, costs, changes in properties and legal responsibilities are called as cash flow. Here, managers are concerned only with the cash flows attributable to the project. A good instance of capacity's impact on revenues is a restaurant in Jamshedpur. Customers liked the neon signs that dotted the wall, the high-pitched jukebox, and the way they throw the peanuts shells on to the floor. Therefore, the customers have to wait for nearly two hours to be seated, and the choice on the items was limited. Consequently the restaurant owner has enhanced the number of seats and also enlarged the size of kitchen to handle more volumes and offer more choices. Within months the restaurant started to bring around Rs 80,000 per week, a 40 percent enhanced in the net outcome. This became the prototype for number of restaurants across the country.