FROM: Catherine





The DK sandwich shop is profitable to date, but since it is family operated, the organizational goal has not been well outlined or met. The business has been operated casually over the period it has been in operation and is demonstrated by the fact that no proper books of accounts have been maintained. Nevertheless, some projections based on pessimistic, most likely and optimistic outcomes have been provided and it is upon which the analysis below is based on. The sandwich shop has been operated locally and as a business, it requires growth thus expansion to cover a wider region is an informed strategy even though it comes with additional expenses. The company needs to carry out online advertisements for their products. Two sets of data have been provided the first is based on the current production quantities of the company and the second based on projected outcome.


The data provided by the company has been simplified by calculating the expected time i.e. (Pessimistic+four*most likely + optimistic)/6). The calculations have been included in the attached graphical analysis. With average unit sales of 34,667 at $ 4 per unit per annum, which translates to $128,668, the business remains profitable but with potential of increasing the sales substantially through online marketing. The analysis shows that the unit sales could hit an average of 45,833 units without any reduction in the unit price, which means that the business would earn $183,332 in sales, an increase of $54644 or 42.4%. The current variable cost per unit is $ 3.471 with the associated total fixed costs at $ 15,000.


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