1. OPERATION RESEARCH and PRODUCTION MANAGEMENT (TEM 706)
SUBMITTED BY: IRELYN I. JASMIN

2. Case Study Analysis Food and Beverages at Southwestern University Football Games

3. 1. Read and analyze the case study below through the Quantitative Analysis Approach.
Based on the percentages stated in the table, these fixed costs will be proportionately assigned to each of the items. Soft drink income, for example, is intended to pay 25% of total fixed costs. Southwestern University (SWU) is a significant public institution in Stephenville, Texas, 30 miles southwest of the Dallas/Fort Worth Metroplex, with about 20,000 students. SWU is a long-time football powerhouse that competes in the Big Eleven conference and is consistently ranked in the top 20 in college football polls. Prior to Dillon's arrival, the average attendance was 25,000–29,000. Despite the fact that the top spot remained out of reach, attendance at the six Saturday home games climbed year after year.

4. He told Maddux that the break-even report for the food service area should be available for the next meeting. As a result, he desired that the parking lots, game programs, and food service be run as profit centers. The school is the most powerful force in the small town, with more students than permanent residents in the fall and spring. Just the announcement of the new coach's arrival increased season ticket sales by 10,000. Marty Starr was concerned not just about the cost of enlarging an old stadium vs building a new one, but also about the associated activities. SWU engaged famed Billy Bob Dillon as its head coach in 2013 in order to improve its prospects of obtaining the elusive and long-desired number-one rating.

5. He wanted to make sure that the various support initiatives brought in enough money to cover their costs. Dr. Starr, president of Southwestern University, directed Hank Maddux, the stadium manager, to create a break- even chart and accompanying data for each of the centers during a recent discussion about the new stadium. More renown, the need for a larger stadium, and more concerns about seats, parking, long lines, and concession stand costs came with the increase in attendance.

6. 2. Utilize the following: a. Schematic Model (concept map); and b
2. Utilize the following: a. Schematic Model (concept map); and b. Mathematical Model

7. a. Schematic Model (concept map)
Formulate mathematical model
CASE STUDY: Food and Beverages at Southwestern University Football Games
MATHEMATICAL MODEL
REAL PROBLEM/ SITUATION
Select Appropriate math tools
Solve mathematical problem
Determine and Estimate parameters
Validate solution
Visualize solution
Draw appropriate conclusions
Communicate result
Making simplifying assumptions
Identifying governing principles
Identify variables and principles
Define question interest

8. b. Mathematical Model MATHEMATICAL MODEL THEORY NUMERICAL METHODS
PROBLEM STATEMENT
REPORT
PROGRAMS

9. Case Study 1. Prepare a brief report with the items noted so it is ready for Dr.Starr at the next meeting.
Item
Selling
Variable
Percent
Price/Unit
Cost/Unit
Revenue
Soft drink
1.50
0.75
25%
Coffee 2
0.5
Hot Dogs
0.8
20%
Hamburgers
2.5 1
Misc. snacks
0.4
10%

10. The total fixed cost per game includes salaries, cost of workers in six booths and rental fees.
SOUTHWESTERN UNIVERSITY
Data
Salaries $20,000.00
Rental fees 2,400 x $2= $4,800
Booth worker wages 6 x 6 x 5 x $7 = $1,260
Total fixed cost $20,000 + $4,800 + $1,260 = $26,060

11. The cost of this allocated to each food item is shown in the table:
Percent
Allocated fixed
Item
revenue
cost
Soft drink
25%
$6,515
Coffee
Hot dogs
20%
$5,212
Hamburgers
Misc. snacks
10%
$2,606

12. The break-even points for each of these items are found by computing the contribution to profit (profit margin) for each item and dividing this into the allocated fixed cost. These are shown in the next table:
Item
Selling price
Variable Profit
cost margin
Percent revenue
Allocated fixed cost
Break even volume
Soft drink
$1.50
$0.75 $0.75
25%
6515
Coffee
$2.00
$0.50 $1.50
Hot dogs
$0.80 $1.20
20%
5212
Hamburgers
$2.50
$1.00 $1.50
Misc. snacks
$1.00
$0.40 $0.60
10%
2606 ÷

13. Selling Break even Dollar volume
To determine the total sales for each item that is required to break even, multiply the selling price by the break even volume. The results are shown:
Selling
Break even
Dollar volume
Item
price
volume
of sales
Soft drink
$1.50
$13,030.00
Coffee
$2.00
$8,686.67
Hot dogs
Hamburgers
$2.50
Misc. snacks
$1.00
$4,343.33
Total
$43,433.34

14. Thus, total sales must be $43,433. 34 to break even
Thus, total sales must be $43, to break even. If there are 35,000 individuals in attendance, each person must spend $43,433.34/35,000 = $1.24. If there are 60,000 people in attendance, each person will have to spend $43,433.34/60,000 = $0.72. Given that both of these figures are extremely low, we can be confident that this food and beverage establishment will at the very least break even.

15. THANK YOU AND GOD BLESS