Demand Management Plan for Wild Dog Coffee Company:

Impact of Advertising on Product Demand

To analyze the impact of advertising on product demand, a simple linear regression model to forecast the pounds of espresso beans used each month based on advertising expenditures can be used. The model used can be found in the Appendix to this paper.

The regression equation is: Y = 542.78 + 0.42X where Y is the pounds of espresso beans used and X is the advertising dollars spent.

The R-squared value is 0.56, which means that 56% of the variation in espresso bean use is explained by advertising dollars spent.

Forecasting the Pounds of Espresso Beans Needed for Month 7

To forecast the pounds of espresso beans needed for month 7, it is helpful to use the regression equation and plug in X = 1,350 (the advertising budget for month 7). Y = 542.78 + 0.42(1,350) = 1,116.78

Therefore, the forecasted pounds of espresso beans needed for month 7 is 1,116.78.

To answer the following questions:

How many espresso beverages will the company need to prepare, on average, each day?

How many pounds of espresso beans will the company need, on average, each day?

It is assumed that there are 30 espresso beverages made each hour, and the coffee shop is open for 14 hours a day (6:00 a.m. to 8:00 p.m.). Therefore, the company needs to prepare an average of 420 espresso beverages per day (30 x 14).

Since 1.5 ounces of espresso beans are used for each beverage, the company will need an average of 21 pounds of espresso beans per day (420 x 1.5 / 16).

Inventory Management Analysis

There are two different approaches to inventory management: Just-in-time (JIT) inventory management and Economic order Quantity (EOQ) inventory management.

JIT system minimizes inventory levels by only ordering and receiving goods when they are needed. The advantages of this system include lower inventory holding costs and less space required for storage. The disadvantages include a higher risk of stockouts and a reliance on suppliers to deliver goods on time (Ufua et al., 2022).

EOQ system determines the optimal order quantity based on the trade-off between inventory holding costs and ordering costs. The advantages of this system include the ability to take advantage of quantity discounts and to have a more predictable inventory level. The disadvantages include the need for more space for storage and the possibility of overstocking (Imarah & Jaaelani, 2020).

For Wild Dog Coffee Company, the JIT inventory management system may be more suitable because of the limited storage space and the high cost of holding inventory. However, this system also requires a reliable supplier and good communication to ensure that the company does not run out of espresso beans.

Scheduling Management

There are two different staffing scenarios for Wild Dog Coffee Company, fixed schedule and flexible schedule. Both have their advantages and disadvantages as shall be shown (Forbes, 2020).

Fixed Schedule

This scenario has a fixed schedule for each employee and requires the same number of employees each day. The advantages of this system include more predictable labor costs and more consistent service for customers. The disadvantages include a higher labor cost for slow days and the potential for overstaffing...

The advantages of this system include lower labor costs for slow days and more satisfied employees. The disadvantages include less consistency in service for customers and the potential for understaffing on busy days.

For Wild Dog Coffee Company, a flexible schedule may be more suitable because it allows for more flexibility in staffing levels and can help to reduce labor costs. However, it is important to ensure that there are enough employees scheduled on busy days to provide good service to customers.

Scenario 1: Fixed Schedule

In this scenario, the coffee shop has a fixed schedule for all days of the week. The same number of employees work the same hours every day of the week. This scenario offers a predictable schedule for employees and management, but it may not be flexible enough to accommodate changes...

…varies depending on the day of the week and the time of day.

2. The total labor costs are higher for Scenario 2, where staffing levels are adjusted based on demand, compared to Scenario 1, where the same number of employees work each shift every day. This indicates that adjusting staffing levels based on demand can be more costly.

3. The total number of hours worked and the total labor costs vary depending on the day of the week and the scenario.

4. The busiest day of the week is Saturday, with the highest number of employees needed and the highest total labor costs.

5. For Scenario 2, the number of employees needed for each shift is adjusted based on demand, which allows for more efficient use of labor resources, but also increases labor costs.

Overall, this table provides important information for the company to make informed decisions about staffing levels and labor costs, taking into account both the demand for services and the financial impact on the company.

Best Recommendation

Under scenario 1 staffing, the company is operating with the minimum number of employees required to fulfill its essential functions. This means that there is no extra staff to cover for absences or handle unexpected increases in workload. This scenario is often used as a cost-saving measure, as it allows companies to operate with the fewest number of employees possible.

However, scenario 1 staffing can also lead to several challenges for businesses. For example, if an employee is out sick or takes a vacation, there may not be anyone available to cover their responsibilities. This can result in delays or disruptions to the company's operations. Additionally, if the workload unexpectedly increases, the existing staff may not be able to handle the additional tasks, leading to decreased productivity or missed deadlines. Workers tend to want consistency in hours and if they cannot get that they may go to a different organization. So flexible scheduling could hurt the company in terms of turnover as well.

Overall, scenario 1 staffing can be a viable option for companies that need to reduce costs…