Biz Café Excel CapstoneThis assignment focuses on forecasti
Biz Café Excel CapstoneThis assignment focuses on forecasting gross profit based on historical sales, change in demand as a result of increasing your prices and lastly when your coffee supplier increases the cost of your coffee you can determine the added cost to the cafe.Gross profit does not consider your rent, salaries and expenses that are not associated with the cost of the product you sell. Simply it is the result of subtracting your costs of goods sold from your revenue. Part of this assignment is like the Biz Café Operations Excel #5 assignment. The difference this time is that you are using sales data from six weeks and not one week. Again, we are keeping it simple in that we are not including your baked goods, discounts and price changes over the six weeks. You will use your decision period 9 coffee prices and type of coffee (if you changed). We are all consumers and have at one time or another paid an excessive amount for a product and have ignored price increases because you prefer their product over others. This is normal behavior. When you purchase for convenience, the price is usually higher than with your normal source. Loyalty only goes so far, there is a price point where you will consider other stores or locations for your next purchase. This is the same for your customers some will prefer your café even after a nominal price increase, others may change their habits, and a few may choose another café to buy their coffee.Your café has brand awareness and generally satisfied customers. You want to earn more revenue which will result in a higher gross profit. Don’t confuse gross profit (margin) with net profit. When increasing net profit, you have many options since it involves money you spend on servers, rent, advertising to name a few. To increase your gross profit, you only have two options. Either increase revenue or lower cost of goods sold. We are going to attempt to increase our revenue by raising our prices for each cup size. For this exercise we are not worried about why you want more revenue. It could be for capital improvements, better benefits, salary increases and many more reasons.Before we can forecast our expected gross profit after increasing our coffee prices, we must have a handle on our current sales and understand how they will change when we increase our coffee prices. We are fortunate to have a working relationship with the local College of Business. A team of students have spent the last six weeks surveying your customers on how they would react to an increase in the price of a cup of coffee. They have provided you with the reaction to your potential increase in coffee prices. They asked the customers how they would react if you increased the price by 5%, 10% and 15%. They were offered three responses:No changeReduce purchases by 30% per weekGo to another caféOnce you have determined your gross profit based on the historical coffee sales data you will determine the impact of increasing your coffee prices (focusing on a large cup of coffee) using the preference changes that the students calculated based on the survey responses. Finally, your coffee supplier increases their coffee prices and you will have to the cost of the coffee for a large cup of coffee.You need to add the values to the green filled cells. That data comes from your BIz Cafe data. Under results I have added your sales for each cup size and like in Excel Operations # 5 you can find cost and priciing information in Decision Period 9.You need to determine the resutls in the blue fillled cells using the information on the spreadsheet. This assignment is designed to demonstrate the power of referencing cells that already have a value you need for the calculations. We are expecting to see functiion and formulas. Don’t just type in an answer.
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