Question

2. SHTM Tavern aims to redesign its menu. You are asked to help with the menu engineering.

 

Menu items	Price	Cost	Number	Contribution	Menu
			Sold		Mix %
Pork Barrel	$3.95	$1.30	50	$2.65	3.2%
Lamb Leg	$3.75	$1.00	40	$2.75	2.6%
Chicken Breast	$3.95	$1.40	150	$2.55	9.6%
Burger Delight	$3.45	$0.85	300	$2.60	19.2%
Super Burger	$4.95	$1.25	190	$3.70	12.1%
Roast Beef	$4.95	$1.50	250	$3.45	16.0%
Ocean Catch	$4.45	$1.20	200	$3.25	12.8%
Tuna Salad	$3.50	$0.60	175	$2.90	11.2%
Egg Salad	$3.25	$0.35	150	$2.90	9.6%
Cheese Mix	$2.95	$0.40	60	$2.55	3.8%
		The total number sold:	1565		100.0%

 

 

A.   Calculate the average contribution margin for all the menu items; (Hint: Average contribution margin = Total contribution margin ÷ Total Number Sold)

B.    Calculate average popularity index; (Hint: Average popularity index = 1 ÷ Number of the menu items)

C.    Categorize the menu items into Star, Plow Horse, Puzzle, and Dog by showing each item’s popularity and profitability; (Hint: Use the average contribution margin and average popularity index as the cut-off points)

D.   Share your suggestion on how SHTM Tavern should manage the Plow Horse items.