Question

5. John Flowers owns Keneally’s Irish Pub. On the upcoming St. Patrick’s Day, John expects a capacity crowd. John normally operates with four servers. Because of seating limitations, John can only add a total of four more servers to his staff for St. Patrick’s Day. Each server costs John $12.00 per hour. His beverage costs are 25 percent. Each added server can generate an additional $600.00 in beverage sales per hour if they work a full 8-hour shift. Prepare a spreadsheet that details the increased revenue, labor costs, beverage costs, as well as the revenue remaining after John pays his product and labor costs if he places an additional one, two, three, or four full-time servers on his St Patrick’s Day employee schedule. What additional factors might John take into account before determining how many additional servers he should add?

Answer 1

Considering an 8 hour shift
Parameters	calculation	1 server	2 server	3 server	4 server
Total additional sales ($)	=no of servers*8*600	4800	9600	14400	19200
Server cost ($)	=no of servers*8*12	96	192	288	384
Beverage cost ($)	food cost percentage terms (25% of total sales)	1200	2400	3600	4800
Extra revenue ($)	=Total sales-sever cost-beverage cost	3504	7008	10512	14016
Other factos that need to be considered in setting up the additional servers are
1) Propotionate increase in demand to justify additional servers
2) Availability of sufficient beverage stock to accommodate increased footfall
3) Training and other considerations for new servers
4) Availability of servers for entire duration
5) What to do with servers- keep or cut down after St. Patrick's day