Cyrus Food Booth Forecasting Project

Cyrus’ Food Booth: An Overview

Aubrey J. Martin

West Virginia State University

        Cyrus plans to fund his final year of college by operating a food booth at the six WVSU home football games. Using $1500 of his own money, he plans to run a booth at which he will sell barbecue, hot dogs, and pizza to fans. The end goal of the booth is a profit of $1000 per home game, after all expenses are considered, which he believes will be sufficient to fund his final year of school.

        Cyrus has established through personal observation, and talking to friends and other vendors, that he will be able to sell mainly hot dogs, barbecue, and pizza at his food booth. He has done research and established a selling price of $1.50 per hot dog, $1.75 per slice of pizza, and $2.50 per barbecue, along with their respective costs of $0.55, $0.59, and $.95 each. He has also established the ratios of pizza, barbecue, and hot dogs that he plans to sell in relation to each other. He wishes to build a profit maximization plan to determine his maximum possible profit given his constraints, to determine whether or not running the booth will be worth it.

 In order to operate, Cyrus will need to rent the food booth from the school at $1,000 per game for six games. He will also need to rent a warming oven at $100 per game for six games. He must prepare all food items the night before or the morning of the game due to his inability to both prepare and serve food, with exception of pizza, which would be delivered just before the game, and before halftime if necessary. He must consider whether or not he should borrow money from a friend to start the booth, and must also consider the prospect of hiring a friend for $100 per game to help in the serving process.

Cyrus is subject to many constraints including but not limited to: warming oven storage, original cash to invest, and the fact that he cannot prepare the food once the game has started, so he can only sell what he can store before the game. The most crippling constraint on his operations is the small storage capacity of the warming oven at 27,648 square inches. This low storage capacity limits him in the number of items he can store before the game, and thus the total number of food items he can sell during the game.

Cyrus’ initial investment of $1500 is more than enough to achieve his maximum per-game profit of $1470.99 before other costs, so he does not need to borrow money from a friend to start the food booth as he had considered. His after-expenses profits in this scenario are $370.99. He is constrained by the warming oven’s maximum capacity of 27,648 square inches well before reaching $1500 in food costs, which is the point when he may consider borrowing to expand his business. This capacity limit was reached by stocking 638 pizza slices, 426 hot dogs, and 212 barbecue sandwiches. Since Cyrus makes a profit after all expenses every game, he will not need any additional funding from friends at any point, as he will have $685.49 in excess money heading into week one and will have additional profits each week thereafter to fund ongoing costs.