Question

Discuss considerations that a restaurant owner or manager should take into account before deciding between the following alternatives: pur- chasing an expensive piece of equipment to make hamburger portions of uniform size, or employing people on hourly wages to do the same work, along with buying inexpensive portion scales for them to work with.

Answer 1

There are the following considerations the restaurant owner or manager should take into account before deciding whether to purchase an expensive piece of equipment or employ people on hourly wages along with an inexpensive portion to work with:

1. The budget is the first and foremost consideration. The manager or owner should know how much budget it has. Whether it would be smooth to run the day to day operations after spending a big amount on the equipment or not.

2. Lifetime value and depreciation is another factor. Machine equipment depreciates with time. So, the owner should calculate the lifetime value of the same and must compare it with the other option of hiring workers.

3. Availability is another key factor. In case, wage workers are easily available and have more lifetime value than acquiring expensive equipment, then it is the best option otherwise not.

4. Demand is another consideration. In case, the demand for the hamburger is high and it continues to grow with time, the management should consider the most reliable option even when it costs much.