Test a canteen assortment in Kolkata
Before the decision
Workers complain that popular meals sell out, yet some unsold trays return daily. Canteen workers prepare extra food because running out produces immediate complaints. The proposed preorder system could help, but the manager needs to know who would be unable to use it.
The problem
Should the team choose Preorder menu or Walk-in menu for the next 12 months?
Decision owner: The business unit lead.
Preorders can reduce waste while excluding workers without reliable phone access.
Option economics
Scroll the table to see all figures.
| Option | Volume (meals) | ₹ per unit | Fixed cost | Net contribution |
|---|---|---|---|---|
| Preorder menu | 1,64,000 | 24 | ₹32 lakh | ₹7.36 lakh |
| Walk-in menu | 1,80,000 | 20 | ₹29.6 lakh | ₹6.4 lakh |
Make the call
- Calculate net contribution for Preorder menu and Walk-in menu. Which assumption makes the comparison most fragile?
- If the leading option delivers 10% fewer meals, does your recommendation change?
- What evidence would you ask for before the team makes an irreversible commitment?
Reveal the worked solution
Start by validating Preorder menu. It contributes ₹7.36 lakh after fixed costs and leads by ₹0.96 lakh. Treat that gap as the amount of unmodelled cost or lost contribution the option can absorb before the ranking reverses.
- Frame the decision
Specify the eligible population and the outcome before collecting data. Treat the figures as planning estimates. Use comparable groups to measure the effect before rollout.
- Calculate both options
Preorder menu: 1,64,000 meals × ₹24 less ₹32 lakh in fixed costs gives ₹7.36 lakh. Walk-in menu: 1,80,000 meals × ₹20 less ₹29.6 lakh in fixed costs gives ₹6.4 lakh.
- Stress-test the forecast
Preorder menu leads by ₹0.96 lakh in the base case. If Preorder menu delivers 10% fewer meals (1,47,600) at the same margin and fixed cost, it contributes ₹3.42 lakh. Holding the other option constant, the stressed result falls behind. This isolates volume risk. Check whether both options would respond to the same change in demand.
- Set a decision threshold
Holding the other option’s result fixed, Preorder menu needs at least 1,60,000 meals to match or beat it under the model. Assign comparable sites to each menu and measure participation by shift.
Preorders can reduce waste while excluding workers without reliable phone access. Compare the cost of a limited test with the loss the business would face if the full commitment failed. Ask the team to agree the decision criterion before collecting more evidence.
What if the whole market moves?
The worked solution tests a change to one option at a time. Here, both options gain or lose the same percentage of volume. Unit contribution and fixed costs stay constant.
| Volume scenario | Preorder menu | Walk-in menu | Higher contribution |
|---|---|---|---|
| Both lose 10% of volume | ₹3.42 lakh | ₹2.8 lakh | Preorder menu |
| Base assumptions | ₹7.36 lakh | ₹6.4 lakh | Preorder menu |
| Both gain 10% of volume | ₹11.3 lakh | ₹10 lakh | Preorder menu |
Explain which option you would take forward. Check whether capacity, price or customer mix would also change as the market moves.