Can a cloud kitchen enter Panaji?
Before the decision
The team has evidence of weekend tourist demand but little evidence about local weekday ordering. The founder wants to repeat the menu that performed well at pop-ups. The kitchen manager argues that tourist traffic, delivery refunds and weekday prep volumes will change the economics.
The problem
Should the team choose Own fulfilment or Aggregator storefront for the next 12 months?
Decision owner: The business unit lead.
Delivery commissions and discounts move independently of menu prices.
Option economics
Scroll the table to see all figures.
| Option | Volume (meals) | ₹ per unit | Fixed cost | Net contribution |
|---|---|---|---|---|
| Own fulfilment | 85,000 | 95 | ₹58 lakh | ₹22.75 lakh |
| Aggregator storefront | 1,10,000 | 57 | ₹21 lakh | ₹41.7 lakh |
Make the call
- Calculate net contribution for Own fulfilment and Aggregator storefront. 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 Aggregator storefront. It contributes ₹41.7 lakh after fixed costs and leads by ₹18.95 lakh. Treat that gap as the amount of unmodelled cost or lost contribution the option can absorb before the ranking reverses.
- Frame the decision
Separate demand you can reach from demand you can serve reliably. Test reorder behaviour before using the full-year forecast.
- Calculate both options
Own fulfilment: 85,000 meals × ₹95 less ₹58 lakh in fixed costs gives ₹22.75 lakh. Aggregator storefront: 1,10,000 meals × ₹57 less ₹21 lakh in fixed costs gives ₹41.7 lakh.
- Stress-test the forecast
Aggregator storefront leads by ₹18.95 lakh in the base case. If Aggregator storefront delivers 10% fewer meals (99,000) at the same margin and fixed cost, it contributes ₹35.43 lakh. Holding the other option constant, the stressed result still leads. 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, Aggregator storefront needs at least 76,755 meals to match or beat it under the model. Run identical weekday menus across channels and compare contribution after refunds.
Delivery commissions and discounts move independently of menu prices. 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 | Own fulfilment | Aggregator storefront | Higher contribution |
|---|---|---|---|
| Both lose 10% of volume | ₹14.68 lakh | ₹35.43 lakh | Aggregator storefront |
| Base assumptions | ₹22.75 lakh | ₹41.7 lakh | Aggregator storefront |
| Both gain 10% of volume | ₹30.83 lakh | ₹47.97 lakh | Aggregator storefront |
Explain which option you would take forward. Check whether capacity, price or customer mix would also change as the market moves.