Calculate the average number of customers

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Question: You are considering opening a dollar store in which each item sells for $1. A franchise that provides the merchandise and stock it 011 your shelves costs $50.000/year. The monthly rent is $3000. You need to hire 4 people to work on 4 cash registers and 2 people to help customers and to organize the store. The hourly rate for each of your employees is $l5/hour including benefits and you intend to open the store 8 horns a day, 7 days a week. You can assume that a month is 30 days and there is 110 shortage of people to work over weekends at the same rate of $l5/hour. Suppose that, on average, a customer is expected to buy $5 worth of items when s/he visits the store. Answer the following and show your calculations:

a) To determine the feasibility of the project, i.e.. calculate the average number of customers per hour must visit your store before you start making profit

b) Suppose that the margin of error for the demand estimate of $5 per customer is +20%. How does this affect your solution in (a)

Reference no: EM131858952

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