Articulating Business Metrics in a Business Case

Study

Student: Lucija Ivakic

Coursera - Duke University Course

Problem facts

 The average number of visitors per store has held constant over the past several
years
 Revenues per store are down by an average of 10%
 Many stores are no longer profitable
 Large amount of inventory is being thrown away unused at the end of each day
 Yogurt flavour customers want is often not available, even when the flavour is posted
on the menu
 Complain about stores being closed when customers visit
 The chain is facing increased competition from frozen yogurt sold in 24-hour grocery
stores

Dissecting and structuring problems

 The average number of visitors per store has held constant over the past several
years: Conversion of buying customers needs to be improved and number of
customers increased.
 Revenues per store are down by an average of 10%: Customers are not buying
enough or not buying at all.
 Many stores are not profitable anymore: Operating cost needs to go down or
revenue needs to be increased or both.
 Large amount of inventory is being thrown away unused at the end of each day: it's
important to find out what is being thrown away every day. Inventory waste should
decrease or profitable ways to make money from daily unused inventory should be
found.
 Yogurt flavour customers want is often not available, even when the flavour is posted
on the menu: the inventory of items wanted needs to be increased.
 Complain about stores being closed when customers visit: popular times for visits
should be determined and store opening hours adjusted accordingly. Happy hour
promotions should be implemented to increase sales during not so busy part of the
day.
 The chain is facing increased competition from frozen yogurt sold in 24-hour grocery
stores: Idea of 24-hour kiosk selling yogurts should be considered.
Goal: Restore profitability and increase revenue by reviewing past trends of revenue vs
operational cost of each flavour sold. The idea is to be able to identify complete wastage
(Business metric -profitability) and profitable trends in the last 4 years.

Description: By creating reports based on available information and

calculations/assumptions on this data, Happy Hat management should be able to determine
which yogurt flavours are actually profitable and which aren't. Management should be able
to take action on reducing operating cost by decreasing weekly complete wastage (dynamic
business metric) with better inventory management thus increasing profitability. Moreover,
management should be able to make weekly incremental changes on what gets delivered,
which yogurt flavours should be sold and what quantity each week. They could possibly try
to run location-based campaign .

Reports to create:

 Report 1: Parse available data for the past 4 years for each store by types of yogurt
and toppings purchased, amount sold, price for each purchase, summed up per
week.

 Report 2: Parse available data by cost of inventory/ingredients sorted by yogurt type

for each yogurt type sold and by amount of inventory delivered each week. For
inventory that will be used in every flavour, the distribution of the shared inventory is
spread across all the yogurt flavours (milk, sugar and yogurt base should be equally
spread across all yogurt flavours). Inventory that are used for specific yogurt flavours
should be compared against just the yogurt flavours e.g. vanilla flavouring for the
vanilla yogurt.

Actions to take:

 Present the tables and reports to Happy Hut Management to action