Katie Haney

June 6, 2017
Food Service Management
Feasibility Study

Goals

Lutheran Health Networks Nutritional Services department has been undergoing many

changes in the last few months. During these changes the employees have had to be very

flexible, as change is never easy. The biggest change this department has been faced with is

being bought out by the Morrison Health Group. This has required them to change just about

everything that they were originally doing before. As their mission statement reads, The

Nutritional Services Division is dedicated to providing its customers with safe, quality, and

nutritious food. We are committed to being responsive to the changing needs and expectations

of our customers while operating in an ethical and fiscally responsible manner. With change

comes trial and error but as I have witnessed, this department has been very responsive to the

changing needs of their customers.

Much as any business, one goal here is that there is a profit made at the end of the day.

One particular problem that I have been asked to look at is the need for an improved Latin

Wednesday. This micro concept has been ran for the past several months out of one of the

hot bars in the middle of the caf. This happens to be an extremely popular option so much so

that we generally run out of food and do not end up with much of a profit. With a

Nacho/Walking Taco Lunch Cart offered everyday opposed to just Wednesday, we could

increase the profit margin, attract more customers, and help alleviate the rush by spreading it

out five days per week.

Community-Level Factors
Katie Haney
June 6, 2017
Food Service Management
Lutheran Hospital has approximately 400 beds and serves over 6,000 meals per day

composed of patient meals, guest, and faculty and staff meals. Recently there has been several

changes in economic factors among Lutheran Health Network. Currently, the patient census in

lower than normal due to doctors canceling elective surgeries as a form of boycott. One

problem that they are currently facing is limited funds, lack of renovation, as well as several

other problems because of the current owner of this facility. With tensions high, the caf

remains open the majority of the day and serves a large percentage of employees and visitors

as we know they are unlikely to leave for meals. Currently, there are several micro concepts

ran throughout the week in the middle hot bar offering a large variety of options. As I have

witnessed, Latin Wednesday is most popular and also most demanding to work, as I have also

witnessed. After working two Latin Wednesdays , I came across several problems, one of

which being the supply and demand. This is when my idea of a Nacho/Walking Taco Lunch Cart

came to mind.

Site-Specific Factors:

One location that might work for a Nacho/Walking Taco Lunch Cart would be near the

microwave station. Having a lunch option slightly out of the caf itself could improve the

congestion of people during the lunch rush. Being that this area is before one actually walks

into the caf, it would draw some traffic in that direction and slowing the rush in the caf even

if they do not go with the Nacho option. While having this option available through the week it

is likely that we would see approximately 300 people each day. The caf alone normally serves

1200 people each day however being that there is so many different options adding another

would further break down the demand for any one station alone. As far as competition goes,
Katie Haney
June 6, 2017
Food Service Management
we no longer do lunch vendors so we would not have to worry about that but we do have Tim

Hortons upstairs near the main lobby. Recently a Bon Bons coffee shop opened but has limited

hot food items to offer. I do not feel as if there is much competition with the caf and its large

array of meal options.

Initial Sales Projections

Looking at what is sold now on Latin Wednesday, I would estimate that there would be

approximately 300 people who would buy a walking taco. Last Wednesday we sold to 347

people. Given that this Walking Taco Cart would be offered throughout the week we may serve

more or less people each day. As we have observed, this is the most popular micro concept and

something that people want more than once a week, satisfying our site-specific factors. Some

community-level factors we must consider is that this option is something familiar to a

community member and something that they know will taste good to them. For the

ingredients, we could cut back from what was offered on Latin Wednesdays because this is

now something offered five days a week instead of just one. For convenience and cost of labor

prepackaged chips would be our best option, although slightly more expensive than buying

large bags of chips and putting them into bags ourselves I find that it is worth the investment.

We could offer two meats (chicken/beef), three toppings (lettuce, cheese, tomatoes), and three

condiments (sour cream, hot sauce, mild salsa). All of this would actually go into the already

bagged chips therefore we would not have to worry about serving tray/Styrofoam containers.

The pricing would be as follows:

Katie Haney
June 6, 2017
Food Service Management
Ingredient Food Cost per Customer Cost
Serving (35% food cost)
1 bag Tostitos chips $0.17/bag $0.23
cup ground hamburger ($0.18/ounce) $0.97
(4oz) $0.72

Or
($0.15/ounce)
cup shredded chicken (4 oz) $0.60 $0.81
Shredded Lettuce (2 oz) ($0.05/ounce) $0.14
$0.10
Shredded Cheese (2oz) ($0.13/ounce) $0.87
$0.26
Tomatoes (2oz) ($0.04/ounce) $0.11
$0.08
Sour Cream (1oz) (0.08/ounce) $0.11
$0.08
Hot Sauce (1 oz) (0.14/ounce) $0.19
$0.14
Mild Salsa (1 oz) (0.04/ounce) $0.05
$0.04
$1.59 hamburger $2.67 hamburger
$1.47 chicken $2.51 chicken

As you can see, the average cost per serving is less than two dollars and the customer

cost is less than three. It would be easiest to charge three dollars even for the walking taco

itself, regardless of the meat the customer pick. People likely do not carry extra change, it is an

easy amount to remember (for the next time they visit), and it is enough that we would make a

profit from it. The only other additional cost would be paying for an employee to staff the

Walking Taco Cart. We already have the serving utensils, hotel pans, and catering products that

would assist us in keeping these items cold/hot. We would have an employee staff the cart

from 11-1, Monday through Friday and allow 30 minutes for prep on the cart (8.75/hour for 2.5
Katie Haney
June 6, 2017
Food Service Management
hours 5 days/week). This cart would not need to be staffed by no more than one person. At

$8.75/hour for 2.5 hours 5 times/week we would be paying them $109.38/week.

Assessment of Initial Sales Projections

As a part of my assignments to be completed here at Lutheran, I must complete

satisfaction surveys. If there is one thing that I have learned it is that food service is largely

customer service based. I think that is something that the customers would greatly enjoy and

because it is fairly simple and something that would satisfy them (without little complaints). As

far as the feasibility of this cart goes, I think that it would be something that should wait until

after the renovation of the caf which is likely to happen within the next few months. As I

mentioned above, change is hard for people so changing a lot at once may not be ideal. I do

believe that this project is feasible but I would probably charge close to four dollars so that our

profit is higher and wait until after the renovation.

Final Determination of Feasibility:

The walking taco bar is something easy, requires little preparation, would solve our

Latin Wednesday problem, all while making a profit. We would not need to invest in any

extra equipment, utensils, or serving containers as we already have all of that within the

kitchen. Although the serving size of a single serve bag of chip is relatively small to what they

get during Latin Wednesday, I think that the dramatic price difference, $7 versus $4, would be a

great trade off.

This is a project that I think could be worth trying. As we know Latin Wednesday has

been a big hit, but it is something that we have struggled with tremendously to keep up with. A
Katie Haney
June 6, 2017
Food Service Management
walking taco cart might be the solution that we need to slow things down, make a profit, while

providing its customers with safe, quality, and nutritious food.