Blizzard Wooden Shake Case Study

Blizzard Frost Shake

1) The amount of money I need to start of with is about $20,000 because of all the items I need to start my business. I would be using this money to open a business which I sell Slushie. To make Slushies I need items to start my work and the items I need are water, ice, Flavoured food coloring, cups, straws, blenders, and sugar. All these items are required because that is how I will make my Slushies.

|Items |Quantity |Price |Fixed or Variable? |
|Water |1000 |$4.00 each 2L ($4000) |Variable |
|Ice
|500 |$2.00 ($1000) |Variable |
|Flavoured |700 |$10.00 ($7000) |Fixed |
|Cup |1000 |$3.00 for 50 ($3000) |Variable |
|Straws |1000 |$1.00 for 100 ($1000) |Variable |
|Blender |20 |$50.00 ($1000) |Fixed |
|Sugar |3000 |$1.00 for 1Kg ($3000) |Variable |

Water- 1 Bottle contains 2L Ice- 1 ice packet is 1Kg
Price = 1 Bottle is $4.00 Price = 1 ice packet is $2.00 1000 Bottles contains 2000L 500 ice packets weights 500Kg 1000 Bottles are $4000 500 ice packets are $1000

Flavored food colouring- 1 costs $10.00 Cups- 1 (contains 50) costs $3.00 - 700 costs $7000 - 1000 (contains 50,000) costs $3000

Straws- 1 (contains 100) costs $1.00 Blender- 1 costs $50.00 1000 (contains 100,000) costs $1000 20 costs $1000

Sugar- 1 bag is 1 Kg
Price = 1 bag is $1.00 3000 bag is 3000Kg 3000 bag is $3000

Selling Slushies will be running during September, October, April, May, and June.
These 5 months it will be running because of the cold season which starts in November and ends at March. During these cold weathers Slushies won’t be sold.

Production Schedule

Labour |Total Product |Marginal Product |Fixed Cost |Variable Cost |Total Cost |Marginal Cost | |0 |0 | ___ |800 |0 |800 | _______ | |1 |60 |60 |800 |160 |960 |160 | |2 |180 |120 |800 |300 |1100 |140 | |3 |260 |80 |800 |450 |1250 |150 | |4 |230 |-30 |800 |575 |1375 |125 |
|

Cost Schedule

Labour |Total Product |Marginal Product |Fixed Cost |Variable Cost |Total Cost |Marginal Cost |AFC |AVC |AC | |0 |0 | ___ |800 |0 |800 | ___ | ___ | ___ | ___ | |1 |60 |60 |800 |160 |960 |2.66 |13.33 |2.66 |5.32 | |2 |180 |120 |800 |300 |1100 |1.16 |6.66 |2.50 |3.66 | |3 |260 |80 |800 |450 |1250 |1.875 |10 |5.625 |7.50 | |4 |230 |-30 |800 |575 |1375 |-4.16 |-26.66 |-19.16 |-23.32 | |

Price of Product |Cost to make 1 product |Product sold |Revenue |Total Cost |Profit per product |Marginal Revenue |Marginal Cost |Total Profit | |4 |2 |2 |60 |2 |9 | | | | |3 |2 |5 |41 |5 |5 | | | | |2 |2 |10 |25 |10 |3 | | | | |1 |2 |15 |16 |15 |0 | | | | |0 |2 |20 |0 |20 |-3 | | | | |

7) The estimation I made to sell my Slushie is for $3.00. This is a good price since a lot of people would buy a cool drink during September and October which is pretty warm. Then comes winter which I close and then I re-open it in April and goes on till May and June. Since April is the start of spring it would start to get warmer and people will tend to by cold drinks again. The demand will rise when we open during September, October, April, May, and June. Our supply will increase during November, December, January, February, and March.

8) The total profit I should approximately make is around $1000+ during September and October because of the level of heat and more people tending to buy cooler drinks to cool themselves. My business will drop during the winter breaks, but then later open During April, May and June. April and May should have around $1000+ since again it will become a really hot weather. In June I should be able to make at least $2000+ because it will become one of the hottest school month ever.