This Case is about GROWTH STRATEGY, OPERATIONS MANAGEMENT
PUBLICATION DATE: November 22, 2010 PRODUCT #: 910B13-PDF-ENG
The owner/operator of an ice cream shop has a chance to expand his product line to include soft-serve ice cream. He must examine advantages and the costs of buying used or a new single-head or triple-head soft-serve ice cream machine. He also needs to continue growing the company and he wonders about the most effective means of going about it. Pupils are requested to (1) perform a small business size-up; (2) examine the improvement of soft-serve ice cream from a qualitative point of view; (3) ascertain which of the cash flows related to the chance are important and which are recurring prices versus one time prices; (4) perform a differential evaluation to find out the ROI and payback period for the purchase of both new machines; (5) ascertain the ROI and payback period changes if a used machine is bought; and (6) decide whether to buy a soft-serve ice-cream machine and, if so, which one.