An Auction-Based Pricing Model for Start-Up Cost Minimization for Restaurants
Location
CSU Ballroom
Start Date
16-4-2013 10:00 AM
End Date
16-4-2013 12:00 PM
Student's Major
Management
Student's College
Business
Mentor's Name
Queen Booker
Mentor's Department
Management
Mentor's College
Business
Description
According to the Business Week reporter Kerry Miller (2007), 60% of restaurants fail within the first year. Restaurants fail because of both “macroeconomic” and “microeconomic” factors.
Macroeconomic factors are conditions or events not under the restaurant owner’s control, such as the economy, political and legal factors such as taxes, regulations. Microeconomic factors are things the owner can control, such as capital, location, commitment, prior experience, and costs. Because cost is one of the microeconomic factors a prospective restaurant owner can control, the owner can potentially reduce start-up costs for items like equipment through auction bidding (Yaipai'roj and Harmantzis, 2006). The purpose of this research study is to develop a mathematical model specifically for restaurants to minimize startup costs by modeling comparisons of auction costs to non-auction costs such as retail or wholesale costs of equipment. Ten online auction and four non- auction price data will be collected for standard restaurant start up equipment. Using the final prices, transportation costs, and measure of quality for each item, a regression model and the Yaipai'roj and Harmantzis model will be developed using eight of the online auction prices and two of the non- auction prices to determine which is better for suggesting whether it is better to purchase retail or wholesale, or try to purchase the particular item at the online auction. The items will be tested using the remaining two of the wholesalers/retailers and two of the auctions. Preliminary results will be presented at the conference.
An Auction-Based Pricing Model for Start-Up Cost Minimization for Restaurants
CSU Ballroom
According to the Business Week reporter Kerry Miller (2007), 60% of restaurants fail within the first year. Restaurants fail because of both “macroeconomic” and “microeconomic” factors.
Macroeconomic factors are conditions or events not under the restaurant owner’s control, such as the economy, political and legal factors such as taxes, regulations. Microeconomic factors are things the owner can control, such as capital, location, commitment, prior experience, and costs. Because cost is one of the microeconomic factors a prospective restaurant owner can control, the owner can potentially reduce start-up costs for items like equipment through auction bidding (Yaipai'roj and Harmantzis, 2006). The purpose of this research study is to develop a mathematical model specifically for restaurants to minimize startup costs by modeling comparisons of auction costs to non-auction costs such as retail or wholesale costs of equipment. Ten online auction and four non- auction price data will be collected for standard restaurant start up equipment. Using the final prices, transportation costs, and measure of quality for each item, a regression model and the Yaipai'roj and Harmantzis model will be developed using eight of the online auction prices and two of the non- auction prices to determine which is better for suggesting whether it is better to purchase retail or wholesale, or try to purchase the particular item at the online auction. The items will be tested using the remaining two of the wholesalers/retailers and two of the auctions. Preliminary results will be presented at the conference.
Recommended Citation
Yahya, Beka. "An Auction-Based Pricing Model for Start-Up Cost Minimization for Restaurants." Undergraduate Research Symposium, Mankato, MN, April 16, 2013.
https://cornerstone.lib.mnsu.edu/urs/2013/poster-session-A/48
