Roller Coaster Magic

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Roller Coaster Magic

• By Lauren Presley
• BISM 2100

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Roller Coaster Magic Overview

• Right now Roller Coaster Magic is doing very
  well. For a while there were a few set backs but
  now the company is under new management and the
  entire staff has reorganized to accommodate new
  needs. The Assumptions Chart link and Budget link
  provided on the following slide indicates the
  cost of all expenses. Included in these expenses
  is the addition of beer to the menu and increased
  advertising cost.

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Pro Forma BudgetExpenses forApril and May
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Company Assumptions Link and Link to Pro Forma
Budget
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Recommendations made to the Roller Coaster Magic

• There were two recommendations made to the
  company.
• Recommendation one was
• R.C.M. is unsure if they should sell beer at the
  concession stand. R.C.M. thinks they can sell a
  beer to every fourth customer (except on Sundays
  when no beer can be sold). It seems to be
  lucrative because the beer sells for 3 each and
  costs R.C.M. only 0.66 to purchase.
  Unfortunately R.C.M. is afraid that they would
  cannibalize the soft drink sales with the beer
  customers (one soft drink less for every beer
  sold). It will cost R.C.M. 3750 to purchase the
  beer license from the county and R.C.M.s monthly
  insurance costs would rise to 375 per month.
  Should R.C.M. offer beer to their customers?
• Recommendation two was
• R.C.M. feels fairly comfortable that they dont
  have to spend more than 350 in advertising,
  since the amusement park advertises heavily in
  the area, and there are only 8 other concession
  stands/food service locations in the park.
  Nevertheless a former high school friend of the
  owner of R.C.M. runs a marketing agency and told
  R.C.M. that he can guarantee them 3 more
  customers per hour if they would enter a annual
  marketing agreement with his company costing a
  1200 monthly service fee. Would it be a good
  idea to increase the marketing budget?

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Recommendation One Is Selling Beer Going
to Potentially Impact the Company in a Positive
or Negative Way?

• According to the chart (to the right) the total
  coast of adding beer was 4,034.52.
• The total cash flow before beer was 44,031.95
  after beer R.C.M. thought it would be about
  50,00.00
• Total expenses before beer were 14,182.78 after
  adding beer they were up to about 15,00.00.
• By adding beer to the R.C.M.s menu there would
  be an increase in cash flow and an increase in
  expenses. This will potentially cause a positive
  impact on the company (so they thought).

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Recommendation Two Does an increase in
advertising potentially help the company or not?

• According to the chart (to the right) the total
  cost of adding more advertising was 1,200.00.
• The total cash flow with less advertising was
  44,031.95. R.C.M. hoped the cash flow after
  increased advertising would be about 60,000.00.
• Total expenses before advertising were 14,182.78
  after more advertising they would hopefully be
  about 15,000.00.
• The increase in advertising would cause an
  increase in both cash flow and expenses.

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Links to Recommendations One and Two
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Actual Impacts of Recommendation One
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Actual Impacts of Recommendation Two
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Net Income for R.C.M.

• The chart shows the most customers ate at R.C.M.
  in September and October.
• The least amount of people ate in January,
  February and March.

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Conclusion

• In conclusion, Roller coaster Magic has come a
  long way in their first year. The company has a
  lot to be proud of. Roller Coaster Magic was put
  to two tests. Should they serve beer and should
  they increase their advertising. The company
  served beer for a while and then called it quits,
  good thing! R.C.M. also increased their
  advertising which helped the companys over all
  cash flow.