NoBull Case - Target capacity

1. Based on the data provided, choose a target production capacity (in burgers per week) for what you think NoBull will need to meet demand by the end of 2012.
2. Explain why you chose this target.

NoBull Burger Cooking and Setup Times for Burger Production Labor Days/Week Hours/Day Standard Batch Size (# of Burgers) 80 Burgers/Package Step 1 Setup Time (min/batch) Cook Time (min/batch) Lentils 50* *Cooking the lentils requires a cook's time for approximately half of the 50-minute cook time. The remaining time can be used to perform other steps. Note that the stovetop can hold up to four pots at once. Step 2 Setup Time (min/batch) Cook Time (min/batch) Mushrooms 10 6 Onions 10 Step 3 Setup Time (min/batch) Cook Time (min/20 burgers) Cooking Burgers 5 8 Step 4 Setup Time (min/batch) Operation Time (sec/4 burgers) Packaging 5 30 Labeling 12NoBull Burger 2011 Sales $80,000 $70,000 $60,000 $50,000 $40,000 $71,826 $30,000 $46,192 $20,000 $10,000 $24,120 $16,318 $0 1Q11 2Q11 3Q11 4Q11NoBull sold the four-packs of burgers to multiple channels including the Charlottesville City Market, the Charlottesville Whole Foods, Bodo's Bagels, and other local restaurants. While each channel had different costs and negotiated prices associated with it, the most common channels were wholesale (including local mom-and- pop stores, health food stores, and restaurants) and the Charlottesville City Market. For their analysis, the Raymonds assumed a four-pack of burgers currently sold for $6.00 and cost NoBull $4.50 to make. Of that cost, $2.50 was attributable to raw materials, and $2.00 was from labor, rent, and other miscellaneous costs. NoBull's kitchen operated five days per week for eight hours per day. Depending on the weekly demand, NoBull staffed the kitchen with from one to two cooks. At most, two cooks could t in the existing kitchen. The cooks were paid $12.00 an hour. Future Growth Strategy NoBull's current growth strategy was to continue to expand and establish its brand throughout Virginia and the DC area, targeting retailers and restaurants that were similar to its current customer base. NoBull decided to use its existing relationship with the Charlottesville Whole Foods to gain access to additional locations in Northern Virginia. The Raymonds reached out to the Northern Virginia Whole Foods regional manager, and five additional stores in the Northern VirginiaIDC area agreed to stock NoBull burgers. This would allow NoBull to test new markets and to see how well its product could penetrate a more metropolitan area. While accounting for only 3% of its sales in 2011, NoBull expected its sales to Whole Foods to grow to 9% of overall sales by the end of 2012 with this expansion. The company currently sold approximately 20 four- packs of burgers to the Charlottesville Whole Foods each week and estimated sales in each new 1Whole Foods store to be about half of that initially. Overall, the company expected total sales growth of 50% in 2012 over the previous year {Exhibit 4)