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Originally Posted by aceventura3
I certainly understand people not wanting to respond, etc. but the thought that the scenerio is not true to life or unreasonable strikes me as a bit odd.
The begining analysis of any business problem begins with a review of historical information and making assumptions about the future. I don't know how some of you would make your business decisions, but the way I make mine is to assess my costs and income and build a proforma income statement. This is exactly what was in the OP, in a simplified form.
Perhaps some of you can tell me how you would have made the OP more realistic. Otherwise, I will conclude that you simply want to avoid the embarassment of answering the questions I presented.
[snipped for some brevity]
Just to be clear. Regardless of the OP, assumptions, simple business problems, etc. - I ask this question:
If you have to address labor costs, how do you do it?
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It's not true to life because being forced to address labor is an artificial limitation.
And I don't think it's a sincere question, respectfully. Because you have not offered your own solution. I am more curious as to how you would resolve the problem, rather than as to how you would pick apart someone else's attempt to tackle this (IMO) poorly stated problem. It feels like you already have a "liberal" response in mind and are waiting to pounce on it.