MBA 5200 Week 2 DB

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Discussion Question 1 – New Store Nature of Costs: Using five-year financial summary and the prior week’s Chipotle readings for ideas please discuss the fixed and variable costs related to opening a new store.  Please list one item and discuss the behavior of the cost (is it variable, fixed, mixed – what amount variable what amount fixed, or a stepped cost).  A SAMPLE POSTING – the opening of the new store will enable additional sales – these additional sales will require additional food, beverage and packaging expenses – I believe that the expense will be variable and vary as a percentage of sales meaning as sales increase these will increase proportionately.  Please only post one item and allow other students to add to the list or comment on your posting – thanks.

Discussion Question 2 – Adding the Chipotlanes (or drive-thru): Chipotle is currently trying to retrofit its existing restaurants with drive through windows and calling these additions Chipotlanes.  For buildings that cannot accommodate a drive thru, they are building an island in the parking lot that will hold the prepaid food order behind small individual doors that you can open when you enter your security code. How could this development impact revenues, annual operating cost, and what kind of upfront investment do you believe is necessary?  Please discuss either the upfront investment needed, the impact on revenue, or what expenses are likely to increase or decrease because of these Chipotlanes.  Please address only one item and allow other students to add to the list or comment on your posting – thanks.  At the end of your posting please indicate if you believe these “Chipotlanes” will increase or decrease costs/benefits for Chipotle and why.

Discussion Question 3 – Adding a New Product:  Chipotle is currently testing additional menu items like a lower carbohydrate cauliflower rice product (

 (Links to an external site.)

Would you expect this product line extension to have a high or low breakeven point? Why.  Additionally, McDonalds is eliminating several offerings from its menu. What do you believe is behind this move?  Do you believe the cauliflower rice is a good product extension for Chipotle? Why or why not?

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