What you need to create a supply schedule for a fruit smoothie shop is the price charged, the number of smoothies supplied, and the supply curve of the establishment. Ideally, for a fruit smoothie shop, a supply schedule is a chart that shows how much product the shop will have to produce to meet demand at a specified price based on its supply curve.
In other words, it is a supply graph in spreadsheet form listing the quantity of smoothies and blended fruits that need to be produced at each product price level. Note that this concept is particularly important for businesses especially since they have to understand what happens to their inventory and units sold as the sales price changes.
The management or the owner of the shop can look at the schedule and plan what price they will market the product in the market and how many units they will need to produce at that price point. Although this may sound simple, but it is far from that.
For instance, note that the quantity supplied can be affected by a number of factors including political conditions of the country where the supplier operates, production costs, climatic conditions, prices of substitute and complementary products, etc.
However, if everything is kept equal and the price of a product increases, then the quantity that is supplied of that product will increase. This will indicate a supply curve that will move upward from left to right. Also, note that you will need to draw a new supply curve if anything besides the price or the quantity of the product changes.
Let’s take the example where a new smoothie shop enters the market and this increases the number of products that can be supplied in the market. A new supply curve will be added that has shifted to the right. Technology is one of the leading causes of shifts in the supply curve. The reverse of this can also happen where the supply curve can shift to the left. This occurs when there is a change in the price of the production of a product.
Basic Determinants for a Fruit Smoothie Shop Supply Schedule
Creating a supply schedule for a fruit smoothie shop can be a very difficult task because the schedule never stagnates. Supply is always changing due to several outside factors. Known as determinants of supply, these aspects can affect the supply curve, and the supply schedule you create. The most common determinants of supply include:
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Price Of The Good
According to reports, the average price for a smoothie is around $5 for a small one and $7 for a large one. Fruit and yogurt bowls typically sell around the same price, while juices are around $4 to $7, depending on the size. However, if the shop decides to increase the price of a product, the supply will also increase. This is because businesses want to produce more products at a higher profit, especially if there is an increase in demand.
Number Of Suppliers In The Market
Smoothie bars sell blended fruit drinks, health food bowls, and juices to patrons. They’re typically found in busy shopping centers or fitness clubs as a way to introduce fresh options to a fast-food-laden culture. Note that the more shops serving the same offering, the higher the supply will become. In contrast, if the opportunity cost of producing a product becomes too high, suppliers will leave the market, driving the supply down.
Taxes And Subsidies
Taxes are always part of balancing the general ledger or figuring financial equations such as return on investment (ROI). Depending on the state and locality of your smoothie shop, taxes can increase the cost of production, causing the supply to fall.
If taxes are cut, the supply increases. Meanwhile, Subsidies are a set amount of money given to a company by the government in a particular industry. This capital helps them keep the price low, increase supply or compete with imported goods.
Weather indeed affects those in the agricultural industry, but it also plays a role in the production and supply of other goods, especially ones required to make blended fruits and smoothies. For example, a drought might cause the supply of almonds and apples to fall and the price of production to increase.
If your fruit smoothie shop can sell products that are closely related, you can move production to the product that you can make in large quantities. For instance, if your shop makes fruit bowls and jamb juices, you can shift to making more jamb juices when the price increases, meaning the supply of fruit bowls decreases.
Business Expectations And Forecast
You might have to produce financial forecasts and expectations for the coming year or quarter. These forecasts tend to play a critical role in supply. If these projections show an upcoming demand for a product, your shop might increase production to meet these expectations. If the demand is falling, your smoothie shop may decrease supply.
Factors of Production
Factors of production often fall in the blanket term “overhead.” Note that increased costs of raw materials, local regulations, increased wages, or a change in the cost of utilities can cause supply to increase or decrease.
Improvements in Technology
Have it in mind that technology plays a vital role in demand, especially in terms of automation or new production processes. For instance, a company that has an excellent research and development team might discover new, more cost-effective ways to produce a good. This would cause an increase in supply.
To efficiently run a fruit smoothie shop, it helps if the owner has some type of restaurant experience, whether it is casual, fast food, or formal. Owners will need to master the logistics of ordering, payroll, and advertising as much as they will need to understand which berries are in highest demand. Much of owning any food establishment will be staying ahead of customer expectations and creating new demand with inventive menu options.