Controlling in Business

Video Link: https://www.viddler.com/embed/b4a21553/?f=1&;autoplay=0&player=full&disablebranding=0

This video features Tom and Eddie’s, an upscale hamburger restaurant in the Chicago area. Started in 2009 at the height of the recession, the partners had difficulty securing bank financing, so they financed the operation themselves with the help of a third partner. The partners had long and successful careers as executives with McDonald’s and, recognizing the importance of the financial function, they hired another former McDonald’s executive as CFO.

At the time of the video, Tom and Eddie’s had 3 restaurants and wanted to expand to 10 stores and then franchise the operation. There are many considerations in planning and opening new restaurants, including the demographics of the area, the square footage of the surrounding commercial space, ease of access and even the design of furniture and equipment. The restaurants incur “known” costs, such as rent, payroll, taxes, utilities and other recurring costs, and cash flow is important in managing these costs because of the significant “unknown factor”, which is sales. Tom and Eddie’s also uses a very technology-intensive inventory management and control system because of the perishable nature of the ingredients used by the restaurants.
With clear, insightful critical thinking, write an essay responding to the following:
In planning its restaurants, how did Tom and Eddie’s use feedforward control? Cite examples from the video.
Consider the different types of budgets discussed in the textbook chapters. Which type of budget appears to be the most important to Tom and Eddie’s CFO?
Why is inventory control important to Tom and Eddie’s?
Consider your own work or school environment. What control systems are in place and are they categorized as feedforward control, concurrent control, or feedback control?
Write your answers in a two-three page paper using APA format.