Did you solve the problem?  The example answer shown here is only a target figure and there may be other ways to estimate.

The point of the answer is:

 

• Are there any detailed definitions in order to enter the specific numerical values?

• Does this way stand to reason with the Fermi estimate?

 

These are the points to note.  The first point mentions that logical thinking is required in order to make an estimate.  The estimate loses credibility when the numerical values are randomly entered and calculated, even if it is close to the actual numerical values.  The second point is that if you are estimating sales, the estimate has to be competent in order to consider the sales increase.

 

On the previous page, the sales increase was considered as to raise the utilization rate of the time periods which is other than the time period of the busiest hours.

 

However, what if the number of customers were defined as a variable percentage of all students who are in certain campus of the university?  Even if the proper numerical values were calculated, it is difficult to think about the way to increase the cafeteria sales from it.  If the definition was to increase the percentage of all students who come to the cafeteria, it would not be specific enough to find out the exact necessity.

 

Based on the points to note mentioned above, let’s see the example answer.

１.Verify the precondition.

• “Your town” defines Kobe city where the author resides.

• The population is about 150 million.  It is a quite large city.

• “The Ramen shop” defines as it is located in Sannomiya in central Kobe.

• “The sales” defines as the sales per day on weekdays.

• Sannomiya is a commercial district.  Therefore, the customers are considered to be businessmen.

 

２.Determine how to approach.

Sales=Average price per customer × Number of customers.

Number of customers=Capacity × Utilization rate × Turnover rate × Hours of operation.

 

３.Make estimate models.

 

 

 

 

 

 

 

 

 

 

 

Hours of operation: It is divided to 5 cases.

Capacity: The ramen shop is assumed to be medium size.

Utilization rate: The numerical values were entered according to the assumption of the high ratio of busiest hours, supper hours, and late night supper hours.

Turnover rate: Due to the high turnover rate of ramen shops, the average length of stay per customer is considered to be 30 minutes.

 

Price: Price per customer is assumed to be different between a daytime customer and a nighttime customer.  Therefore it is divided to 2 cases.

 

The case of daytime (11:00~18:00):

A bowl of Ramen is assumed to be 700 yen. Some customers order a side dish as well.  Usually one customer in four orders a side dish.  A side dish price is assumed to be 200 yen. Therefore, price per customer in daytime would be 700 + 200 ÷ 4=750 yen.

 

The case of nighttime (18:00~24:00):

Some customers might order alcohol.  It is assumed one in five customers to order alcohol and the price is assumed to be 500 yen.  Therefore, price per customer at night would be 750 + 500 ÷ 5=850 yen.

 

４.Calculate.

• Sales of daytime (11:00~18:00).

Number of customers=(1 × 50 × 0.3 × 2) + (1 × 50 × 0.7 × 2) + (5 × 50 × 0.05 × 2)=125

Sales=125 × 750=93,750 (yen)

 

• Sales of nighttime (18:00~24:00).

Number of customers=(3 × 50 × 0.4 × 2) + (3 × 50 × 0.6 × 2)=300

Sales=300 × 850=255,000 (yen)

 

From the results of :

93,750 + 255,000=348,750 (yen).

 

５.Compare with the actual numerical values:

According to a 2009 Cambrian Palace report, annual sales per store of famous franchise stores are from 80 million yen to 90 million yen.  The calculation of 90 million yen to sales per day would be 90 million yen ÷ 365 days=246,575 yen.  Accordingly, this exercise estimation has a difference of about 100,000 yen.  When the cause is considered, any of hours of operation, capacity, utilization rate, turnover rate, price, is possibly estimated too high.  The common sense would be that hours of operation, turnover rate, and price are reasonable, therefore the problem would be either capacity or utilization rate.  The common sense would be that hours of operation, turnover rate, and price are reasonable or higher in some extent, therefore the problem would be either capacity or utilization rate.  It means that the capacity is smaller or the utilization rate is not as high as it was estimated.  It seems even the famous franchise stores do not have so many customers.  These numerical values are nationwide average.  Therefore, in this case of Kobe which is a big city, the sales has a possibility of being higher than average.

 

In addition, Ippūdō has been achieving overwhelming splendid results among famous franchises, and the annual sales per store is 170 million yen.  Sales per day is 170 million ÷ 365 days=465,800 yen.