1. On-Campus Cyber-Café: A Solution to No-Food-No-Drink Computing 73-359 Benefit-Cost Analysis Nov 25 th, 2002 Hsiang Huang Vibha Kagzi

2. Overview Proposal for a change Initiative for project Project description Benefit and cost analysis Demand projection Conclusion

3. What is our proposal? Open a cyber-café at the right hand side of current Highlander café in Resnik Close down the West Wing Cluster “Eat while you work” concept 24 hour operation providing high tech computing and serving coffee and dry foods

4. Why a cyber-café? Initiative 1: Very stringent policies by Cluster Services: “Eating, drinking, and smoking are expressly forbidden in the clusters. This includes both open and closed containers.” (http://www.cmu.edu/computing/clusters/guidelines) Gaming is usually limited and not supported technically

5. Why a cyber-café? Cont’d Initiative 2: Lack of food options at graveyard hours All nighters’ demand for food Most café close before 6pm Most eateries close before midnight or latest until 1am

6. Why a cyber-café? Cont’d Locations Hours Effective Barista Café (UC)Daily 8 a.m. - 6 p.m. LaPrima (Baker)Mon-Thu 8:30 a.m. - 4 p.m., Fri 8 a.m. - 3 p.m. LaPrima (Purnell)Mon-Thu 8:30 a.m. - 4 p.m., Fri 8 a.m. - 3 p.m. LaPrima (Wean)Mon-Thu 8 a.m. - 6 p.m., Fri 8 a.m. - 4 p.m. Skibo CoffeehouseMon - Fri 8 a.m. - 1 a. m., Sat - Sun 5 p.m. - 1 a.m. The UndergroundDaily 11 a. m. - 11 p.m. Current available café options: Skibo Coffeehouse is the only competitor in the hill area

7. Why a cyber-café? Cont’d Initiative 3: Slow and outdated computers in West Wing 16 PowerMac G3/350 10 Sun Ultra 1 Currently only 9% of students use WW clusters Initiative 4: High concentration of students in hill area MM Cluster closed down Initiative 5: Highlander café is not fully utilized

8. Waste of large and centrally located space!!! Highlander dining hall: floor plan

9. Where are we located? Most direct competitors are UC and CFA in the hill area.

10. What will we offer? Introduce an “eat while you work” concept New updated computers: 30 IBM NetVista computers Serve coffee house menu: gourmet bakery, sandwiches, coffee variaties, etc.

11. How will we operate ? 24 hour service only during fall and spring semesters (max. demand) Hire 12 students and 1 manager Purchase furniture, computers and renovate the dining hall Charge a minimum of $3 for cluster users (redeemable for food) Purchase food and drink from Kiva Han

12. What are the benefits? Students: New, cool, fancy place Convenient location Stay up and work with food supply to last 24 hrs service with help staff Job opportunity for students with high pay School Management: Full utilization of space (WW space ???) Showing concern for need of students Provide new and innovative concept for students Create job opportunity for students

13. What are the risks & costs? Very high fixed set up costs Hit or miss: student’s reaction to a cyber café may vary Considerable maintenance costs: computers might be damaged May hurt other eateries on campus Declining demand will require regular innovation and updating of facility

14. Cost breakdown: computers 30 computer systems @ $800 = $24,000 30 Monitors @ $300 = $9,000 15 Headphones @ $40 = $600 1 printer @ $2,000 = $2,000 Total = $35,600 * Figures from student manager of Cluster Services and Modern Language Resource Center

15. Cost breakdown: refurnishing Computer Desks @ $60 = $1,800 Side tables @ $40 = $1,200 Chairs @ $60 = $1,800 Renovate/Remodel facilities = $5,000 Total = $9,800 Silverware and cafeteria counter are already available All figures are from www.amazon.com and www.ikea.comwww.amazon.com www.ikea.com

16. Cost breakdown: Food, staff & mantenance Food costs roughly $4,500 per month (suggestive figure from LaPrima) = $29,250/year Staff: Operational 200 days/year (2 semesters) 12 students @ $8/hr = $416/day 1 manager @ $15/hr = $120/day Total= $107,200/year Maintenance: Surrounding = $300/year Computers = $1,000/year Total= $1,300/year

17. Overall cost projections Total fixed set-up costs: Computers = $35,600 Refurnishing = $9,800 Total = $152,600 Total operational costs/year: Food = $29,250 Staff = $107,200 Maintenance = $1,300 Total = $137,750 Total costs for year 1: $290,350 year 2 - 5: $137,750/year

18. How do we estimate demand? Survey Approach Request students to fill out surveys and project demand based on answers Additional Research and Assumptions Based on information available and logical reasoning we can project demand

19. Other issues to consider Students might not be willing to pay $3 minimum charge At meal hours the WTP might increase Large number of students (92% as per survey by cluster services) own computers – LOW DEMAND? Should we just run a cafeteria?

20. Actions & conclusion Based on the feedback collected from surveys, we will assess: Whether the no-food-no-drink policy is a concern for students WTP of students for food voucher Overall demand projection If yes, we will generate a cash flow analysis and determine a break-even point