Help for a graduate student

Hey everyone, I really hope I can tap into this helpful forum for some help. I’m currently a graduate student at Tarleton State University and I’m taking a Operations Management course. Part of the course involves a project where we are starting a fictional pizza restaurant. I’ve already found great information on this website, but I have a question that I haven’t been able to answer. We have to make the decision to either make dough from scratch or to buy pre-made dough. Now, I have somewhat limited experience in pizza (delivery driver for 2 years 12 years ago.) My inclination is to make it for several reasons. But I need to be able to quantify my decision. Does anyone have any idea of how much pre-made dough might costs. The ideal answer might include the cost savings of using one over the other, but I would take a rough estimate of the costs of using pre-made. Once again, I really appreciate any help that I might receive and look forward to hearing back from everyone.

Sincerely,

Mark Gober

If you search throught this forum the topic has been addressed a few times. Frozen dough balls vs fresh made dough is a matter that requires much more than which is cheaper. Some of the things to look at include but are not limited to:
[list]Space in the kitchen to make the dough (added cost per sq ft on rent)
Cost of the equipment to make the dough
Availible staff to make the dough
Freezer Space to store the frozen dough balls
What are your options when your ability to tell the future fail and you run short of dough (time it takes to make another batch or time it takes to thaw more dough balls)
[/list]

Also, frozen dough will be more consistent unless your staff is trained properly. But then you also do not have much opportunity to differentiate your product unless you make your own.

There are a lot of “hidden” costs when making your own dough that we forget to include when calculating the cost of making a scratch dough. These costs include, just to name a few; overhead, utilities, wages, inventory expense, equipment expenses, etc. The rule that seems to work the best to take these into account is to multiply the raw cost of the dough (ingredient cost) by 2.5. This will give you a fairly accurate “true” cost of your dough. You can then compare this against the cost of the frozen dough to see what the difference will be. Frozen dough will require less inventory space, but it also limits your options. From a reputable supplier, it is quite consistent. And it may or may not be available in the size (weight) pieces you need. Sure, you can always cut them to the weight you need, but that is a lot of extra work, especially with a frozen dough. Contact a couple of ingredient suppliers in your area to find out what the unit cost is for each ingredient, then calculate your cost per ounce, then, get a cost on the frozen dough from a local distributor and calculate the cost per ounce, now you can compare the two for cost differential and stir the pot with advantages/disadvantages for each to get the complete picture.
If you can, let us know what your conclusions are.
Tom Lehmann/The Dough Doctor