# Hearth & Grain: sixth shop and central kitchen (deck notes)

Deck: `hearth-and-grain-central-kitchen.pptx` (8 slides, 16:9). Previews: `previews/slide-1.png` … `slide-8.png`.
All text, shapes, tables and both charts are native, editable PowerPoint objects. To change chart values, right-click a chart and choose Edit Data.
Every figure's source and arithmetic is in the speaker notes. The brief describes an illustrative scenario, not a real company.

## Slide plan
1. Cover: the decision and the recommendation
2. Decision requested: four headline metrics
3. Today vs proposal: comparison table and operating-profit chart
4. Operating model: diagram of the kitchen supplying six shops, with waste and role effects
5. Investment and payback: investment chart and payback check table
6. Plan: five-step sequence with the pilot and the go/no-go point
7. Risks: table of the three risks from the brief
8. Decision: the resolution, and what to bring back before rollout

## Derived figures (arithmetic)
- Total investment: 650k + 280k = SGD 930k
- Operating profit today: 4.2M × 11% = SGD 462k/yr
- Operating profit in year 2: 5.3M × 14% = SGD 742k/yr
- Operating profit gain: 742k − 462k = SGD 280k/yr
- Revenue gain: 5.3M − 4.2M = SGD 1.1M/yr (+26%)
- Simple payback on the profit gain: 930k ÷ 280k = 3.32 years ≈ 40 months
- Annual benefit implied by the stated 26-month payback: 930k ÷ 26 × 12 ≈ SGD 429k/yr
- Gap between the two: 429k − 280k ≈ SGD 149k/yr
- Baker roles freed: 1.5 × 6 shops = 9, or 1.5 × 5 existing shops = 7.5

## Inconsistency flagged
The brief states a 26-month payback. Using only the brief's revenue and margin figures, payback works out to about 40 months. The deck shows both numbers and marks the basis of the 26 months as TBD (slides 2, 5, 8). It does not choose between them.

## Assumptions
- "Operating margin" means operating profit ÷ revenue for the whole chain.
- The year-2 revenue and margin cover all six shops and include the central kitchen's costs.
- The 9 months runs from board approval to the opening of the kitchen and the sixth shop together.
- The 2-shop pilot starts once the kitchen can produce. Rollout to the remaining shops follows a pilot the board has passed (go/no-go step on slide 6).
- The "What the pilot can show" column on slide 7 describes the evidence each risk would need. No pilot results exist.
- The "To bring back before rollout" list on slide 8 collects this deck's TBDs. The brief does not set these as conditions.

## TBD (not in the brief)
- Basis of the 26-month payback (cash items, ramp-up or base not stated)
- Annual ingredient spend, which is needed to value the cut in waste from 9% to 5%
- Cost per baker role, and whether freed roles are redeployed or removed
- Whether the 1.5 roles per shop apply to 6 shops (9 roles) or to the existing 5 (7.5 roles)
- How much of the year-2 revenue comes from the sixth shop and how much from the existing five
- Size and timing of the 3-month changeover dip
- Pilot length, which 2 shops pilot, and go/no-go criteria
- Thresholds for each risk (on-time delivery, sales change, size of the dip)
- Delivery fleet and route cost for deliveries before 6am
- Risk owners and mitigations beyond the pilot
- Funding source and timing of the SGD 930k spend