Leah Pfrommer

DIET 4415
Dietetic Management Project: Return on Investment
30 March 2021

New Oven
Center School, East Hampton, CT

Introduction/Purpose/Need
The COVID-19 pandemic has presented many challenges to the East Hampton Public
School District. One of these challenges is providing food to the families while in the midst of a
hybrid academic model. Currently, East Hampton School District’s Center School provides 125
lunches per day for families which are all bagged lunches that contain both hot and cold foods.
Center School has only one oven that prepares the hot foods that are provided in the lunches.
Recently, this oven has been in need of repairs more and more frequently. If this oven were to
continue breaking down at the rate that it is, eventually the price of a new oven would breakeven
with the continued costs for repairs of the current oven. This oven is necessary because without
it, the kitchen would only be able to serve cold foods to the students in which case the Food and
Nutrition Director, Jennifer Bove, estimated that lunch purchases would go down by about 50%,
leaving only 63 purchased lunches.
When discussing the overall benefit of purchasing a new oven, it was acknowledged that
not only would the food service department lose a significant amount of money if the oven went
down, but many of the kids would not want to eat the all-cold food, so the students that really
need the food (the free and reduced-eligible students) might not be able to receive it. If purchases
went down by 50%, then those that are packing lunches from home are likely packing less
nutritious foods. The lunches served by the school include a protein, a carbohydrate, a fruit,
vegetable, and a milk. If packing lunch from home, the students’ lunches will most likely not
include all of these necessary and nutritious dietary components. To add, the packed lunches also
likely have less food in them when compared with the lunches served by the school. It is the food
service department’s mission to attend to both hunger and wellness for the students, and the oven
breaking down would have deleterious effects on the student population.
The food service operation has several guidelines and industry standards that a new piece
of equipment must meet in order to be eligible for purchasing. The oven needs to be a double-
deck convection oven, powered by gas, NSF certified, and must be able to fit full-sized 18” x 26”
sheet pans.

Resources Expended
*Calculations can be found in attached Excel spreadsheet

In order to determine whether or not it would be worth it to purchase a new oven, I

calculated how many days it would take after the oven broke down until the loss of revenue
equaled the cost of a new oven. According to the Food and Nutrition Director, under normal
conditions there are 125 lunches sold daily at Center School. Of these 125 lunches, 60% of them
are free or reduced (75 students), with a reimbursement rate of $3.58/lunch. This means that 40%
of the lunches are regular price (50 students) at a $3.00 reimbursement rate. To determine total
revenue under normal conditions, I multiplied 75 students by a $3.58 reimbursement rate and
added that to the 50 students multiplied by the $3.00 reimbursement rate. The total revenue
under normal conditions came to $418.50/day. According to Jen, if the oven went down at
Center School, the percentage of lunches would be cut by 50%, because she predicts that half of
the students that previously bought lunch would not want to buy an all-cold lunch. If half the
students buy lunch, that leaves 63 lunches. The Director also mentioned that the percent of free
and reduced would go up to 80% because that population most likely wouldn’t stop getting
lunches, leaving 20% at the regular price. The total revenue from regular lunches, in this case,
would be $38/day and from free or reduced $180.43 for a total revenue of $218.23/day if the
oven went down. I subtracted $218.23 from the previous revenue of $418.50 and got $200.27
which would be the total revenue loss/day if the oven went down.
Research was done to decide which oven would be best to use for Center School’s kitchen.
Many factors were taken into consideration when deciding on which oven would be best to
purchase such as price, number of 18” x 26” sheet pans it can hold, the overall rating, and the
BTU. The search narrowed down to two ovens, 1-Vulcan VC44GD for $8,050 and 2-Garland
MCO-GS-20-ESS for $11,119. Three quotes were gathered for each oven and these were the
cheapest options. A second oven was considered because it was larger meaning it could hold
more sheet pans, and it had a stronger BTU so it would heat up faster. After discussing with Jen
about which one would be the best option, it was clear that spending about $3,000 more on an
oven that holds more sheet pans and heats up faster would not be the best choice. Center School
provides 125 lunches/day, so the extra space in the larger oven would not be used. As for the
higher BTU, Jen explained that they would not utilize the rapid heating up process because they
do not cook different foods at different temperatures, especially right now. Currently, one of the
decks on the oven in the kitchen is being used to cook and the other deck is being used as a
warmer. If a warmer is needed, it is only $800 so to spend $8,050 on the less expensive oven
plus the warmer for $800, it would still be less expensive than to buy the $11,119 oven.
Other expenses that were considered included employee changes. If the current oven broke
and the kitchen went down to all cold meals, the employee costs would lessen because rather
than needing 2 full-time employees, there would only be a need for 1 full-time and 1 part-time
employee; however, this would not happen initially because if the kitchen went down to all cold
meals it would take a while for the participation to drop off until the staffing changes occurred.
Although this factor was taken into consideration, it was not included in the ROI calculation.
Another reason why salary was not included in the calculation was because there are 2 current
union full time employees and Jen would not be able to suddenly cut their hours.

Outcomes
*Calculations can be found in the Excel sheet attached

As the tables show, without the new oven, on average 63 lunches would be sold per day
at Center School resulting in a loss of revenue of $200.27 per day. The cost of the new oven is
$8,050 and so the breakeven point where the revenue lost equals the cost of the new oven is
about 40 days. The ROI is a positive percentage after day 40, so it would only take about 2
months to breakeven with an oven that costs $8,050. Of course, the number of lunches purchased
from day to day will vary and so this number of days until breakeven may also vary but, based
on the average number of lunch purchases per day, this seemed like the most accurate depiction
of a breakeven point.

Summary and Conclusions

In conclusion, when looking at revenue loss if the oven were to break down in
comparison to the price of a new oven, the purchase of a new oven is proven to be a cost worthy
investment. The benefits of purchasing a new oven outweigh the cost because it would take only
40 serving days to breakeven and realize a positive ROI, where the cost of the new oven would
equal the amount of revenue lost. A non-monetary benefit of purchasing the oven is that the
more students purchasing hot and cold lunches means more children will be fed, particularly the
students eligible for free and reduced meals. Studies have shown that fruit and vegetable intake
among school-aged children is below recommended levels, particularly among low-income
children or those eligible for free and reduced lunches. School meals offered through the
National School Lunch Program can provide an important contribution to child fruit and
vegetable intake [1], therefore emphasizing the importance to continue serving Center School’s
students both hot and cold lunches. All meals served by Center School follow the USDA
guidelines so we can assure that the children are eating nutritious, quality food.

Appendix A

Vulcan VC44GD - Double Deck Gas Convection Oven

Specifications [2]:
  Voltage: 120V (required for fan) with 6' cord and plug
 Horsepower: Two-Speed 1/2 HP Oven Blower Motor
 BTU: 50,000 per hour/per section. 100,000 BTU total.
 Gas Type: LP or Natural Gas
 Oven cool switch for rapid cool down
 NSF Listed

References

[1]
Robinson-O'Brien R, Burgess-Champoux T, Haines J, Hannan PJ, Neumark-Sztainer D.
Associations between school meals offered through the National School Lunch Program
and the School Breakfast Program and fruit and vegetable intake among ethnically diverse,
low-income children. J Sch Health. 2010 Oct;80(10):487-92. doi: 10.1111/j.1746-
1561.2010.00532.x. PMID: 20840658; PMCID: PMC3707281.
[2]
“Central Restaurant.” 40"W- Central Restaurant Products,
www.centralrestaurant.com/Vulcan-VC44GD---Double-Deck-Gas-Convection-Oven-
FREE-KIT-c105p25012.html.