“Lost Peak Ski Resort” was for many years a small family resort serving skiers from nearby

towns.
“Lost Peak” was recently acquired by “Western Resorts”, a major ski resort operator. The new
owners intend to transform the resort into a holiday resort. As part of this plan, the new owners
would like to make major improvements to the Powder 8 Lodge, the cafeteria located on the resort's
hill. The cafeteria menu is very limited: hamburgers, hot dogs, chili, tuna sandwiches, pizza, potato
chips and packaged snacks. With little competition, the previous owners of the resort felt no urgency
to improve the cafeteria's food service. If skiers wanted lunch on the mountain, the only alternatives
were the Powder 8 Lodge or a brown bag brought from home.

As part of the deal to acquire Lost Peak, Western Resorts agreed to retain all current employees at
the resort. The cafeteria manager, while hard-working and enthusiastic, has very little experience in
the restaurant business. The manager is responsible for selecting the menu, finding and training
employees, and overseeing the day-to-day operations. Kitchen staff prepare the food and wash the
dishes. Dining room staff take orders, serve as cashiers and clean the dining room.

Shortly after taking over Lost Peak, Western Resorts management held a day-long meeting with all
Powder 8 Lodge employees to discuss the future of the ski area and the new management's plans for
the cafeteria. At the end of this meeting, management and employees created a cafeteria balance
scorecard that would help guide operations for the upcoming ski season.

The following performance measures were included in the cafeteria balanced scorecard:

a. Weekly cafeteria sales

b. Weekly cafeteria profit

c. Number of dishes offered on the menu

d. Cleanliness of the dining room as assessed by a Western Resorts management representative.

e. Customer satisfaction with menus as measured by customer surveys

f. Customer satisfaction with service, as measured by customer surveys

g. Average time to order

h. Average time to prepare an order

i. Percentage of kitchen staff with basic cooking training

j. Percentage of dining room staff with basic hospitality training

Work required :

1. Using the above performance measures, create a balance scorecard for the cafeteria. Use arrows
to show causal relationships and indicate with a + or - whether the performance measure should
increase or decrease.

2. Why are financial performance measures not sufficient and should be complemented by non-
financial performance measures?