about 200,000 people. According to both Yelp and Trip Advisory, it is the highest restaurant in town. Randy had been having trouble with inventory management (he runs out some items while others go bad) and has brought you in as a consultant to help, due your background in inventory management. The menu at the restaurant changes monthly, and there are daily specials. Randy follows what other restaurant Owners are doing to improve their bottom line-he reads trade publication and online blogs. He also tries to keep up with trends in other industries that may help him manage better. He recently read about the success small-jobs have had with many managing inventory as A,B or C. As Randy thinks about his business, it is really a job shop, since food is prepared after the consumer orders from the menu. The food is prepared to customer tastes and requirements. He is not exactly sure if an ABC inventory plan will work in his restaurant, but has hired you to provide recommendation. All the ingredients used in the dishes are either dried or fresh. Nothing frozen or processed is put in the food. Customers can request alterations in menu items during ordering. A detail of the inventories at the restaurant are as follows: Used for additional flavoring of foods at the table. Can be stored for a long periods of time. There are five different condiments available, and multiple tables may need the same condiments at the same time. These items represent less than 0.5% of food costs. Spices and dried fruits. Used in most dishes and can be stored for long periods of time without compromising the taste of the items. There are about 50 different spices and fruits that are stocked. Some can be distributed for others. These items represent less than 5% of the food costs for the various dishes. Used to prepare items and as an ingredient in some dishes. Have shelf lives of one week to one month. There are 10 different oils that are stocked. Two or three can be substituted, but the others have a unique taste. These items represent about 10-15% of the food costs and preparation costs of the various dishes. Fresh vegetables and herbs. Have a shelf life of two days to one week. These items are delivered in a truck that comes twice a week, but in some cases have to be ordered a week in advance. In an emergency, these items can be found at a local grocery store. These items represent 10-70% of the food costs of the various dishes, depending on if the dish contains meat. Fresh fruits. Have a shelf life of two to four days. These items are unique to the dishes on the menu. They are not usually found in a local grocery store, but in a pinch someone can drive an hour to distribute to pick them up, if in stock. These items are delivered twice per week. They represent about 10% of the food costs. Have a shelf life of two to four days. These items are unique to the dishes on the menu. They are not usually found in the local grocery store , but are available from a distributor, if in stock. These items are delivered twice a week. They represent up to 60% of food costs. Have a shelf life of one week. These items are usually delivered three times per week and can also be found locally at a grocery store. The items represent less than 5% of the costs of the food items. Questions : What are the advantages and disadvantages of having an ABC inventory plan at the restaurant? What items would you classify in each category? Are stockouts are acceptable in this type of business? Why or why not?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Inventory Problem at Three Spoons Market
Randy is the owner of Three Spoons Market. Three Spoons Market is an upscale tapas restaurant in a town of about 200,000 people. According to both Yelp and Trip Advisory, it is the highest restaurant in town. Randy had been having trouble with inventory management (he runs out some items while others go bad) and has brought you in as a consultant to help, due your background in inventory management. The menu at the restaurant changes monthly, and there are daily specials.
Randy follows what other restaurant Owners are doing to improve their bottom line-he reads trade publication and online blogs. He also tries to keep up with trends in other industries that may help him manage better. He recently read about the success small-jobs have had with many managing inventory as A,B or C. As Randy thinks about his business, it is really a job shop, since food is prepared after the consumer orders from the menu. The food is prepared to customer tastes and requirements. He is not exactly sure if an ABC inventory plan will work in his restaurant, but has hired you to provide recommendation. All the ingredients used in the dishes are either dried or fresh. Nothing frozen or processed is put in the food. Customers can request alterations in menu items during ordering. A detail of the inventories at the restaurant are as follows:
- Used for additional flavoring of foods at the table. Can be stored for a long periods of time. There are five different condiments available, and multiple tables may need the same condiments at the same time. These items represent less than 0.5% of food costs.
- Spices and dried fruits. Used in most dishes and can be stored for long periods of time without compromising the taste of the items. There are about 50 different spices and fruits that are stocked. Some can be distributed for others. These items represent less than 5% of the food costs for the various dishes.
- Used to prepare items and as an ingredient in some dishes. Have shelf lives of one week to one month. There are 10 different oils that are stocked. Two or three can be substituted, but the others have a unique taste. These items represent about 10-15% of the food costs and preparation costs of the various dishes.
- Fresh vegetables and herbs. Have a shelf life of two days to one week. These items are delivered in a truck that comes twice a week, but in some cases have to be ordered a week in advance. In an emergency, these items can be found at a local grocery store. These items represent 10-70% of the food costs of the various dishes, depending on if the dish contains meat.
- Fresh fruits. Have a shelf life of two to four days. These items are unique to the dishes on the menu. They are not usually found in a local grocery store, but in a pinch someone can drive an hour to distribute to pick them up, if in stock. These items are delivered twice per week. They represent about 10% of the food costs.
- Have a shelf life of two to four days. These items are unique to the dishes on the menu. They are not usually found in the local grocery store , but are available from a distributor, if in stock. These items are delivered twice a week. They represent up to 60% of food costs.
- Have a shelf life of one week. These items are usually delivered three times per week and can also be found locally at a grocery store. The items represent less than 5% of the costs of the food items.
Questions :
- What are the advantages and disadvantages of having an ABC inventory plan at the restaurant?
- What items would you classify in each category?
- Are stockouts are acceptable in this type of business? Why or why not?
- Would the creation of more work-in-process or finished goods inventory be beneficial to the owner? Why or why not?
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