Inventory Management and Operations Efficiency

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Chapter 1

THE PROBLEM AND REVIEW OF LITERATURE

Background of the Study

In recent years, buffet restaurants are increasingly getting popular among other kinds. Buffets are effective for serving large numbers of people at once. Diners also see it as advantageous on their part because they get to have a great deal of choice and the ability to closely inspect food before selecting it. A more free form of buffet is called “eat all you can” wherein customers pay a fixed fee and then may help themselves to as much food as they wish to eat in a single meal. Therefore, customers have the privilege to eat to their heart’s content. However, on the part of the restaurant operators and managers, it is difficult to forecast how many people would come and how much one head could eat in a single meal. In case they run out of dishes, they must always be able to refill the buffet. After all, no one likes to get inside a restaurant that is not able to serve the customers well. It may affect customer retention, the level of customer satisfaction and may leave negative impressions on the restaurant’s efficiency. This means that the restaurant should have enough stocks to avoid running out of food to serve. This is now where the role of inventory management takes place.

To ensure availability, an inventory system is adopted that provides the organizational structure and the operating policies for maintaining and controlling goods to be stocked. The system is responsible for ordering and receipt of goods; timing the order placement, keeping track of what has been ordered, and how much and from whom ordered. Regardless of the type of restaurant you operate, or whether the restaurant is in the start-up phase or has been operating for many years, adopting an inventory system is essential. Therefore managing inventory is very important in operating a restaurant.

In the provinces, there are quite a number of eat-all-you-can restaurants that one can find. But in Butuan City, among the most popular is Roldan’s Eat All You Can. It is such a popular place that even locals from the nearby provinces prefer to eat lunch there when they happen to be in the city. Every day they offer variety of foods- from appetizers to desserts which make it irresistible for the customers. On the other hand, in their daily operations they face problems with inventory management such as running out-of-stock and other stock-related problems.

The problem on inventory motivated the researchers to study about the inventory management and operations efficiency of Roldan’s Eat All You Can, Montilla Boulevard, Butuan City.

Review of Literature

The review of related literature is an essential part of the research. This section consists the ideas and studies and of various authors that will be of great help in the conceptualization of the research.

According to Jacobs (2008), an inventory system provides the organizational structure and the operating policies for maintaining and controlling goods to be stocked. The system is responsible for ordering and receipt of goods: timing the order placement and keeping track of what has been ordered, how much and from whom.

Restaurants guests are looking for value when they purchase menu items. In the same way, the restaurant manager is looking for value in the product purchase decisions he/she makes. Price is important but so are other components in the purchasing goal.

During the growth of a new venture the management of inventory is an important task. Too much inventory can be a drain on cash flow since manufacturing, transportation, and storage costs must be borne by the venture. On the other hand, too little inventory to meet customer demands can also cost the venture in lost sales, or it can create unhappy customers who may choose another firm if their needs are not met in a timely manner.

According to Ninemeier (2006), the typical restaurant requires several hundreds of food...
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