Managing Non-Traditional Inventories
Within the service industry, companies will typically have two types of inventory, traditional inventory and non-traditional inventory. For a restaurateur it is essential that they have certain management systems in place, which assist with the management of both types of inventory. These inventory management systems for traditional and non-traditional inventories are critical for a restaurant to be successful and profitable. When dealing with a restaurants traditional inventory, managers are focused on the challenges of dealing with a highly perishable product, food. Since the raw materials for restaurants have a limited shelf life and usually expire within the first week, restaurant managers must have active control systems that assist with food costs, the largest expense for all restaurants. If restaurants are able to successfully manage their traditional inventory, they are most likely a profitable business; however, restaurants could still be passing up opportunities if they do not manage their non-traditional inventories. The non-traditional inventories for restaurants are the “products available for sale”, which are the space for customers to sit at tables. Restaurant owners should consider each table space as their main product, because without the table space full-service restaurants will not exist. In order for a restaurant to be not only profitable, but also successful, managers should monitor their tables as if their customers were temporarily renting the space for a meal. For them to manage the tables, they should scrutinize the turnover rate of tables. This refers to the number of times a table is used to serve new customers, therefore, the higher the turnover rate of the tables, the greater the cash flow for the restaurant. This is the reason the fast food industry is a multi-billion dollar industry, as they have an exceptionally high table turnover rate compared to a fine-dining restaurant....
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