Search results

Profiles the development of menu‐engineering models and, in particular, the movement supporting the quantification of all costs associated with the production of a menu item. Reports the findings of a study of upscale restaurant menu planners. While all menu planners adopted elements of menu engineering when planning menus, most rejected the opportunity to factor in non‐material direct costs as a major component of determining menu content and prices. In particular, individual dish labour cost was not considered an important menu‐planning criterion. Dishes which attracted low sales, but which planners felt added interest to the menu, were included on the menu. This supports the view of most advocates of quantitative menu analysis that the profitability of individual dishes on the menu is only one of several important criteria when designing the menu.

This paper aims to examine whether using menu engineering (ME) together with activity-based costing (ABC) for menu analysis provides new insights into true menu profitability. The traditional ME approach only uses food costs to determine the contribution margin (CM) of individual menu items. This combined approach uses both food and traceable operating costs to estimate CMs more accurately.

An improved ME model was developed and tested in an oriental restaurant in Brazil. Direct observation of restaurant activities allowed most costs to be traced (not simply allocated) to individual menu items.

The results revealed small differences in the rankings between the traditional approach and ABC/ME, demonstrating that the integration of ABC with ME made it to possible to identify increased food-costs and lower CMs for all groups of menu items. The results also show that ABC methods are applicable to an oriental-style restaurant.

Just one restaurant and only 80 per cent of the menu were examined in this study. Future research should apply the model used here to other restaurant types located in different geographical areas to validate the approach.

The results suggest that ME can be improved upon by first assessing variable costs using ABC methods.

This paper combines two different analytic techniques (ME and ABC) into a new approach that reveals the true picture of profit and loss for a menu from a restaurant in Brazil.

This research paper aims to examine whether using menu engineering (ME) together with activity‐based costing (ABC) for menu analysis gives new insights about true menu profitability. The traditional ME approach only uses food cost to determine the contribution margin of individual menu items. This combined approach uses both food and traceable operating costs to estimate contribution margins more accurately.

An improved menu engineering model was developed and tested in a buffet restaurant in Hong Kong. Direct observation of restaurant activities allowed most costs to be traced (not simply allocated) to individual menu items.

The results found that only three of 20 dinner menu entrées were profitable. This unique insight would not have been possible using traditional ME methods alone. The results also showed that ABC methods are applicable to a buffet‐style restaurant.

Only a single restaurant and only the dinner menu were examined in this study. Future research should apply the model used herein to other restaurant types located in different geographical areas in an effort in order to validate the approach.

The paper suggests that ME can be improved upon by first assessing variable costs using ABC methods. Thus, the extra effort required to apply ABC in a restaurant appears to be worthwhile.

The paper combines two disparate analytic techniques (ME and ABC) in a new approach that reveals a menu's true profit and loss picture. The paper also makes several modifications to the traditional ME approach.

The purpose of this paper is to develop a multi‐dimensional, holistic model that: avoids the variable interdependency found in earlier tools; and integrates multiple factors that characterize menu item costs more accurately by considering more than gross profit.

Using data gathered during a three‐month period from three same‐brand units of a full‐service chain restaurant firm, the paper applies data‐envelopment analysis (DEA), a non‐parametric approach that accounts for both controllable (discretionary) and uncontrollable (non‐discretionary) variables, producing a single relative‐to‐best index based on an efficiency rating calculated on a 0 to 1 scale.

The findings suggest that the DEA‐equipped model, which is not constrained by the limitations of traditional matrix approaches, supports a more robust approach by incorporating more cost determinants than traditional menu engineering approaches.

The paper consists of only a single restaurant concept and the evaluation results are purely theoretical. Future research should include the application of the menu analysis recommendations to an actual menu to determine the effectiveness of the model on actual operation profitability.

The research suggests that DEA is an effective tool in the evaluation of a restaurant menu by evaluating individual menu items based on attributes of labor and profitability factors.

The paper shows that by combining DEA with traditional menu analysis methodologies, a more efficient menu analysis tool may be utilized to evaluate menu items without the arbitrary allocation of non‐food costs.

The purpose of this study is to show how using value management (VM) together with activity based costing (ABC) for menu analysis helps managers to estimate contribution margins more precisely and to analyze customer satisfaction. This new approach is considered an appropriate tool for guiding and directing the process of making decisions.

In this research a case study is employed to examine whether the application of the ABC/VM approach can improve the decision‐making process in a Tunisian à la carte restaurant. Data were collected over the period of a month using direct observations of restaurant activities to calculate profitability, and a questionnaire was administered to determine customer satisfaction.

The results show that six of 11 menu items were profitable. The results also show that managers should analyze profitability and customer point of view simultaneously in order to inform the decision‐making process.

Only a single à la carte‐style restaurant and the dinner menu was examined in this study. Future research should apply the model to other restaurant types in order to validate the model.

The paper suggests that using activity based costing with value management can enhance the quality of the decision‐making process. It demonstrates to managers how they can reduce their costs and improve resource allocation, taking into consideration customer needs and satisfaction.

The paper combines two analytic techniques (VM and ABC) that reveal a menu's true profit and loss picture and a menu item's value.

Managing food service operations to achieve a specific food cost percentage has long been a fundamental principle of the restaurant business. Management bonuses and other rewards are often based on achieving these predetermined goals. Available tools such as menu engineering and contribution margin, although sound in theory, are not frequently used. Demonstrates the use of menu engineering and contribution margin concepts in terms of customers served. Concludes that the goal of any restaurant should be to apply marketing techniques based on menu engineering and contribution margin concepts in order to achieve the highest possible financial results.

We design experimental economies based on a New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model. We apply shocks to tastes, productivity, and interest rate policy, and measure the persistence of these shocks. We find that, in a setting where goods are perfect substitutes, there is little persistence of output shocks compared to treatments with monopolistic competition, which perform similarly irrespective of whether or not menu costs are present. Discretionary central banking is associated with greater persistence than automated instrumental rules.

The purpose of this paper is to examine how firms respond to adverse supply shocks.

This paper examines a supply shock within the framework of Mankiw's Menu Cost Model.

The analysis in this paper illustrates that the type of adverse shock is important. An immediate increase in the money supply may work well in response to a negative aggregate demand shock, but be counter‐productive in response to a negative supply shock. This paper finds that output will decrease when the Federal Reserve increases the money supply in response to an adverse supply shock.

The implication is that when the Federal Reserve first spots a negative supply shock (such as an increase in oil prices), it should not immediately respond with an increase in the money supply. Doing so might cause a recession.

When there is a negative supply shock, conventional wisdom holds that an increase in money supply can offset the decrease in output that would occur without a policy response. That is, increases in money supply have the exact opposite influence that most economists often suppose.

In the Indian context with an extended phase of high food inflation impacting the hospitality sector, there is a need for coping mechanisms to protect the business bottom line and maintain revenue growth. This need is even more pronounced within the budget restaurant segment. There is limited research that identifies the approach and innovative practices that food and beverage profit centers (hotels and restaurants) can deploy to handle the impact of the identified macroeconomic variable. The purpose of this paper is to probe the general approach and innovation that the budget segment may have used to survive the impact of a sustained increase in prices of food products and related raw materials.

A qualitative approach is adopted for this investigation, through a mix of in‐person or telephone interviews with operating managers (F&B manager, restaurant manager and chefs). The feedback from these sources provides an understanding of the responses of the budget segment to the stated issue of inflation in food products. The qualitative approach generates a spectrum of responses that helps to document some of the best practices that yielded good results, allowing the broader segment to emulate the same.

The research helps owners and operators to draw from innovative practices and approaches used to deliver improved fiscal performance in terms of managing food cost, without adversely impacting customer experience and overall business profitability.

There was a possibility that no clear indicators would emerge from the feedback, nonetheless the experiences that are documented through this research open doors for further research into innovative practices in managing food and beverage costs for improved profitability.

The budget food and beverage sector in the Indian context has been dealing with high inflation of 14 ‐ 18 per cent on the supply side. A mix of strategic choices including passing the additional cost to end users, compromises in the form of diluting product quality or quantity (portion size) or unique process changes are also possible responses.

This paper lists best practices and also evaluates if there is any commonality emerging from the segment in terms of the “right approach” to manage food cost under prevailing inflationary conditions.

The paper aims to examine the activity‐based costing (ABC) method as a feasible and appropriate tool for the casino and hotel industry to apply to support kitchens in order to eliminate the monthly allocation of overhead based on variable costs.

Data were collected at a support kitchen in a Las Vegas casino. These data were analyzed by using ABC methods and establishing ABC costs. ABC methods were compared to traditional allocation methods to determine, first, if allocations could be eliminated entirely; and, secondly, to establish if some outlets would be significantly impacted by the accounting change.

An ABC approach can be applied to support kitchens and total cost (ABC) can be estimated. This approach allowed the casino to eliminate traditional allocation methods based solely on food cost.

ABC was shown to be a powerful technique that can be applied effectively in a support kitchen of a casino. Since this paper involved only a single support kitchen in a single casino, further research should be conducted to confirm that ABC can also be applied in support kitchens in other hospitality industry settings.

The use of ABC techniques confirmed that the ABC process is a useful tool in an effort to abolish allocations and can be applied to the remaining support kitchens. Without the benefit of this paper, restaurant management for individual food and beverage outlets received an unfair share of the overhead and did not have appropriate cost information for bread products.

ABC may be a powerful technique when applied effectively to the food and beverage operations in the field of hospitality.