Case Study Coyote Loco Essay example
There are many restaurants tries to increase their revenue nowadays. Restaurants struggled to find the appropriate way to reduce their cost and increase their profit. The restaurant business can be considered similar with the hotel or airline industry, therefore the use of revenue management can be implemented also in the restaurant business. In fact, many restaurants have used various types of revenue management practices, in order to achieve higher profit. However, the application of those strategies seems to be too tactical. Therefore, it is suggested for restaurants to reconsider the use of a broad theory from revenue management which might help the restaurant operators to gain more profit and to successfully …show more content…
Adjusting kitchen capacity is generally more expensive than adding tables, although kitchen output can often be increased by changing the menu or by adding more employees so that the food delivery system become faster and also more food can be prepared (Kimes et al, 1998) in order to exceed the demand. However, since the expense of adding kitchen equipment can be considered very high, therefore the kitchen capacity can be considered to be relatively fixed.
Although service capacity can be increase by adding staff or by reducing meal duration, the limitations of the kitchen and dining room may make that change fruitless. Thus, although restaurant operators can tweak their capacity, it is essentially fixed.
1.2 Demand inventory
Overall demand is composed of the following two customer types: guests who make a reservation and walk-in guests. However restaurant food service must consider the demand from resident versus non-resident guests-both forms of demand can be managed, but different strategies are required. In order to manage and forecast the demand and select the most profitable mix of customer, a restaurant should maintain an information system to compile information on tracking customer