Food & Beverage Revenue Management Essay Example | Topics and Well Written Essays - 2500 words

Food & Beverage Revenue Management - Essay Example Established in 2004, Red Bamboo offers a casual and relaxed atmosphere but guarantees an enjoyable dining experience. The star of the restaurant is the food, so people are encouraged to visit in relaxed garments or casual attire. The restaurant is conveniently situated in the heart of Central Dublin's food and restaurant district. The restaurant can conveniently seat around sixty to eighty-five guests and is open seven days a week for lunch and dinner: As in any food business, Red bamboo also encountered problems in controlling yields and revenues, especially in its initial year of operations. The management then decided to use an effective yield management mechanism to address the problems which will eventually affect the overall operations of the restaurant (Kimes, 1989). Yield management is an approach aimed at improving revenues and increasing the course of consumer demand. In order to achieve these goals, yield management utilizes the fundamental stratagem of giving the precise service at the right point in time to the right consumer at the appropriate price (Kimes, 1989). Each segment of this approach entails definite tactical levers that enable the management to come up with an efficient and advantageous yield management plan. The factors that greatly affect the outcome of this strategy are best known as the 4 Cs which are cost, clock, calendar and capacity. Calendar procedures entail control over the timeframe when the transaction/reservation is made. Clock-related strategies rotate on the timing of the service delivered to the customer. Capacity issue is associated with effectively selling seating that is on hand based on the existing demand. Last, cost refers to the appropriate value of the service (Kimes, Chase, Choi, Lee, and Ngonzi, 1998). It is imperative to provide a measurement tool or give definition to the sale which is the outcome of the service provided. For Red Bamboo's case, the management referred to it as available seat per hour or seat/hour (Kimes, 1989). The guiding principle for an effective yield management plan is to take full advantage of the revenue that could be made on the available seat/hour (Kimes, 1989). For purposes of easier identification, management referred to this as REVSH. Being able to quantify in a time-related approach the goal of the process, the management of Red Bamboo then refocused on the specific stratagem levers that will impact REVSH. Among the levers that were initially identified are the following: meal preparation, menu plan/design, operational process, labor setup, etc. Red Bamboo's management first looked into the physical capacity of the restaurant. Red Bamboo conveniently seats sixty persons in its main dining hall, twenty in the bar and when weather permits, can seat around fifteen in an outside patio/area. When the revenue management plan began, Red Bamboo's menu consisted of twelve appetizers, twenty-five entrees and six desserts. In order to ascertain baseline information on mealtime length, arrival sample and REVSH, data was collected on an hourly fashion; though point of sales and observation by the staff. From these collected data, the management then estimated the average periodic meal duration by calculating the standard deviation and variance during meals (Miller, Dopson, and Hayes, 2004). It was found out that the average meal duration of customer was one hour