Case Study: Farmer's Restaurant Essay

1214 Words Jul 26th, 2015 5 Pages
1. Describe the importance of inventory management as it relates to the Farmers Restaurant.

In addition to inventory management being important to Farmers Restaurant, it is important to business in general. Since Farmers Restaurant is a full-service restaurant, it must have effective management with its inventories in order to properly serve its customers. It is important for that to be the case so that there will be desirable customer satisfaction and customer return. In the case that customers visit the Farmers Restaurant and are unable to receive the food they want due to a stock out, they may be dissatisfied and will likely not return to Farmers Restaurant. Besides customer satisfaction, total food costs are important to business
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573). Inventory management is an attempt to balance inventory needs and requirements with the need to minimize costs resulting from obtaining and holding inventory. Considering these two solutions, the single solution model is the best solution for Farmers Restaurant. Evaluating the advantages and disadvantages of the given solutions, single period model is appropriate since the business is involved in food services. If the company uses the fixed-order-interval method, it cannot check dependably for spoilages and stock outs since the nature of the model does not correct constantly on the totaling of inventory of the goods. As opposed to the single-period model, there is a proper distribution for shortage costs which happened as a problem in the case due to a high demand and for spoilage costs which happened when a large number of goods are left unused and as a result become expired.

3. Given the following information, provide an example of how much of Farmers Sausage Gravy Mix should be ordered. You are doing the order for Thursday. Also, Kristin would like a service level of 95% and you have found that there is a standard deviation of 3.5 units per week, and a moving average weekly demand of 35