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In: Operations Management

Discuss how inventory levels can impact queuing theory for food or alcohol distribution (Compare food trucks,...

Discuss how inventory levels can impact queuing theory for food or alcohol distribution (Compare food trucks, fast food and sit down restaurants).

Solutions

Expert Solution

In food or alcohol distribution, one the major aspects of concern is the shell life of products. A majority of food and beverages come with a shell life and must not be used after date of expiry. It is the duty of the food and alcohol business to keep track of the shelf life of its inventory. For this reason, queuing theory is employed in inventory level management of food and restaurant industry.

There are 2 scheduling principles of queuing theory that can be put into practice in inventory management of restaurants, food trucks and fast food outlets:

  • FIFO
    • Stands for First In First Out
    • Applicable for inventory management of perishable goods i.e. goods that have smaller shelf life
    • Items are rotated in a way that the first in item is utilized first
  • LIFO
    • Stands for Last In First Out
    • Applicable for inventory management of those goods whose price keeps on fluctuating
    • The newest entry product in the inventory is utilized first

Queuing theory can be used to efficiently management inventory levels in food and restaurant industry. In food trucks, the level of inventory must be adequately maintained to efficiently serve customers with minimal wait time. In food trucks and fast food serving outlets, usually a machine line service is done. So, the management of inventory level is very critical for their success. In restaurants, the variety of food is more as compared to food truck and fast food outlets. Hence they have to deal with an array of perishable and non-perishable products. Restaurants can maintain 2 segments in their inventory-one for perishable products where we apply FIFO and one for non-perishable goods, where we apply LIFO. This way, efficient management of resources can be done and service quality can be maintained.


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