Product Overview

Takshshila, the owner of Sandwichworkz, a trendy restaurant in Ahmedabad, India, is worried about the diminishing profitability of her restaurant. Recent promotional offers increased the footfall, but not profitability. To address this issue, she knows she has to optimize and redesign their menu. She contacts Nick, a restaurant consultant who decides to do an item level understanding of sales and costs. He proposed plotting the menu items in a popularity vs. popularity graph (as per Kasavana Smith model) and making region specific re-engineering decisions. However, he came across a new costing methodology which may affect his recommendations. Which methodology should Nick use? Should Takshshila invest in capturing data for the new methodology?

Learning Objectives

The case can be used in advanced undergraduate or MBA courses in operations, or management, and/or hotel/hospitality management. It presents the opportunity to understand the basics of menu engineering, application of menu engineering strategies (mainly restructuring of the menu including deletion of items, positioning of the menu items on the menu and changing prices) and a comparative analysis of different costing methodologies for achieving a more efficient menu. The major learning from the case is the advantage of using activity-based costing (ABC) over traditional costing methods and its application in menu engineering.