A chain of two fast food restaurants located in the city of Valencia is specialized on chicken burgers and wings, among many other dishes. These restaurants have been gaining popularity thanks to their products’ quality and promotional strategies.
The past two months, the owners of the restaurants decided to launch sales on some of their dishes, but only for those that could be order online via delivery system. Usually, these sales were notified on weekends to each of the restaurants’ managers, among of the type of dishes that would be affected by the discount, in order for them to organize while placing orders to the suppliers (normally these discounts lasted from Monday to Friday night). The supplier’s schedule for taking orders from restaurants is up to Monday at 12 o’clock, so they prepare the orders to arrive on Tuesday. Taking this into consideration, normally the managers place the orders on Sunday noon, since the restaurants open their door at 12 o’clock and they won’t have time to place it the same Monday.
An issue occurred last month, when the owners, instead of notifying the weekly discounts on weekend, they notified it on Monday of the same week that the discounts will be available. Because of this, the managers placed the order basing on a regular demand, when the actual demand during the whole week was almost twice as they calculated. As a result, the managers had to bought resources from retail stores because they were already consuming the safety stock they had, ending with an increase of costs, and some dishes were taken out from the menu during that week because there were resources that could only be bought from suppliers (e.g. fries, cheese sticks).
Source: own source.
The blog of Logistics at MGEPS at UPV 