Cover image for chicken rice case study

Forecasting Demand at a Chicken Rice Restaurant

Plan Smarter, Waste Less, and Serve Just Right

Overview:

The purpose of this analysis is to forecast demand for high-demand items such as steam chicken rice and barley, with a focus on optimizing ingredient preparation, staffing, and inventory management. By analyzing customer behavior and sales patterns, this report aims to help the restaurant reduce waste, ensure fresh ingredients, and improve overall operational efficiency.

Key Results:

  • Daily Demand for Steam Chicken Rice and Barley:
    • Steam chicken rice has a higher and more volatile demand, with an average daily demand of 15 units, while barley demand averages 4-6 units.
    • Ensure 20-25 portions of steam chicken rice are prepared each day, with additional buffer stock for weekends when demand spikes. Barley should have a steady stock of 6-8 units daily.
      • Line chart showing daily demand
  • Average Customer Spending:
    • The average spending per customer is RM23.27, with most customers spending between RM16 and RM30. However, a small number of large orders (up to RM143) suggest occasional group orders.
    • Use RM23 as a baseline for daily revenue targets. Bundle menus in the RM25-30 range to encourage higher spending, while ensuring enough stock to handle large-value transactions.
      • Histogram of customer spending
  • Weekday vs. Weekend Demand:
    • Sales on weekdays are almost double that of weekends, suggesting higher customer traffic during weekdays, likely due to office workers or regular routines.
    • Increase staffing and prep during weekdays to accommodate higher sales. For weekends, scale down inventory orders to reduce waste, while experimenting with new menu items or promotions.
      • Bar chart 1 Bar chart 2
  • Fluctuations in Daily Demand:
    • Demand for steam chicken rice fluctuates significantly, with daily variation averaging 7 units. Barley shows more stable demand with lower fluctuations (2.6 units).
    • Plan for fluctuations in steam chicken rice demand by keeping buffer inventory and flexible prep schedules. Barley can be stocked consistently due to its stable demand pattern.
      • Line chart of fluctuations
  • Typical Week Demand Simulation:
    • The simulation suggests that steam chicken rice demand increases steadily from Monday, peaking on the weekend, while barley sees modest peaks on Tuesday and Saturday.
    • Use simulations to plan ahead, especially for peak demand periods from Friday to Sunday. Prepare extra ingredients and staffing for these busy days.
      • Line chart of weekly demand simulation

Goals Alignment:

The restaurant aims to improve operational efficiency by predicting demand accurately, managing inventory smartly, and minimizing waste. This analysis supports these goals by:

  • Optimizing Inventory Management: By forecasting demand for key items like steam chicken rice and barley, the restaurant can avoid overstocking and under-preparation.
  • Improving Staff Planning: Understanding the peak demand periods, particularly on weekdays, allows for better staffing decisions, ensuring sufficient staff during busy hours.
  • Enhancing Profitability: By bundling meals and offering promotions, the restaurant can increase customer spending and revenue, helping it achieve sustainable growth.

Impact:

  • Operational Efficiency: The insights allow the restaurant to plan prep schedules and inventory based on accurate demand forecasts, reducing food waste and ensuring fresh stock.
  • Revenue Growth: By focusing on high-demand days, promoting value meal bundles, and managing customer spending patterns, the restaurant can increase revenue while maintaining cost-effectiveness.
  • Customer Satisfaction: Accurate forecasting ensures that customers always find their favorite dishes available, contributing to a better dining experience and encouraging repeat visits.

Data Interpretation:

  • Fluctuating Demand for Steam Chicken Rice: The high volatility in steam chicken rice sales is likely due to factors like the popularity of the dish, the portion size, and possibly even the day of the week. There is higher demand for this dish during the weekend, as customers may prefer larger meals during their off-days.
  • Stable Barley Demand: Barley demand is lower and more stable, likely due to its role as a secondary or complementary item in the meal. As such, it doesn't experience the same level of fluctuation as the more central dish of steam chicken rice.
  • Spending Patterns: The average spending of RM23 suggests that most customers are purchasing either a single meal or a small combo. The occasional high-spending customers (e.g., group orders) could significantly impact overall sales, making it crucial for the business to be prepared for occasional large orders without running out of stock or delaying service.
  • Weekday Demand: Weekdays show significantly higher total sales than weekends, likely because of regular weekday customers, office workers, and business lunches. The fact that sales volume is similar across weekdays and weekends in terms of average items per transaction, but with much more foot traffic on weekdays, suggests that promotions or menu adjustments for weekends could help boost sales.

Contextual Factors:

  • Customer Behavior: Regular customers, particularly office workers, likely contribute to the weekday sales spike. Offering deals or discounts targeted at weekday customers could increase their visit frequency.
  • Economic Conditions: Changes in the economy or disposable income could affect customer spending, especially larger-value orders, and may require the business to adjust its pricing or promotions accordingly.

Recommendation:

  • Focus on Steam Chicken Rice Preparation: Prepare 20-25 portions of steam chicken rice daily, with additional buffer stock on weekends to account for demand spikes. This will help ensure there’s always enough stock and reduce the risk of running out.
  • Adjust Inventory for Barley: Maintain a steady inventory of 6-8 units of barley daily to meet the relatively stable demand. There is no need to overstock, which will help reduce waste and optimize costs.
  • Staffing and Prep for Weekdays: Increase staffing and prep for weekdays, especially during lunch rushes and office hours, to handle the higher volume of customers. On weekends, staffing can be scaled down, focusing on testing new menu items or promotions.
  • Promote Value Meal Bundles: Create meal bundles priced between RM25–30 to encourage customers to spend slightly more, leveraging the average spending pattern. These bundles can also be designed to include steam chicken rice and popular drinks, ensuring a more attractive offering.
  • Weekend Promotions: Consider offering promotions or discounts for weekend sales to boost business during typically slower days. This could include meal deals or special weekend-only items that align with customers’ preferences.

Conclusion:

The analysis of customer behavior at the chicken rice restaurant provides valuable insights into demand patterns, customer spending, and optimal operational planning. By forecasting demand for steam chicken rice, adjusting inventory for barley, and tailoring staffing and promotional strategies for weekdays and weekends, the restaurant can improve its efficiency, reduce waste, and increase revenue. These data-driven recommendations will help the business make informed decisions, optimize operations, and ultimately enhance the customer experience.