Using time driven activity based costing and data envelopment analysis together in menu analysis: A case of a fine dining restaurant

Menus are in the center of restaurants exerting a significant impact on almost all the business decisions notably those about production, marketing, purchasing and cost management. Therefore, the key of success in food and beverage organizations lies detailed evaulation of the menus. Within this perspective, the main purpose of the study is to develop a new menu analysis approach that will assist in effective evaluation of the performance of the menu items in commercial food and beverage organizations. Within this purpose, first the most popular and recent approaches in the literature about the menu (Menu Engineering-ME, Time Driven Activity Based Costing-TDABC and Data Envelopment Analysis-DEA) are reviewed comparatively. Then, Considering the cons and prons of those approaches, a better analysis approach was developed. In the study, a case study was conducted in a fine dining restaurant in Antalya and one month operating cycle, September 2013, was take as a basis. The data was collected through observation, interview, document review and visual recording. In the light of collected data, The ME and The TDABC application were performed in Excel. During the process of DEA, it was benefited from the use of EMS 3.1 and DEAP 2.1 package and input-oriented BCC model was conducted. As a result of the study, it was explored that (i) TDABC can be emplyed in the process of menu analysis, (ii) TDABC and DEA can be used together in the the process of menu analysis, (iii) three different menu analysis aproaches produce different results, (iv) menu matrix can be developed with DEA and (v) viewpoint of the guests can be included in the the process of the analysis with plate waste analysis. In this new developed matrix approach, both the perspective of the restaurant and the guest were reflected into the analysis. In this way, the results of the analysis became possible to be used in not only short-term but also long-term decisions of the organizations. These results also indicate that the practitioners must act with caution regarding the results of menu analysis. On the other hand, an effective menu analysis process include comprehesive applications. Therefore, it is recommended to take the support of the experts if it is necessary. Keywords: Menu, Menu Analysis, Time Driven Activity Based Costing, Data Envelopment Analysis, Restaurant Business