DETERMINING THE OPTIMAL ORDER QUANTITY FOR A NOODLE RESTAURANT AND BEVERAGE SHOP: A CASE STUDY OF ABC, PHITSANULOK PROVINCE

Abstract

     The ABC food and beverage shop, selected as a case study, faces challenges in raw material procurement and inventory management due to the differing shelf lives of ingredients used in food and beverage preparation. The existing purchasing process relies primarily on demand estimation based on the purchaser’s experience, which has resulted in excessively frequent ordering, overstocking beyond actual requirements, and occasional shortages that disrupt operations and generate unnecessary losses. Therefore, the development of an efficient and appropriate raw material procurement plan is essential to address these issues. This study aims to analyze raw material demand in order to determine appropriate Reorder Points (ROP) and calculate the Economic Order Quantity (EOQ) for the case study shop. The objective is to improve inventory management efficiency by comparing the actual total inventory management costs incurred by the business with those derived from an EOQ-based procurement plan. The results indicate that suitable reorder points can be clearly established for the case study shop, which previously lacked systematic criteria for purchasing decisions. The EOQ analysis reveals that both food and beverage ingredients should be ordered less frequently but in larger quantities per order to achieve greater efficiency in total inventory management costs. Overall, the findings demonstrate that applying ROP and EOQ theories to determine raw material quantities and annual ordering frequency can significantly reduce the total inventory management costs of the business.