Multi-factor menu analysis using data envelopment analysis

The matrix approach has remained the predominant menu analysis method in recent years and has been embraced by operators in all segments of foodservice. As numerous researchers note, this method, while popular, accommodates only a limited number of variables. Moreover, labor costs are often ignored since such costs are difficult to assign to individual menu items with a sufficient degree of accuracy.;The purpose of this study was to develop a menu analysis model that incorporates labor using labor attributes expressed as categorical terms as a first step toward the development of a comprehensive menu analysis model. To this end, qualitative and categorical attributes of labor were matched with each menu offering of a moderately priced, full-service restaurant. Since the ultimate goal of menu analysis is to develop a menu that facilitates the ideal mix of items, the role of key operating statistics such as gross profit and popularity was also considered on an item-by-item basis. As for model development, data envelopment analysis (DEA) was adopted, which has never been used in such an application, to evaluate the true efficiency of each menu item based on the aforementioned inputs and outputs.;Realizing that this is the initial stage in incorporating both labor attributes and DEA into menu analysis the results of this study are promising. Although DEA has been used to examine food service facilities at a unit level it has never been explored as a tool to evaluate micro-components of an operation. Nor has the premise of using attributes of labor to capture production costs of menu items been examined in previous menu analysis models. From a practical application perspective the model is not complete. This study was the initial stage in developing a comprehensive menu analysis model that not only incorporates labor but that has the potential of including a variety of relevant factors of menu item success.