Operations Management: Sustainability And Supply Chain Essay


Discuss about the Operations Management for Sustainability and Supply Chain.



Revenue management within the hospitality industry is considered among the vital concepts that are responsible for business success (Wang and Brennan 2014). For this reason, revenue management strategies are necessary to be applied to industry business. Revenue management exists in the hospitality industry that intends to promote successful revenue management strategies, which will lead to considerable revenue increase. The objective of the report is to evaluate the revenue management practices of a restaurant “Gingerboy” and explain the revenue management theory or strategies implemented by the restaurant. Description will also be provided on the restaurant’s direct competitors and their effect on demand elasticity and its strategies of revenue management.

Description of the business and its competitors

Ginger boy is one of the iconic Melbourne restaurants popular for its funky decorations, Asian-inspired dishes as well as hip laneway location (Ginger boy Fine Dining Melbourne 2016). This particular restaurant serves creative street food based around plates for sharing. They have experienced chefs namely Teage Ezard and Chris Donnellan. They aim at taking unique as well as bold approach for delicious food of the region. Ginger boy Streetwise is famous hawker-styled food meeting the best interest of the customers. They present in fine Australian with an idiosyncratic Asian twist for the same (Ginger boy Fine Dining Melbourne 2016).

Dining experience of Ginger boy mainly focus on modern Australian adaptation especially of the Asian hawker-style street market food (Walker and Walker 2012). This particular Melbourne restaurant is fast-paced, dynamic environment as well as youthful influencing over dining culture of Southeast Asia. However, in that case Asian marketplaces revolve around having Asian sense of color and fun. Ginger boy has sales turnover of over 150 million per year and employees over 1500 in more than 12 cities.

Menus at Ginger boy

Menus are written in accordance with season. Major approach of Ginger boy revolves colder months like braising, steaming and cooking curries in clay pots with deep flavors. This particular restaurant uses each ingredient that will come with flavor, appearance as well as color and quality. This particular approach used by the restaurant comes as a philosophy in delivering great dishes to the potential customers (Sloan, Legrand and Chen 2013). Ginger boy has unique business model pertaining in the hospitality industry. This particular restaurant has high reputation in Melbourne CBD that aims in providing high quality food and services in meeting the customer expectation.


Ginger boy major competitor is Red Spice Road. Red Spice Road based in Melbourne and has customer limits conditions. They hold customer membership programs affecting elasticity of demand (Ginger boy Fine Dining Melbourne 2016).

There are various factors affecting significant change in revenue as well as managing demand of Ginger boy and Red Spice Road. Products and services of the restaurant are served to the potential customers for retaining in the global marketplace. It is necessary for Ginger boy in minimizing the weakness and produces products with the change in tastes, preferences as well as attitudes and behaviors (Kang, Lee and Yoo 2016).

Ginger boy has made strategies so that they can occupy the topmost position in the upcoming financial years. It is for this reason why Ginger boy has funky and unique d?cor for attracting the potential customers. Peak times usually are during the festivals and summers. People mostly show interest in visiting Ginger boy restaurant because of warm welcome by the staff members working at that place (Ginger boy Fine Dining Melbourne 2016). This restaurant puts proper emphasis in retaining its existing customers, as it is cost-effective in comparison with new customers. Existing customers should be given top-priority because if they like the food, place, they will recommend to their family and friends. This will overall be beneficial for the generation of profits for Ginger boy. This study majorly brings out the major importance of conducting revenue and yield management analysis at Ginger boy. Every restaurant aims at profit maximization with cost minimization and minimum usage of available financial resources at the same time (Ginger boy Fine Dining Melbourne 2016).

Yield and Revenue Management Factors

The crucial elements in the yield and revenue management strategy that can boost the revenues of the restaurant Ginger Boy can be associated to the length of the time the guests expend their time at the dinner table of the restaurant. However, the “Witch of the West” mentions about the way the time spent by the guests at the dinner table of the restaurant can be increased (Line and Runyan 2012). The revenue management of the company can take into account the capacity of the restaurant, expected demand and the appropriate cost and pricing framework for the restaurant Ginger Boy. The comparatively fixed capacity of the restaurants can be assessed for the restaurant business Ginger Boy in the Melbourne CBD. The assessment of the capacity of the restaurant can be carried out by taking into consideration the seating arrangement, size of the kitchen, menu items and the levels of staffing (Tranter 2012). The management of Ginger Boy can also consider optimization of the revenue of the business concern by filling the available seats and turning the dining tables as fast as possible. However, the capacity of the restaurant can be restrained by the kitchen and the design of the menu of the restaurant or else by the potential of the members of the staff of the organization (Ogut and Onur Ta?? 2012). The Seating capacity of the restaurant Ginger Boy is also relatively constant over a specific period and needs to have the flexibility to crowd a dining table with additional seat when required (Zhang and Bell 2012). The review the revenue management of Ginger Boy reveals the fact that the additional capacity of the restaurant in the form of the tables as well as seats might possibly be lower than many other businesses that make use of the revenue management. The addition of the capacity of the kitchen of the business concern Ginger Boy can be considered more expensive than the strategy of adding additional tables. The assessment of the revenue and yield management of the Ginger Boy also reveals the fact that the output of the kitchen can be increased by altering the design of the menu and by increasing the members of the staff in order to ensure that greater quantity of food can be prepared. The revenue management can also be increased by adding the members of the staff by decreasing the duration of the meal but the limitations of the capacity of the kitchen of restaurant business might perhaps make the alterations unproductive. Therefore, in order to ensure better utilization of the capacity of the restaurant, the operators of the business need to tweak the existant capacity that essentially remains fixed (Zhang and Bell 2012). Another factor of the revenue management of a restaurant like Ginger Boy is the predictability of the demand. The operators of the business need to forecast the demand for the products and services of the corporation in order to manage the revenue by compiling information such as the percentage of reservation, walk-in as well dining time of the guests. Another factor of the revenue management that can be taken into consideration is the suitable structure of the cost as well pricing framework (Tranter 2012). The restaurant Ginger Boy like many other restaurants has comparatively high fixed costs and lower variable cost. Therefore, the restaurants need to generate higher levels of revenue in order to cover the variable costs incurred by the firm (Tranter 2012).

Descriptions Tools of yield management used by Ginger Boy:

Revenue management:

Ginger boy usually connects the revenue management by providing discounts but it should be noted that discounts is only a part of revenue administration. When “Ginger Boy” uses this tool of revenue management the managers of the restaurant thinks beyond the happy hours and they develop methods in order to offer differential prices, which makes sense for degree of demand, generated at given period. “Ginger Boy” on few of the occasions uses price fencing in order to provide discounts on that inventory, which the restaurants thinks that it might not be sold off (Kimes 2013). While on the other hand, with the implementation of strategy it prohibits customers who were going to buy anyway perhaps now taking advantage of the discounts, which they did not initially seek.

The process of fencing implied by “Ginger Boy” consists of set of rules as long as they make sense to the customers. In contrast “Ginger Boy” offers menu prices which are similar to those of the other restaurants regardless of the customers demand characteristics. Perhaps the question which “Ginger Boy” is currently dealing with is the whether the restaurant could implement some pricing strategies to attract differential customers in busy times. For example, it offers special prices for those customers, which are frequent in dinner clubs. The restaurants on the other hand use the demand management program, which is based on the part-time customers on sensitive pricing strategies (Heizer et al. 2016). Restaurant operators take into the considerations by following the attributes of developing price fences for physical characteristics such as table location, party size and the amenities. While on the other hand, it also consists of the intangible rate fences, which includes the group of member’s at the time of meal or reservation for party.

Ginger boy does not favors the notion of charging high prices from its customers but makes the use of informal differential pricing procedure which is followed in many of the restaurants in order to attract more customers.

It should be noted that using the method of revenue management and fencing procedure for the purpose of intangible rate fencing in order to shift the demand from busy time to slow periods in order to attract more customers. By undertaking the procedure of fencing the restaurants aims to reward its regular and dependable customers so that it can schedule the highest margin, business during the busiest times (Ivanov 2014). The tools used by the restaurant for yield management helps in meeting the excess demand in most of the restaurants in the markets. Managers of “Ginger Boy” in most of the occasion offer discounted prices to the customers in order to fill up the empty seats during the slow hours. However, the ultimate aim of adopting the revenue management is to determine that the discounts should fit with the overall strategy of the “Ginger Boy”. As long as the managers cover the variable cost of the meals, the tools are considered as profitable for the restaurants.

Relevant Strategies Not Employed By Ginger boy

“Ginger boy” restaurant have efficiently realized the demand fluctuation and accordingly have applied certain effective revenue management strategies that will increase overall revenue of the restaurant during the peak time as well as in the lean time (Wang 2012). Though “Ginger boy” has implemented several effective revenue management strategies that have resulted in its business success, there exist certain relevant revenue management strategies those are not yet employed by the restaurant. Few strategies if employed by the restaurant can offer the business with increasing revenues, which are mentioned below:

“Ginger boy” can employ segment customer strategy through employing rate fences. The resultant is observed to have some price sensitive consumers those have fixed income and have a family with children (Wang and Brennan 2014). This consumer group intends to alter their dining time to obtain discounts. “Ginger boy” experiences high sales during weekends and for this reason, it can use rate fence to convince consumers to visit their restaurant on weekdays to attain lower prices for their food and services (Guo et al. 2013).

Duration management strategy can also be implemented by “Ginger boy” restaurant. It is observed that consumers tend to have their lunch or dinner for longer time. On weekends, the restaurant has full capacity that facilitates it to achieve high revenue (Guo et al. 2013). For this reason, the restaurant requires to decrease time for which consumers occupy seats. For being this strategy to be effective, “Gingerboy” requires modifying the definition of the meal consumption duration of the consumers, decrease arrival uncertainty, limit uncertainty related with the duration an decrease the amount of time spend on each consumer meals (Ferguson and Smith 2014). This strategy is expected to increase the revenue of the restaurant.


The report had considered Ginger boy restaurant located in Melbourne CBD as a case study in order to evaluate the relevance of revenue management. In addition, the evaluation has facilitated the understanding of the restaurant’s business operation in consideration to revenue management aspect, associated theory and the capability to recognize where and how the restaurant has implemented desirable revenue management strategy for revenue maximization. The paper also explained certain important revenue management strategy that if employed by Ginger boy restaurant can facilitate the company to increase its revenue and become highly capable to offer adequate demands of the market.

Reference list:

Ferguson, M. and Smith, S., 2014. The changing landscape of hotel revenue management and the role of the hotel revenue manager. Journal of Revenue and Pricing Management, 13(3), pp.224-232.

Gingerboy Fine Dining Melbourne. (2016). Gingerboy. [online] Available at: [Accessed 27 Aug. 2016].

Guo, X., Ling, L., Yang, C., Li, Z. and Liang, L., 2013. Optimal pricing strategy based on market segmentation for service products using online reservation systems: An application to hotel rooms. International Journal of Hospitality Management, 3(5), pp.274-281.

Heizer, J., Render, B. and Munson, C., 2016. Principles of operations management: sustainability and supply chain management. Pearson Higher Ed.

Ivanov, S., 2014. Hotel revenue management: from theory to practice. Zangador.

Kang, K.H., Lee, S. and Yoo, C., 2016. The effect of national culture on corporate social responsibility in the hospitality industry. International Journal of Contemporary Hospitality Management, 28(8).

Kimes, S.E. and Beard, J., 2013. The future of restaurant revenue management. Journal of Revenue and Pricing Management, 12(5), pp.464-469.

Kimes, S.E., 2013. Revenue management: Advanced strategies and tools to enhance firm profitability.

Line, N.D. and Runyan, R.C., 2012. Hospitality marketing research: Recent trends and future directions. International Journal of Hospitality Management,31(2), pp.477-488.

????t, H. and Onur Ta??, B.K., 2012. The influence of internet customer reviews on the online sales and prices in hotel industry. The Service Industries Journal, 32(2), pp.197-214.

Sloan, P., Legrand, W. and Chen, J.S., 2013. Sustainability in the Hospitality Industry 2nd Ed: Principles of Sustainable Operations. Routledge.

Tranter, K.A., 2012. An introduction to revenue management for the hospitality industry: principles and practices for the real world. Pearson Education India.

Walker, J.R. and Walker, J.T., 2012. Introduction to hospitality management. Pearson Higher Ed.

Wang, X.L. and Brennan, R., 2014. A framework for key account management and revenue management integration. Industrial Marketing Management, 43(7), pp.1172-1181.

Wang, X.L., 2012. Relationship or revenue: Potential management conflicts between customer relationship management and hotel revenue management. International Journal of Hospitality Management, 31(3), pp.864-874.

Zhang, M. and Bell, P., 2012. Price fencing in the practice of revenue management: An overview and taxonomy. Journal of Revenue and Pricing Management, 11(2), pp.146-159.

How to cite this essay: