Does using an à la carte or combo set menu affect the performance of a teppanyaki-style restaurant?

Purpose: The purpose of this study is threefold: to use an innovative metafrontier-to-data-envelopment analysis (MDEA) model incorporating multiple outputs and inputs - including the item revenue, gross profit, food costs, time-driven labor costs, and other operating expenses (OOEs) - to distinguish four quadrants based on efficiency and profit to offer different strategies to the restaurateur under study; to compare the proficiency levels of the different meal categories of the à la carte and combo set menus using the metatechnology ratio (MTR) via the MDEA; and to use slack-based analyses with simulation to improve the financial performance of a teppanyaki-style restaurant. Design/methodology/approach: Six months of point of sale (POS) data are obtained from a teppanyaki-style restaurant. The proposed inputs are categorized into total food costs, total labor cost, the number of processes, and OOEs. Two outputs (total revenue and gross profit) are used to assess the efficiency of the menu items. The MTR is used to differentiate the proficiency level of the heterogeneous meal categories and to create four quadrants based on the efficiency index and financial performance. Findings: The MTR is lower for the combo set category than for the à la carte category. Four quadrants are obtained based on the efficiency and financial performance to provide further menu suggestions. The MDEA analysis yields menu suggestions that could enhance the overall efficiency and profitability of the menu items. A simulation using these two models is conducted and shows that the restaurant profitability would be 22 percent greater using the MDEA than using the menu engineering model. Research limitations/implications: Because there are no publicly listed teppanyaki-style restaurants in Taiwan and it is difficult to find the same menu in different restaurants, this study consists of only a single restaurant, and the results may not be generalizable to other types of restaurants. Originality/value: This paper contributes to menu analysis by establishing an efficiency index and using financial performance as criteria for determining which menu items to improve in a teppanyaki-style restaurant. The MTR of the metafrontier model can differentiate the proficiency level of the heterogeneous categories, such as à la carte and combo set menus. This paper offers empirical results pertaining to the classification of menu items and describes a slack-based analysis for improving menu items.