Optimizing Inventory Policy for Small Food Business using Probabilitized EOQ Model: The Case of a Lechon Manok (Roasted Chicken) Franchise

Inventory management is crucial for achieving cost efficiency, customer satisfaction, and competitiveness, especially for small food enterprises dealing with perishable goods. This study examines the inventory challenges faced by a lechon manok (roasted chicken) franchise that depends predominantly on intuitive-based ordering method, leading to frequent restocking, elevated setup costs, and susceptibility to demand variability. To enhance its inventory strategy, the Economic Order Quantity (EOQ) model, along with its probabilistic extension incorporating a safety stock-based reorder point, was utilized using actual demand data and spreadsheet simulations. The results indicated that the proposed EOQ policy, with an optimal order quantity of 645 units and a reorder point of 144 units, decreased total inventory costs by 17% relative to the current system, while preserving service reliability and meeting product shelf-life requirements. A sensitivity analysis confirmed the model's robustness across several demand scenarios, highlighting its adaptability to changing market conditions. Future research that would examine or improve the efficacy of the models and application is outlined in this work.