diff --git a/app/Http/Controllers/OrderController.php b/app/Http/Controllers/OrderController.php
index fd54ceb..9439f74 100644
--- a/app/Http/Controllers/OrderController.php
+++ b/app/Http/Controllers/OrderController.php
@@ -478,8 +478,11 @@ public function update(Request $request, Order $order)
             $totalCommission = 0;
 
             // 4. Process NEW Items
+            $variantIds = collect($validated['items'])->pluck('id');
+            $variants = ProductVariant::with('product')->whereIn('id', $variantIds)->get()->keyBy('id');
+
             foreach ($validated['items'] as $itemData) {
-                $variant = ProductVariant::with('product')->find($itemData['id']);
+                $variant = $variants->get($itemData['id']);
                 
                 // Stock Check
                 if ($variant->quantity < $itemData['quantity']) {
diff --git a/phpunit.xml b/phpunit.xml
index d703241..4216f86 100644
--- a/phpunit.xml
+++ b/phpunit.xml
@@ -19,6 +19,7 @@
     </source>
     <php>
         <env name="APP_ENV" value="testing"/>
+        <env name="APP_KEY" value="base64:5ySMp2mTack7W9o1mEJ6d3GgGkTmKQF+EsWOruzXp40="/>
         <env name="APP_MAINTENANCE_DRIVER" value="file"/>
         <env name="BCRYPT_ROUNDS" value="4"/>
         <env name="BROADCAST_CONNECTION" value="null"/>
diff --git a/tests/Feature/OrderUpdatePerformanceTest.php b/tests/Feature/OrderUpdatePerformanceTest.php
new file mode 100644
index 0000000..ad08546
--- /dev/null
+++ b/tests/Feature/OrderUpdatePerformanceTest.php
@@ -0,0 +1,120 @@
+<?php
+
+namespace Tests\Feature;
+
+use Illuminate\Foundation\Testing\RefreshDatabase;
+use Tests\TestCase;
+use App\Models\User;
+use App\Models\Category;
+use App\Models\Product;
+use App\Models\ProductVariant;
+use App\Models\Order;
+use App\Models\Unit;
+use App\Models\Customer;
+use Illuminate\Support\Facades\DB;
+
+class OrderUpdatePerformanceTest extends TestCase
+{
+    use RefreshDatabase;
+
+    public function test_order_update_performance()
+    {
+        // 1. Setup Data
+        $user = User::factory()->create();
+
+        $category = Category::create(['name' => 'Test Category']);
+        $unit = Unit::create(['name' => 'Test Unit', 'short_name' => 'tu']);
+
+        $product = Product::create([
+            'name' => 'Test Product',
+            'sku' => 'TP-001',
+            'category_id' => $category->id,
+            'unit_id' => $unit->id,
+            'selling_price' => 100,
+            'quantity' => 1000,
+            'alert_quantity' => 10,
+        ]);
+
+        $variants = [];
+        for ($i = 0; $i < 10; $i++) {
+            $variants[] = ProductVariant::create([
+                'product_id' => $product->id,
+                'unit_id' => $unit->id,
+                'sku' => 'TP-001-V' . $i,
+                'selling_price' => 100,
+                'limit_price' => 80,
+                'quantity' => 100, // Initial quantity
+                'alert_quantity' => 10,
+            ]);
+        }
+
+        $customer = Customer::create([
+            'name' => 'Test Customer',
+            'mobile' => '1234567890',
+            'address' => 'Test Address',
+            'city' => 'Test City',
+            'country' => 'Sri Lanka',
+        ]);
+
+        $order = Order::forceCreate([
+            'order_number' => 'ORD-001',
+            'user_id' => $user->id,
+            'customer_id' => $customer->id,
+            'order_date' => now(),
+            'customer_name' => 'Test Customer',
+            'customer_phone' => '1234567890',
+            'customer_address' => 'Test Address',
+            'status' => 'pending',
+            'order_type' => 'direct',
+            'total_amount' => 0,
+        ]);
+
+        // 2. Prepare Payload
+        $items = [];
+        foreach ($variants as $variant) {
+            $items[] = [
+                'id' => $variant->id,
+                'quantity' => 2,
+                'selling_price' => 100,
+            ];
+        }
+
+        $payload = [
+            'order_type' => 'direct',
+            'order_date' => now()->format('Y-m-d'),
+            'customer' => [
+                'name' => 'Test Customer',
+                'mobile' => '1234567890',
+                'address' => 'Test Address',
+                'city' => 'Test City',
+            ],
+            'items' => $items,
+            'payment_method' => 'cod',
+            'call_status' => 'pending',
+        ];
+
+        // 3. Measure Queries
+        DB::flushQueryLog();
+        DB::enableQueryLog();
+
+        $response = $this->actingAs($user)->putJson(route('orders.update', $order->id), $payload);
+
+        $response->assertStatus(200);
+
+        $queryLog = DB::getQueryLog();
+        $queryCount = count($queryLog);
+
+
+        // Assert query count is significantly reduced (e.g. < 45)
+        // Baseline was 66.
+        $this->assertLessThan(45, $queryCount, "Query count should be optimized (was 66, expected < 45)");
+
+        // Assert stock decrement
+        foreach ($variants as $variant) {
+            $this->assertDatabaseHas('product_variants', [
+                'id' => $variant->id,
+                'quantity' => 98, // 100 - 2
+            ]);
+        }
+    }
+}