Goal of controlling production volume
To determine and produce the number of portions that is likely to be sold on a given day / period of service
Controlling production volume steps
- Analyze sales history
- Forecast portion sales
- Determine production quantity
Data mining
Pulling useful information out of a large quantity of data, revealing patterns and preferences from the sales history
Popularity Index
The ratio of portion sales for a given menu item to the total portion sales
When the popularity index is calculated for a single period it is?
Sales mix or Menu mix
The popularity ratio is more valuable at determining an item’s popularity than the
Raw number of portions sold
Forecasting portion sales
A process that combines both data and intuition to predict what will happen in the future
Steps in forecasting portion sales
- Predict anticipated sales volume
- Include surround conditions
- Forecast sales for each menu item
- Be flexible
- Have forecast reviewed
Predict anticipated sales volume
Total customer anticipated for a day / Period of service
The difference between planned versus actual
Variance
Inventory is typically done
Monthly
Cost of Food Issued =
Opening inventory + Purchases - Closing Inventory
Five ways to assign value to units of inventory
- Actual purchase price method
- First-in, first-out method
- Weighted-average purchase price method
- Latest purchase price method
- Last-in, first-out method
Actual purchase price method
- Human error messes this up
- Can be done if the prices are somehow recorded on items
First-in, first-out method
- Prof thinks this is the best, but second most used
- Assumes food inventory has been properly rotated during the period
Weighted-average purchase price method
- Single unit value is determined by finding an average value representing all units in inventory, combining purchase price and volume
Latest purchase price method
- Uses the latest price paid
- Easy, fast, and widely accepted
Last-in, first-out method
- A method that could be used if managers wanted to show higher costs
Last-in, first-out method
- A method that could be used if managers wanted to show higher costs
Steward sales
Minus
- Employees who purchase food at cost through the operation
Gratis to bars
Minus
- Non-revenue generating food produced to promote beverage sales
Promotion expense
Minus
- Reduction in cost of food because sales revenues are unaffected
What do you add to get cost of food consumed?
- Cooking liquor
- Transfers in from other units
What do you minus to get cost of food consumed?
- Food to bar
- Transfers out to other units
- Steward sales
- Gratis to bar
- Promotion Expense
