Reliability Where reliability is concerned, two areas are of importance. These are the reliability of the product or service and the reliability of the vendor. To help ensure that you select a product or service that is reliable, insist that your potential vendor share with you a list of current customers who can be contacted for information about the reliability of the products they have purchased. Unfortunately, at this time, there are no rating systems in place for hospitality-related technology items. Perhaps there should be. Until that time, the experience of others, as well as your own knowledge, will be important factors in assessing the reliability of the new technology products and services you select. Vendor reliability is also very important. There is no more consequential consideration when electing to integrate a new technology than the quality of the vendor supplying that technology. While a variety of factors can influence vendor reliability, the following are worthy of close examination. Location Generally, the closer the location of the vendor to your operational unit(s), the more successful you will be in establishing a solid relationship with him or her. Long-distance contact can work, but only if the vendor is highly motivated and has field representatives who can quickly come onto your site if needed. Experience While even Microsoft was once a start-up company, in general it is best to deal with technology suppliers who have an established record of accomplishment. If you do select a company that is very new, perhaps due to a significant technological development, realize that the failure rate of technology start-ups, like restaurants, can be very high regardless of the product’s quality. Quality of Service Staff If a problem develops, it will be the quality of the service/repair department, not the vendor’s sales department, that will be of most importance to you. Before selecting a technology vendor, insist that you meet with the service person(s) responsible for your account. Ask the questions needed to ensure that the service provider understands your business well enough to help you work through any integration problems you may encounter. Response Time Response time is critical when your system is down. Regardless of the warranty in place, service response time, rather than who is to pay for that service, can be of critical importance. Be cautious if the service person provided by your vendor works as an independent contractor or for a company not directly related to the one from which you are buying. Subcontracted service can be acceptable, but is often a sign that you may have difficulty acquiring a prompt response to potential prob488 CHAPTER 12 USING TECHNOLOGY TO ENHANCE CONTROL SYSTEMS
lems. The best technology companies provide their own service representatives and in a timely fashion. Reputation Perhaps the most important factor in selecting a technology vendor is the same one your guests use when evaluating your foodservice operation. The reputation of your vendor is as critical to you as the reputation of your own facility and, in fact, will be tied together in the eyes of your guests. Honesty, integrity, and a willingness to stand behind their promises are characteristics that you should seek in all vendors, but especially those involved in technology integration. As is also true in purchasing foodservice equipment, reliability in your technology products can make the difference between a successful integration and an unsuccessful one. Be sure that you purchase a reliable system from a reliable vendor who provides reliable service! Monitoring Advances in Cost Control Technology It is simply not possible to immediately know about every software, hardware, or communication advance that could directly affect your business. You can, however, stay abreast of the commercial application of these advances. And it is important that you do. Your choices for continuing education in this area are varied and depend on your own preferences, but most foodservice managers can choose from one or more of the following methods: 1. Trade shows/professional associations 2. Publications 3. Current vendors 4. Competitive vendors 5. Technology-related classes 6. Your own organization Trade Shows/Professional Associations As a hospitality professional, you will likely elect to join one or more professional trade associations. These associations typically serve the certification, educational, social, and legislative goals of its members. Typically, such associations hold annual gatherings, and, in conjunction with these meetings, they invite exhibitors who sell products and services of interest to interact with their members at trade shows. These trade shows bring together a variety of vendors, all of whom are interested in exhibiting their latest product offerings. Trade shows are an extremely efficient way to see the product offerings of a large number of vendors in a very short time. Monitoring Advances in Cost Control Technology 489
Many trade associations also have both state and local chapters, some of which will host their own trade shows. Some of the largest of these associations, as well as their Internet locations, are as follows. FUN ON THE WEB! Visit these association sites to find out when and where they will be holding their next trade shows. Association Web Address National Restaurant Association www.restaurant.org American Hotel and Motel Association www.ahma.com American Dietetic Association www.eatright.com Dietary Managers Association www.dmaonline.org American Culinary Federation www.acfchefs.org Club Managers Association of America www.cmaa.org American School Foodservice Association www.asfsa.org National Association of Catering Executives www.ienace.org Hospitality Financial and Technology www.iaha.org Professionals International Hotel and Restaurant Association www.ih-ra.com On a local level, chambers of commerce and professional service organizations often hold meetings and schedule speakers who can update you on the newest business applications of technology. Membership in these organizations is generally well worth its modest cost. Publications The publications listed in Figure 12.1 are examples of those that can be of significant help in monitoring changes in technology that affect cost control. Regularly reading about the hospitality industry will not only make you a better manager, but will also keep you abreast of the latest technological trends. In many cases, technology and its application have become such a large part of the editorial interest of these publications that a special technology editor is employed to monitor technological changes that could be of interest to the publication’s readers. Some of these publications are distributed free to qualified members of the hospitality industry, while others are not. Be sure to ask if you qualify for a free subscription when you contact the publication. Current Vendors Your current supplier of software, hardware, or communications systems should be a valuable source of no cost information. All of these vendors 490 CHAPTER 12 USING TECHNOLOGY TO ENHANCE CONTROL SYSTEMS
will make improvements in their products as competitive pressures and the desire to grow drive their development efforts. An added advantage of working with your current technology suppliers is the fact that the new systems they develop are highly likely to be compatible with those systems you already have and maintain. This can reduce staff training time and the errors that sometimes come with new system implementation. In addition, your current vendors may be more competitive on pricing their new offerings because, in most cases, they very much would like to retain your business. Competitive Vendors While your current vendors can certainly help you know about their own efforts, competition in the area of cost control–related products and services is robust and getting stronger. Whether your interest is software, hardware, or communications, identifying your current vendor’s strongest and best competitors is a good way to monitor advances in technology. At a minimum, annual visits, either in person or by telephone, can help you quickly identify improvements in procedures and features that your own vendor may have overlooked or dismissed. Don’t hesitate to contact small vendors you may see advertised in publications or exhibiting at trade shows. Often, these start-up companies offer the most innovative and cutting-edge programs available. Conversely, their small size may limit their ability to adequately service your account. In any case, they can be a source of tremendous information and are well worth monitoring. Technology-Related Classes Many community colleges and private training organizations offer instruction on the application of technology to your business. For example, Monitoring Advances in Cost Control Technology 491 Publication Subscription Information Cooking for Profit (414) 923-3700 Cornell Quarterly (607) 255-3025 Nation’s Restaurant News (212) 756-5000 Restaurant Business (212) 592-6500 Restaurant Hospitality (216) 696-7000 Restaurants & Institutions (847) 635-8800 Restaurants USA (202) 331-5900 FIGURE 12.1 Selected Hospitality Publications List
successfully completing an advanced course in word processing techniques may allow you to design and print your own “daily special” menu. Similarly, a course in the applications of database programs (those programs designed to manipulate and store information such as street addresses, e-mail addresses, and telephone numbers) may allow you to efficiently develop your own direct-marketing programs. If, in your community, there is a four-year hospitality management program offered by a college or university, you will likely find that it is an excellent source of information regarding the latest technological advances in all areas of the hospitality industry, including cost control. Finally, your current technology vendor may be a source of free or reduced-cost instruction. Be sure to contact the companies that currently provide your software, hardware, and communications services to see if they do, in fact, offer free or low-cost classes on effectively using their current products or instruction on newer products they are offering. Your Own Organization For those managers employed by a national chain or large company, the parent organization can be an excellent source of information about changing management tools. Often, a large company will produce newsletters, conduct in-service training, or hold regularly scheduled conventions that can be a source of information on changing technology. All of these resources should be monitored and utilized if they are available. Sometimes, a simple discussion with your area or regional supervisor regarding the technological changes affecting your company can be of tremendous value. These professionals are in a position to see the best of what is happening both within your own company and with your competitors. As a wise professional, you know that it is only by staying aware of changes in technology and being committed to implementing the best and most cost effective of these that your business and your career will continue to flourish. Advances in technological capabilities will continue to change society and the hospitality industry as well. When those advances help you to better manage your business, you, your employees, and, most important, your guests are all beneficiaries. Good luck. Key Terms and Concepts The following are terms and concepts discussed in the chapter that are important for you as a manager. To help you review, please define the terms below. Software Handheld device Hardware Communication device 492 CHAPTER 12 USING TECHNOLOGY TO ENHANCE CONTROL SYSTEMS
Microprocessor Cellular telephone RAM memory Fax machine Hard drive E-mail Multimedia Pager Modem Internet Monitor Professional trade association Printer Test Your Skills 1. One of the most significant changes in the hospitality industry in the past two decades has been the introduction of the drive-through window in the quick-service segment. Analyze that development in terms of its dependence on technology-related software, hardware, and communication devices. Which of these do you think has had the most influence on the development of the drive-through? Defend your answer. 2. Increasingly, employers are using advances in technology such as monitors and surveillance cameras to both observe and reduce employee theft and to help ensure the safety and security of their assets. Placement of these devices in food and beverage storage, production, and, in some cases, service areas has become commonplace. Assume that you are employed by such a company. How would you respond to a guest who protested to you that he or she resented being videotaped while they dining? Draft a letter to that guest explaining your company’s reason(s) for employing such a cost control method. 3. Review the following news release. It was taken from the hospitality law-related Web site, www.hospitalitylawyer.com. Such an incidence could, of course, take place in the hospitality industry. Dow Chemical Fires Workers Published: Lansing, MI In a case that holds great interest for the hospitality industry, Dow Chemical Company has fired 50 workers and disciplined 200 others after its investigation showed these individuals had e-mailed offensive material from company computers. The material mailed was, in some cases, pornographic, and said a company representative, “This sort of activity creates a harassment environment that we can’t tolerate.” While the company does not regularly monitor e-mail content, it certainly has the right to do so. Employees who simply opened e-mails they received, then deleted the material were not disciplined said company officials. Only those employees who distributed pornography and violent images got in trouble. The message here is clear. Work Test Your Skills 493
computers are for work. Employees should be reminded that employers can routinely limit the speech and images that may be displayed on these machines. The best practice, of course, is to include your privacy policy as part of your employee manual [for a sample privacy policy, see “Management Tools” on the hospitalitylawyer.com home page]. Draft a model policy that spells out your position on this sometimescontroversial issue for a multiunit company that routinely uses computers as a communication device. 4. Advances in technology are often associated with improvements in production-related cost control issues such as food and beverage preparation, purchasing, storage, and inventory. Technological advances, however, also influence human resource management. Identify three ways in which advances in technology have had a major influence on cost control in the area of human resource management. Also, identify three ways you believe technology advancements will influence both job seekers and employers in the future. 5. It is apparent that advances in software, hardware, and communication devices will continue to have an impact on foodservice managers and their operations. As you analyze the technology industry, which of these three areas do you believe will change the most in the next five years? What new uses for technologies do you foresee? 494 CHAPTER 12 USING TECHNOLOGY TO ENHANCE CONTROL SYSTEMS
Appendix A Spreadsheet Formulas This appendix is designed to give you the formulas that you will need to complete the Test Your Skills exercises at the end of each chapter. The authors make the assumption that you have a basic understanding of how to use spreadsheets. These formulas will be used throughout the textbook. The authors have intentionally chosen the simplest formulas that have the widest use. More experienced spreadsheet users may want to use more advanced functions or macros. When you are using the Excel spreadsheets to complete the Test Your Skills exercises, you may sometimes need to enter the raw data presented in the textbook. To complete the exercises, you will have to enter formulas in the spreadsheets to perform mathematical calculations just as you would when analyzing data as a manager in a foodservice operation. Basics of Creating Spreadsheets Assume that you are the manager of a fine-dining restaurant, and you want to see how many guests your waitstaff, Anne, Debra, and George served on Monday and Tuesday nights. To quickly add up the daily totals, you decide to set up the following spreadsheet: 495 A BC D E 1 Anne Debra George Total Guests 2 Monday 25 16 23 3 Tuesday 18 24 21 4 5
A BC D E 1 Anne Debra George Total Guests 2 Monday 25 16 23 sum(B2:D2) 3 Tuesday 18 24 21 sum(B3:D3) 4 5 To calculate the total guests served for Monday and Tuesday, you must do the following: 1. Place the cursor in cell E2. 2. Type: sum( 3. Highlight the cells that you wish to add (B2 through D2). 4. Excel will automatically add the cells to your formula so that it now looks like this: sum(B2:D2 5. Complete the formula by closing the right parenthesis: sum(B2:D2) 6. Hit “Enter.” 7. The number 64 should appear in cell E2. 8. To copy the same formula for cell E3, use the Auto Fill function. Simply click on the cell, E2, and then position your mouse directly over the bottom right-hand corner of the cell. The cursor will change to look like a plus sign (see the following spreadsheet). Click on the plus and drag down to cell E3. This will copy the formula from E2 to E3. It will automatically change the cells you are adding to B3 and D3. The answer you should have in E3 should be 63. You can use the Auto Fill function to copy numbers or formulas horizontally or vertically. 496 APPENDIX A SPREADSHEET FORMULAS Formula Example Explanation cell B1 Copies a number from another cell of the worksheet. $column$row $B$1 “Anchors” a cell in a series of formulas. When using the same cell in a variety of formulas in a spreadsheet, place the “$” in front of the column reference and the row reference to indicate that each formula is using the same cell in the calculation. This is especially helpful when dragging the formula to copy it over a series of cells. Formulas Needed for Test Your Skills Exercises
Basics of Creating Spreadsheets 497 Formula Example Explanation sum(cell:cell) sum(B1:B5) Adds numbers in a range of cells. sum(cell,cell) sum(B1,B5) Adds two numbers in cells that are not adjacent to each other. In the following formulas, the word “cell” may be replaced by an actual number, e.g., (cell25) (cellcell) (B1B2) Adds two numbers. (cell-cell) (B1-B2) Subtracts one number from another. (cell*cell) (B1*B2) Multiplies two numbers. (cell/cell) (B1/B2) Divides one number into another. (cell/cell)*100 (B1/B2)*100 Divides one number into another and multiplies the answer by 100 (changes answer to percentage). min(cell:cell) min(B1:B5) Chooses minimum value out of cell range. (Good to use when doing price comparisons.) roundup(cell,0) roundup(B1,0) Rounds fractions up to whole numbers. The “0” denotes that the number of decimal places will be 0. (Good to use when inventory indicates that you need 21 ⁄2 cases and you can only buy in full cases; this function will round the cases up to 3.) roundup(cell,2) roundup(B1,2) Rounds fractions up to two decimal places. The “2” denotes that the number of decimal places will be 2. (Good to use for money: When one cell is being used in a formula of a second cell, this will guarantee that no rounding errors will occur in the second cell.)
Note that, for percentages, you don’t necessarily have to type “*100” in the formula. You could, instead, so the following: 1. Highlight the cell. 2. Go to the menu at the top of the page and click on “Format.” 3. Under “Format,” click on “Cells.” 4. Under “Cells,” click on “Number.” 5. Under “Number,” click on “Percentage.” 6. You will also find a box in “Number” that will allow you to choose the number of decimal places. How to Create a Pie Chart Although this looks like a long list of things to do to create a pie chart, it should really only take you approximately two minutes to do (once you get the hang of it). So please give it a try. Following is an example of a P&L statement set up in Excel. Your task is to illustrate expenses and profit as a percentage of revenues in a pie chart. 498 APPENDIX A SPREADSHEET FORMULAS A B CD 1 % 2 Revenue $250,000 100.0 3 F&B Expense 130,000 52.0 4 Labor Expense 70,000 28.0 5 Other Expense 40,000 16.0 6 Total Expenses 240,000 96.0 7 Profit 10,000 4.0 1. Highlight “F&B Expense,” “Labor Expense,” and “Other Expense” in Column A and highlight their respective dollar amounts in Column B (all at the same time). Then hold down the “Ctrl” key on your keyboard and highlight “Profit” and its respective dollar amount. This will allow you to skip the “Total Expenses” row.
2. Go to the menu at the top of the screen and click on “Insert,” then click on “Chart.” A Chart Wizard will appear on your screen. 3. In the Chart Wizard, you have two choices: “Standard Types” and “Custom Types.” Usually, the Chart Wizard will open up automatically to “Standard Types,” which is the one you want to use. 4. Click on “Pie” and click on the “Chart Sub-type” (pictured at the right) that you want to use. Then click on “Next” at the bottom of the page. 5. In the next screen, you have two choices: “Data Range” and “Series.” “Data Range” is the one you want to use. 6. If you have already highlighted your columns in the spreadsheet as instructed in Step 1, you will not have to type in anything on this screen. Just click on “Next” at the bottom of the page. 7. In the next screen, you have three choices: “Titles,” “Legend,” and “Data Labels.” Click on “Titles” first. 8. Under “Titles,” you will see a space labeled “Chart Title.” Type in the title that you want for your chart in that space (or do nothing if you do not want a title). 9. Now, click on “Legend.” This option is available for you if you want the legend to show. If you want a legend, make sure the “Show Legend” box is checked and then click on a “Placement” for the legend (where you want it to appear on the chart). If you do not want a legend and it has a check mark next to it, click on the check mark to remove it. 10. Now, click on “Data Labels.” You will see a list of options for labeling the pieces of the pie. The authors of this text like to use “Show Label and Percent.” If you click on this, you will see that both the data labels (words) and percentages appear next to the corresponding piece of the pie. This also makes a legend redundant; so, if you are using this option, you will not want to click on “Show Legend” in the “Legend” section (see Step 9). Click on “Next” at the bottom of the page. 11. In the next screen, you have two choices: Place chart “as new sheet” and “as object in.” This is referring to where you want the pie chart to appear, either in a new Excel spreadsheet or in an existing spreadsheet in your workbook. In most cases, you will click on “as object in.” Next to “as object in” is a scroll down list. Choose the sheet in which you want the object to appear. The current sheet you are working in is the default sheet. 12. Click on “Finish” at the bottom of the page, and you should see your finished chart! 13. To move the pie chart to a specific location on the spreadsheet, click on any white space within the chart, hold down the mouse button, and drag the chart to the desired location. 14. To resize the pie chart, click on any of the eight dots on the border of the chart. The side middle dots make the chart larger or smaller How to Create a Pie Chart 499
horizontally, and the top and bottom middle dots make the chart larger or smaller vertically. The dots in the corners of the chart will resize the entire chart (larger or smaller) within the same proportions. 15. The Chart Wizard defaults percentages to zero decimal places (e.g., 12%). If you want percentages to have one or more decimal places (e.g., 12.3% or 12.34%), double-click on one of the percentages shown in your pie chart. A window will pop up that is labeled “Format Data Labels.” Click on the “Number” tab at the top of the window (this is the default). Then click on “Percentage” (this is the default). You will see “Set Decimal Places” on the right and a box next to it. Type in the number of decimal places you want and then click “OK” at the bottom of the window. This will set all of the percentages in your chart to the same number of decimal places. 16. Sit back and admire your work! How to Sort a Table Following is an example of Goal Value Analysis set up in Excel. Your task is to sort the menu items by Goal Value from highest to lowest. 500 APPENDIX A SPREADSHEET FORMULAS Goal Rank Menu Item A B C D Value Overall menu (Goal Value) (1-.35) 100 $16.55 1-(.30.35) 376.5 Lobster Stir-Fry (1-.51) 51 21.95 1-(.30.51) 104.2 Chicken Breast (1-.22) 140 $13.95 1-(.30.22) 731.2 Beef medallions (1-.37) 125 15.95 1-(.30.37) 414.5 Coconut Shrimp (1-.30) 121 16.95 1-(.30.30) 574.3 Grilled Tuna (1-.40) 105 17.95 1-(.30.40) 339.3 Scallops/Pasta (1-.24) 85 14.95 1-(.30.24) 444.3 Strip Steak (1-.45) 73 17.95 1-(.30.45) 180.2
1. Highlight the table to be sorted including the header row. 2. Go to the menu at the top of the screen and click on “Data,” then click on “Sort.” 3. A “Sort” window will appear on your screen. At the bottom of the “Sort” window you will see “My list has.” Click on “Header row” to indicate that your table has a header row. 4. At the top of the “Sort” window, you will see “Sort by.” Use the drop down menu to choose the appropriate column. In this example, you will choose the “Goal Value” column. 5. To the right of the drop down menu, you need to choose “Ascending” or “Descending.” For this example, choose “Descending” because you want the menu items to be sorted from highest to lowest. Click “OK” at the bottom of the window to sort the table. 6. After your table is sorted, type in the appropriate ranking numbers in the “Rank” column. Your table should now appear as follows: How to Sort a Table 501 Goal Rank Menu Item A B C D Value 1 Chicken Breast (1-.22) 140 $13.95 1-(.30.22) 731.2 2 Coconut Shrimp (1-.30) 121 16.95 1-(.30.30) 574.3 3 Scallops/Pasta (1-.24) 85 14.95 1-(.30.24) 444.3 4 Beef medallions (1-.37) 125 15.95 1-(.30.37) 414.5 5 Overall menu (Goal Value) (1-.35) 100 $16.55 1-(.30.35) 376.5 6 Grilled Tuna (1-.40) 105 17.95 1-(.30.40) 339.3 7 Strip Steak (1-.45) 73 17.95 1-(.30.45) 180.2 8 Lobster Stir-Fry (1-.51) 51 21.95 1-(.30.51) 104.2
Appendix B Frequently Used Formulas for Managing Operations Chapter 1—Managing Revenue and Expense Revenue Expense Profit Revenue Desired Profit Ideal Expense Percent Expense % Profit % Desired Profit % Revenue (Food and Beverage Cost Labor Cost Other Expense) Profit Food and Beverage Cost % Labor Cost % Other Expense % Other Expense Revenue Labor Cost Revenue Food and Beverage Cost Revenue Desired profit Revenue Profit Revenue Expense Revenue Part Whole 503
Total Expense % Profit % % of Budget Chapter 2—Determining Sales Forecasts Average Sales per Guest Sales This Year Sales Last Year Variance Percentage Variance Percentage Variance (Sales This Year/Sales Last Year) 1 Percentage Variance Sales Last Year (Sales Last Year % Increase Estimate) Revenue Forecast Sales Last Year (1 % Increase Estimate) Revenue Forecast Guest Count Last Year (Guest Count Last Year % Increase Estimate) Guest Count Forecast Guests Last Year (1 % Increase Estimate) Guest Count Forecast Last Year’s Average Sales per Guest Estimated Increase in Sales per Guest Sales per Guest Forecast Average Sales per Guest Forecast Chapter 3—Managing the Cost of Food Popularity Index Total Number of a Specific Menu Item Sold Total Number of All Menu Items Sold Revenue Forecast Guest Count Forecast Variance Sales Last Year Sales This Year Sales Last Year Sales Last Year Total Sales Number of Guests Served Actual Budget Profit Revenue Total Expense Revenue 504 APPENDIX B FREQUENTLY USED FORMULAS FOR MANAGING OPERATIONS
Number of Guests Expected Item Popularity Index Predicted Number of That Item to Be Sold Conversion Factor % of Total Ingredient % of Total Total Amount Required New Recipe Amount Desired Servings Ounces per Portion Ounces Required Waste % 1 Waste % Yield % AP Required AP Required Yield % EP Required Par Value On Hand Special Order Order Amount Unit Price Number of Units Extended Price Item Amount Item Value Item Inventory Value Beginning Inventory Purchases Goods Available for Sale Ending Inventory Cost of Food Consumed Employee Meals Cost of Food Sold Beginning Inventory Purchases Goods Available for Sale Ending Inventory Value of Transfers Out Value of Transfers In Cost of Food Sold EP Required Yield % Product Loss AP Weight Ingredient Weight Total Recipe Weight Yield Desired Current Yield Chapter 3—Managing the Cost of Food 505
Food Cost % Cost % Today (six-column food cost % estimate) Cost % to Date (six-column food cost % estimate) Chapter 4—Managing the Cost of Beverages Beverage Cost % Beginning Inventory Purchases Goods Available for Sale Ending Inventory Transfers from Bar Transfers to Bar Cost of Beverages Sold Item % of Total Beverage Sales Chapter 5—Managing the Food and Beverage Production Process Prior-Day Carryover Today’s Production Today’s Sales Forecast Margin of Error Beverage Cost Estimate Today Beverage Cost Estimate to Date Cost of Beverage Sold Proportion of Total Product Cost Cost in Product Category Total Cost in All Categories Issues to Date Inventory Adjustment Sales to Date Issues to Date Sales to Date Issues Today Sales Today Item Dollar Sales Total Beverage Sales Cost of Beverage Sold Beverage Sales Purchases to Date Sales to Date Purchases Today Sales Today Cost of Food Sold Food Sales 506 APPENDIX B FREQUENTLY USED FORMULAS FOR MANAGING OPERATIONS
Net Waste % 1 Net Waste Product Yield Product Yield % EP Cost (per pound) Operational Efficiency Ratio Attainable Food Cost % Chapter 6—Managing Food and Beverage Pricing Revenue Expense Profit Price Number Sold Total Revenues Food Cost % Food Cost % of That Item Food Sales (Selling Price) of That Item Pricing Factor Pricing Factor Product Cost Menu Price Selling Price Product Cost Contribution Margin Product Cost Contribution Margin Desired Selling Price Buffet Product Cost per Guest Total Buffet Product Cost Guests Served 1 Desired Product Cost % Cost of a Specific Food Item Sold Food Cost % of That Item Cost of a Specific Food Item Sold Food Sales of That Item Cost of Food Sold Food Sales Cost as per Standardized Recipes Total Sales Actual Product Cost Attainable Product Cost AP Price per Pound Product Yield % EP Weight AP Weight Product Loss AP Weight Chapter 6—Managing Food and Beverage Pricing 507
Chapter 7—Managing the Cost of Labor Productivity Ratio Employee Turnover Rate Involuntary Employee Turnover Rate Voluntary Employee Turnover Rate Labor Cost % Sales per Labor Hour Labor Dollars per Guest Served Guests Served per Labor Dollar Guests Served per Labor Hour Estimated Cost of Labor Forecasted Total Sales Labor Cost % Standard Cost of Labor Budget Labor Hours Budget % of Budget Chapter 8—Controlling Other Expenses Other Expense Cost % Other Expense Total Sales Actual Amount Budgeted Amount Forecasted Number of Guests Served Guests Served per Labor Hour Standard Number of Estimated Guests Served Guests Served per Labor Dollar Guests Served Labor Hours Used Guests Served Cost of Labor Cost of Labor Guests Served Total Sales Labor Hours Used Cost of Labor Total Sales Number of Employees Voluntarily Separated Number of Employees in Workforce Number of Employees Involuntarily Separated Number of Employees in Workforce Number of Employees Separated Number of Employees in Workforce Output Input 508 APPENDIX B FREQUENTLY USED FORMULAS FOR MANAGING OPERATIONS
Chapter 10—Planning for Profit 509 Other Expense Cost per Guest Chapter 9—Analyzing Results Using the Income Statement Food Category Cost % Food Inventory Turnover Average Inventory Value Beverage Inventory Turnover This Year’s Sales Last Year’s Adjusted Labor Cost % This Year’s Projected Labor Cost Profit Margin (Return on Sales) Profit Variance % Chapter 10—Planning for Profit Selling Price Product Cost Contribution Margin per Menu Item Total Sales Total Product Costs Total Contribution Margin Average Contribution Margin per Item A B C D Goal Value where A 1 Food Cost % B Item Popularity C Selling Price D 1 (Variable Cost % Food Cost %) Total Contribution Margin Number of Items Sold Net Income This Period Net Income Last Period Net Income Last Period Net Income Total Sales Cost of Beverages Consumed Average Beverage Inventory Value Beginning Inventory Value Ending Inventory Value 2 Cost of Food Consumed Average Inventory Value Food Category Cost Total Food Sales Other Expense Number of Guests Served
Total Sales Variable Costs Contribution Margin Selling Price Variable Cost/Unit Contribution Margin/Unit SP/Unit VC/Unit CM/Unit SP% VC% CM% 100% VC% CM% Break-Even Point in Sales Break-Even Point in Guests Served Before-Tax Profit Sales Dollars to Achieve Desired After-Tax Profit Guests to Be Served to Achieve Desired After-Tax Profit MSP or MSP Budgeted Revenue Budgeted Expense Budgeted Profit Sales per Seat Total Sales Available Seats Minimum Labor Cost 1 (Food Cost % Variable Cost %) Minimum Labor Cost 1-Minimum Operating Cost Fixed Costs Before-Tax Profit Contribution Margin per Unit (Guest) Fixed Costs Before-Tax Profit Contribution Margin % After-Tax Profit (1 Tax Rate) Fixed Costs Contribution Margin per Unit (Guest) Fixed Costs Contribution Margin % 510 APPENDIX B FREQUENTLY USED FORMULAS FOR MANAGING OPERATIONS
Chapter 11—Maintaining and Improving the Revenue Control System Product Issues Guest Charges Sales Receipts Sales Deposits Documented Product Requests Product Issues Product Issues Guest Charges Guest Charges Sales Receipts Sales Receipts Sales Deposits Chapter 11—Maintaining and Improving the Revenue Control System 511
Appendix C Management Control Forms 513 Monthly Purchase Monthly Item Usage Price Value Category ABC Inventory Analysis Unit Name:
514 APPENDIX C MANAGEMENT CONTROL FORMS Number Attainable Total Menu Total Item Sold Portion Cost Cost Price Sales Total Attainable Food Cost Unit Name: Date Prepared: Time Period: Prepared By: Actual Food Cost: Attainable Food Cost: Operational Efficiency Ratio: Attainable Food Cost Percentage:
Appendix C Management Control Forms 515 Banquet Event Order/Invoice Unit Name: Date: Banquet Event Order/Invoice Day of Event: Date of Event: Time of Event: to Time Ready By: Type of Event: Location: Expected Count: Guaranteed Count: Final Count: Organization Housing Event: Organization Contact Person: Organization Address: Organization Telephone: Fax: E-Mail: Price: Tax: Service Charge: % Deposit Amount: Deposit Received: Total Amount Due: Payment Due Date: Menu Setup (Style of Room, A/V) Linen Wines/Liquors Decor/Flowers Signature of Guest: Date: Signature of Manager: Date:
Beginning Ending Total Unit Total Beverage Type Amount Additions Amount Usage Cost Cost Liquor 1. 2. 3. 4. 5. 6. Beer 1. 2. 3. 4. Wine 1. 2. 3. Other 1. 2. 3. Total Product Cost Beverage Consumption Report Unit Name: Event: Date: Total Product Cost: Guests Served: Cost per Guest: Remarks:
Appendix C Management Control Forms 517 Date Item Requested Entry By Beverage Product Request Log Unit Name:
518 APPENDIX C MANAGEMENT CONTROL FORMS Item Description Unit Bid Price Bid Sheet Unit Name: Vendor: Buyer: Vendor’s Address: Buyer’s Address: Vendor’s Telephone #: Buyer’s Telephone #: Vendor’s Fax #: Buyer’s Fax #: Vendor’s E-Mail: Buyer’s E-Mail: Bid Prices Fixed: from (date) to (date) Salesperson Signature: Date:
Date In Out Total on Hand Bid Card Product Name: Bottle Size: Balance Brought Forward: Date: Loss Detail Weight % of Original AP Fat Loss Bone Loss Cooking Loss Carving Loss Total Product Loss Butcher’s Yield Test Unit Name: Item: Date Tested: Specification: Item Description: AP Amount Tested: Price per Pound AP: Net Product Yield: EP Cost per Pound: Yield Test Performed By: 519
520 APPENDIX C MANAGEMENT CONTROL FORMS Per Unit (Guest) Percentage Total sales SP Variable costs VC Contribution margin CM Fixed costs Before-tax profit Guests served: Taxes (40%) After-tax profit Contribution Margin Income Statement Unit Name: Beginning Inventory $ PLUS Purchases $ Goods Available for Sale $ LESS Ending Inventory $ LESS Transfers Out $ PLUS Transfers In $ Cost of Beverage Sold $ Cost of Beverage Sold Unit Name: Accounting Period: to
Appendix C Management Control Forms 521 Beginning Inventory $ PLUS Purchases $ Goods Available for Sale $ LESS Ending Inventory $ LESS Transfers Out $ PLUS Transfers In $ Cost of Food Consumed $ LESS Employee Meals $ Cost of Food Sold $ Cost of Food Sold Unit Name: Accounting Period: to
522 APPENDIX C MANAGEMENT CONTROL FORMS Meat Seafood Dairy Produce Other Total Beginning Inventory Purchases Goods Available Ending Inventory Cost of Food Consumed Employee Meals Cost of Food Sold Cost of Food Sold by Food Category Unit Name: Date:
Appendix C Management Control Forms 523 Credit Item Quantity Short Refused Price Amount Total Credit Memo Unit Name: Vendor: Delivery Date: Invoice #: Credit Memo #: Correction Original Invoice Total: Less: Credit Memo Total: Adjusted Invoice Total: Additional Information: Vendor Representative: Vendor Representative Telephone #: Operation Representative: Operation Representative Telephone #:
524 APPENDIX C MANAGEMENT CONTROL FORMS Par On Special Order Item Description Unit Value Hand Order Amount Daily Inventory Sheet Unit Name:
Appendix C Management Control Forms 525 Total Employee Name Schedule Hours Scheduled Rate Cost Total Employee Schedule Unit Name: Date: Labor Category: Shift: Labor Budget:
526 APPENDIX C MANAGEMENT CONTROL FORMS Inspection Inspected Item Inspected Date By Action Recommended Equipment Inspection Report Unit Name: Time Period:
Appendix C Management Control Forms 527 Food Cost % Number Selling Variable Cost % Item (in decimal form) Sold Price (in decimal form) Goal Value Analysis Data Unit Name: Rank Menu Item A B C D Goal Value 1 2 3 4 5 6 7 Goal Value Analysis Results Unit Name:
528 APPENDIX C MANAGEMENT CONTROL FORMS Unit Name: Phone #: Date Table Server Guests Check Number 123456 Items Ordered Price Subtotal Tax Gratuity Total Guest Receipt Date Table Server Guests Check Number Total 123456 Guest Check
Appendix C Management Control Forms 529 Unit Name: Date: Shift: Check Numbers Check Numbers Issued Returned Issued Checks Checks Number From To To From To Used Accounted For Missing Unaccounted Checks: Check Number Issued To Explanation Manager’s Initials Guest Check Control Form
Last Year % This Year % SALES: Food Beverage Total Sales COST OF SALES: Food Beverage Total Cost of Sales GROSS PROFIT: Food Beverage Total Gross Profit OPERATING EXPENSES: Salaries and Wages Employee Benefits Direct Operating Expense Music and Entertainment Marketing Utility Services Repairs and Maintenance Administrative and General Occupancy Depreciation Total Operating Expenses Operating Income Interest Income Before Income Taxes Income Taxes Net Income Income Statement (P&L) Unit Name: Last Year Versus This Year 530
This Variance Last Year Year Variance % SALES: Food Beverage Total Sales COST OF SALES: Food Beverage Total Cost of Sales GROSS PROFIT: Food Beverage Total Gross Profit OPERATING EXPENSES: Salaries and Wages Employee Benefits Direct Operating Expense Music and Entertainment Marketing Utility Services Repairs and Maintenance Administrative and General Occupancy Depreciation Total Operating Expenses Operating Income Interest Income Before Income Taxes Income Taxes Net Income Income Statement (P&L) Variance Unit Name: 531
532 APPENDIX C MANAGEMENT CONTROL FORMS Cost of Goods Average Inventory Inventory Category Consumed Inventory Turnover Total Inventory Turnover Unit Name:
Item Unit Item Amount Item Value Inventory Value Page Total Inventory Valuation Sheet Unit Name: Inventory Date: Counted By: Extended By: Page of 533
534 APPENDIX C MANAGEMENT CONTROL FORMS Unit Name: Position Title: Primary Tasks: 1. 7. 2. 8. 3. 9. 4. 10. 5. 11. 6. 12. Special Comments: Salary Range: Signature: Job Description
Appendix C Management Control Forms 535 Unit Name: Position Title: Personal Characteristics Required: 1. 2. 3. 4. 5. 6. Special Comments: Job Specification Prepared By: Job Specification Time Forecasted Labor Cost % Cost of Labor Period Total Sales Standard Budget Week 1 Week 2 Week 3 Week 4 Total Labor Budget Unit Name:
536 APPENDIX C MANAGEMENT CONTROL FORMS % of % of Week Budgeted Actual Budget Budgeted Actual Budget Budgeted Actual 1 2 3 4 Total Labor Cost Analysis—Actual Versus Budgeted Unit Name: Sales Labor Costs Labor Cost % Guests Served per Week Guests Served Cost of Labor Labor Dollar 1 2 3 4 Total Labor Productivity—Guests Served per Labor Dollar Unit Name:
Appendix C Management Control Forms 537 Guests Served per Week Guests Served Labor Hours Used Labor Dollar 1 2 3 4 Total Labor Productivity—Guests Served per Labor Dollar Unit Name: Week Cost of Labor Sales Labor Cost % 1 2 3 4 Total% Labor Productivity—Labor Cost % Unit Name: