Foundations of cost control by daniel traster chapter12

chapter 12 Revenue Prediction Class Name Instructor Name Date, Semester Foundations of Cost Control Daniel Traster Opening Question If you managed a restaurant, what information would you want to know to help you predict how many guests to expect at tomorrow’s meal services? Forecasting Process Forecasting Process • • • Historical quantitative data come from POS system or reservation/walk-in book Qualitative data should be recorded daily in a log or POS system Qualitative data includes: ―weather, ―special events, ―conventions, ―holidays, ―construction project, ―competition changes, ―marketing promotions ―…anything that might explain business fluctuations Trends • Start with customer count from the same day of the week from the prior week or the prior year • Adjust based on historical trend percent increase or decrease Current customer count– prior count % change = Prior customer count Example 12a Restaurant saw 347 customers the first Friday in March this year and 360 the first Friday in March last year What is the percent change from last year? 347-360 % change = = -0.036 (3.6% decrease) 360 Using Trends • Trends only significant if repeated over and over each same day of the week • Manager uses trend to calculate initial forecast New Customer Count = Prior Count X (1 + percent change in decimal form) Example 12b Business has consistent trend of 1.4% increase over last year’s customer counts If first Friday in March last year saw 340 customers, how many should be forecast for the first Friday in March this year? New Count = 340 X (1 + 0.014) = 344.8 or 345 Rolling Averages Use rolling averages when no trend is consistent across weeks C1 + C2 + C3…+ CN Rolling Average Count = N C = Customer count for that period N = total number of periods counted Example 12c Business forecasts using rolling averages over weeks Guest counts for past weeks have been 418, 437, 398, and 414 What is forecast for upcoming week? 418 + 437 + 398 + 414 Rolling Average = = 417 10 Example 12j Restaurant forecasts 130 guests for dinner tomorrow 42% of guests usually order dessert Use chart on next slide to calculate the number of each dessert forecast to be sold Number ordering dessert =130 X 0.42 = 54.6 or 55 guests ordering dessert 38 Example 12j Chart Dessert Menu Mix % Strawberry Cheesecake 14.5% Chocolate Mousse 18.7% Crème Brulee 23.1% Pecan Pie 19.9% Ice Cream Sundae 23.8% Forecast Count 39 Example 12j Answer Dessert Menu Mix % Forecast Count Strawberry Cheesecake 14.5% 8.0 Chocolate Mousse 18.7% 10.3 Crème Brulee 23.1% 12.7 Pecan Pie 19.9% 10.9 Ice Cream Sundae 23.8% 13.1 40 Converting Forecast Menu Mix Count to Kitchen Production Schedule 41 Kitchen Production Sheet See Table 12.3 in the Text 42 Kitchen Production Sheet See Table 12.3 in the Text 43 Example 12j converted to Kitchen Production Sheet Dessert Forecast Adjusted Portions on Count Forecast Hand Cheese-cake 8.0 Mousse 10.3 12 Brulee 12.7 Pie Sundae Buffer Portions to Total Avail- Prepare able 10 13 17 17 14 19 19 10.9 11 15 16 13.1 12 5 12 17 Left-overs 44 Kitchen Production Sheet Notes • If kitchen runs out of food and additional portions are made during service, “additional production” should be recorded on the form • If a dish is 86’ed, manager should record when this occurs to determine if it represents good or bad forecasting 45 Mishaps and Sales Reconciliation • When no errors occur during service, dishes sold = number available for sale – leftovers • Errors often occur and should be recorded on a Food Mishap Report a.k.a Void Sheet • Void Sheet lists all items rendered unusable during service; for each item lost, it includes ―the name of server, ―item name, ―reason for void, ―and possibly check number, date, and time of mishap 46 Voids Voids occur when food is dropped on floor, customer rejects it for improper cooking, customer dislikes the taste, or cook ruins it and removes it from circulation • Every void must be accounted for to ensure it isn’t being stolen • Trusted employee or manager should verify (visually) that each item is legitimately ruined before entering it on Void Sheet 47 Voids Reasons for voids: • Lots of a voids coming from a single employee suggest the employee needs retraining • Lots of voids across the staff may suggest an understaffed business 48 Food and Sales Reconciliation Form At end of service or day, manager should complete a food and sales reconciliation form to confirm that all portions prepared by kitchen are accounted for as sales, voids, or leftovers See Table 12.5 in text, which shows sample food and sales reconciliation form 49 Part of Example 12j as Food and Sales Reconciliation Form Kitchen Production Food Portions on Hand Portions Prepared Add Prep Total Available Leftovers Portions Consumed Cake 10 13 12 Mousse 17 17 15 Brulee 19 19 14 Pie 15 16 15 Notes Sales Accounting Food Portions Sold Voids Total Output Portions Consumed Difference Cake 12 12 12 Mousse 14 15 15 Brulee 12 13 14 Sundae 18 18 18 See Susie Food and Sales Reconciliation Form • Info on Form comes from Kitchen Production Sheet, Void Sheet, POS system/guest checks, and physical inventory of kitchen stations • Total Output (portions sold + voids) should match Portions Consumed (sent out from kitchen) • Any discrepancy should be investigated 51 Reconciliation Form (cont.) • Regularly forgetting to enter voids or checks missing from the same employee may be a sign of theft or signal a need for retraining • POS systems record which server orders each dish, so missing checks are not an issue Missing food is easier to track to a specific server 52 ... budget and control costs • Average Check = amount of revenue the average person generates on a check • Can calculate average check by server to identify strong servers or average check by day, week,... Revenue Using forecast revenue and target food cost %, beverage cost %, and labor cost %, manager can determine budget in dollars for a given period of time 18 Seat Turnover When seating is maxed... Number of Menu Items Sold from Menu Mix Percents Step 27 Forecasting Number of Menu Items Sold from Menu Mix Percents Step 28 Example 12i Historically, 42% of guests order dessert Thursday night Of