Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Food Production Control: Quantities

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Importance of Forecasting Sales The first question operating managers must ask themselves is very simple: "How many guests will I serve today?" - "This week?" - "This year?" The answer to questions such as these are critical, since these guests will provide the revenue from which the operator will pay basic operating expenses. The first question operating managers must ask themselves is very simple: "How many guests will I serve today?" - "This week?" - "This year?" The answer to questions such as these are critical, since these guests will provide the revenue from which the operator will pay basic operating expenses.

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Sales Histories  Forecasts of future sales are normally based on your sales history since what has happened in the past in your operation is usually the best predictor of what will happen in the future.  Forecasts of future sales are normally based on your sales history since what has happened in the past in your operation is usually the best predictor of what will happen in the future.  A sales forecast predicts the number of guests you will serve and the revenues they will generate in a given future time period.  A sales forecast predicts the number of guests you will serve and the revenues they will generate in a given future time period.

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Sales Histories  You can determine your actual sales for a current time period by using a computerized system called a point of sales (POS) system that has been designed to provide specific sales information.  You can determine your actual sales for a current time period by using a computerized system called a point of sales (POS) system that has been designed to provide specific sales information.  Remember that a distinction is made in the hospitality industry between sales (revenue), and sales volume, which is the number of units sold.

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Sales Histories  Sales may be a blend of cash and non-cash.  With accurate sales records, a sales history can be developed for each foodservice outlet you operate and better decisions will be reached with regard to planning for each unit’s operation.

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Sales Histories  Sales to date is the cumulative total of sales reported in the unit.  Sales history is the systematic recording of all sales achieved during a pre-determined time period. Sales histories can be created to record revenue, guests served, or both.

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Sales Histories  Guest count is the term used in the hospitality industry to indicate the number of people you have served, and is recorded on a regular basis. For many other foodservice operations, sales are recorded in terms of sales revenue generated.  Most POS systems are designed to tell you the amount of revenue you have generated in a given time period, the number of guests you have served, and the average sales per guest.

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved  When managers record both revenue and guest counts, information needed to compute average sales per guest, a term also known as check average, is provided. Total Sales Number of Guests Served=Average Sales per Guest

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Maintaining Sales Histories  Sales history may consist of revenue, number of guests served, and average sales per guest. You may want to use even more detailed information, such as the number of a particular menu item served, the number of guests served in a specific meal or time period, or the method of meal delivery (for example, drive-through vs. counter sale).

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Sales Histories are likely to be arranged in one of three ways: 1. By operating period, such as one week or month, so that all sales records for an entire operating period can be viewed together on one page, card, or screen 2. By day of the week, so that all sales records for a given day (Tuesday, for example) for a period of several weeks can be compared. 3. By entrée item, so that the degree of popularity of a given item can be seen over time.

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Other Information in Sales Histories One of the most common of these conditions is the weather. Most foodservice operators find that weather conditions have a noticeable impact on sales volume. In many establishments, bad weather has a clearly negative impact on sales volume. One of the most common of these conditions is the weather. Most foodservice operators find that weather conditions have a noticeable impact on sales volume. In many establishments, bad weather has a clearly negative impact on sales volume. Hotels and motels in major metropolitan centers often find the impact of weather on sales to be the opposite: Bad weather seems to increase food and beverage sales in these properties, probably because it discourages guests from going out to nearby restaurants. Hotels and motels in major metropolitan centers often find the impact of weather on sales to be the opposite: Bad weather seems to increase food and beverage sales in these properties, probably because it discourages guests from going out to nearby restaurants.

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Other Information in Sales Histories Special events can decidedly influence sales and are often included in sales histories. The occurrence of a national holiday on a particular day or the presence of a particular convention group in a hotel can affect sales considerably. So can such varied conditions as faulty kitchen equipment, a torn-up street in front of the restaurant, or a major sale at a nearby store. Special events can decidedly influence sales and are often included in sales histories. The occurrence of a national holiday on a particular day or the presence of a particular convention group in a hotel can affect sales considerably. So can such varied conditions as faulty kitchen equipment, a torn-up street in front of the restaurant, or a major sale at a nearby store.

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Popularity Index In addition to keeping records of numbers of portions sold, many foodservice operators use the data to determine a popularity index. Popularity index is defined as the ratio of portion sales for a given menu item to total portion sales for all menu items as illustrated in Figure 8.4. In addition to keeping records of numbers of portions sold, many foodservice operators use the data to determine a popularity index. Popularity index is defined as the ratio of portion sales for a given menu item to total portion sales for all menu items as illustrated in Figure 8.4. The popularity index is calculated by dividing portion sales for a given item by the total portion sales for all menu items. The index may be calculated for any time period. The popularity index is calculated by dividing portion sales for a given item by the total portion sales for all menu items. The index may be calculated for any time period. Popularity index = Portion sales for Item A Popularity index = Portion sales for Item A Total portion sales

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Sales Forecasting A usual first step in forecasting is to predict total anticipated volume: total numbers of customers anticipated for particular days or particular meals. A usual first step in forecasting is to predict total anticipated volume: total numbers of customers anticipated for particular days or particular meals. To arrive at a figure, one refers to the sales history to find the total number of sales recorded on each of a number of comparable dates in the recent past. To arrive at a figure, one refers to the sales history to find the total number of sales recorded on each of a number of comparable dates in the recent past. When great differences are apparent, reasonable efforts must be made to determine the reasons for the differences. When great differences are apparent, reasonable efforts must be made to determine the reasons for the differences.

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Sales Forecasting When the effects of surrounding conditions have been evaluated, the next step is to judge the extent to which these conditions will exist and affect sales on the particular date or dates for which one is preparing the forecast. When the effects of surrounding conditions have been evaluated, the next step is to judge the extent to which these conditions will exist and affect sales on the particular date or dates for which one is preparing the forecast. This may involve checking a local calendar for coming events, following weather forecasts, and looking into various other relevant sources of information. This may involve checking a local calendar for coming events, following weather forecasts, and looking into various other relevant sources of information.

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Sales Forecasting After these steps have been taken, it is possible to estimate the total business volume that may be anticipated for the day or dates for which the forecast is being prepared. After these steps have been taken, it is possible to estimate the total business volume that may be anticipated for the day or dates for which the forecast is being prepared. For example, if recent history indicated 300 to 315 sales for dinner on Mondays in pleasant weather, one could reasonably anticipate that the next Monday would bring approximately the same volume of business if good weather were expected. In this case, it would probably be safe to predict 315 sales. For example, if recent history indicated 300 to 315 sales for dinner on Mondays in pleasant weather, one could reasonably anticipate that the next Monday would bring approximately the same volume of business if good weather were expected. In this case, it would probably be safe to predict 315 sales.

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Sales Forecasting The next step is to forecast the anticipated number of sales of each item on the menu. This is simpler to do if the menu is identical to those that have appeared on Mondays in the past. The next step is to forecast the anticipated number of sales of each item on the menu. This is simpler to do if the menu is identical to those that have appeared on Mondays in the past. However, it can also be done for changing menus if the sales history is set up to reflect the relative popularity of individual items as compared with a changing variety of other items appearing on the same menu. This type of forecasting is more difficult, but by no means impossible However, it can also be done for changing menus if the sales history is set up to reflect the relative popularity of individual items as compared with a changing variety of other items appearing on the same menu. This type of forecasting is more difficult, but by no means impossible

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Determining Production Quantities: The Production Sheet A production sheet is a form on which one lists the names and quantities of all menu items that are to be prepared for a given date. A production sheet is a form on which one lists the names and quantities of all menu items that are to be prepared for a given date. Production sheets such as that illustrated in Figure 8.5 translate management's portion sales forecasts into production targets. Production sheets list menu items and quantities in terms that the chef and staff can use in production. Production sheets such as that illustrated in Figure 8.5 translate management's portion sales forecasts into production targets. Production sheets list menu items and quantities in terms that the chef and staff can use in production. The production sheet is best viewed as a tool used by management to control production and eliminate waste The production sheet is best viewed as a tool used by management to control production and eliminate waste

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved The Production Sheet Production sheets vary in form and complexity from one kitchen to another. Production sheets vary in form and complexity from one kitchen to another. It would be filled out by a manager and forwarded to the chef as many days in advance as possible. It would be filled out by a manager and forwarded to the chef as many days in advance as possible. Upon receiving it, the chef would have valuable information about both total anticipated volume for a particular meal and the number of portion sales anticipated for each item on the menu. Upon receiving it, the chef would have valuable information about both total anticipated volume for a particular meal and the number of portion sales anticipated for each item on the menu. With this information in hand, a chef is better equipped to determine needs for perishable for and for nonperishable foods. With this information in hand, a chef is better equipped to determine needs for perishable for and for nonperishable foods.

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Monitoring Quantity Production and Taking Corrective Action There are two purposes for monitoring quantity production: 1. To determine whether the sales forecast has been reasonably accurate in predicting both the total number of customers and their individual preferences for particular menu items 2. To judge how closely the chef has followed the production standards established on the production sheet.

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Void Sheet Whenever a portion is returned, an authorized individual, such as a kitchen supervisor or chef, records it on the void sheet, indicating the name of the item, the number of the check on which it appeared, and the reason for its return. These entries can be most revealing to an alert manager or food controller. Whenever a portion is returned, an authorized individual, such as a kitchen supervisor or chef, records it on the void sheet, indicating the name of the item, the number of the check on which it appeared, and the reason for its return. These entries can be most revealing to an alert manager or food controller. If the number of returns is consistently high and evenly distributed among job classifications, investigation may indicate general understaffing. This finding may suggest a need for additional personnel to improve customer service. If the number of returns is consistently high and evenly distributed among job classifications, investigation may indicate general understaffing. This finding may suggest a need for additional personnel to improve customer service.

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Void Sheet There are other important uses of the void sheet as well, particularly when efforts are being made to control portions by a certain method such as control of preportioned entrées. There are other important uses of the void sheet as well, particularly when efforts are being made to control portions by a certain method such as control of preportioned entrées. If all returned portions must be recorded on the void sheet and attested to by a member of the management team, it is more difficult for kitchen personnel to be careless with food. If all returned portions must be recorded on the void sheet and attested to by a member of the management team, it is more difficult for kitchen personnel to be careless with food. The recording of returned portions makes possible the reconciliation of kitchen records of portions produced and records of portions sold The recording of returned portions makes possible the reconciliation of kitchen records of portions produced and records of portions sold

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved  It is important to note that sales histories, regardless of how well they have been developed and maintained, are not sufficient alone to accurately predict future sales.  Your knowledge of potential price changes, new competitors, facility renovations, and improved selling programs are just a few of the many factors that you must consider when predicting future sales.