Chapter 7 Food Production Control: Quantities Principles of Food, Beverage, and Labour Cost Controls, Canadian Edition

Learning Objectives After reading this chapter, you should be able to: 7.1 Define the standard for controlling production volume and explain its importance. 7.2 List and describe three standard procedures that enable managers to gain control over production volume. 7.3 Define sales history and describe two methods for gathering the data from which a sales history is developed. 7.4 List three basic approaches to arranging data in a sales history. 7.5 Define popularity index and use a popularity index to forecast portion sales. 7.6 Describe the production sheet and calculate needed production for menu items. 7.7 Describe a void sheet and explain its use. 7.8 Complete a portion inventory and reconciliation. 7.9 Describe a procedure used for controlling high-cost, preportioned main course items.

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.

Standards for Production Volume It is essential that foodservice establishments know the number of portions likely to be sold on any given day with a degree of accuracy. Three standard procedures to control production volume: Maintaining and analyzing sales history Forecasting portion sales Determining production quantities

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.  A sales forecast predicts the number of guests you will serve and the revenues they will generate in a given future time period. 

Sales Histories Manual Method Uses the traditional guest cheques—paper forms that become itemized bills given to customers at the conclusion of their meals Set up a routine for abstracting the data from the cheques

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.  Remember that a distinction is made in the hospitality industry between sales (revenue), and sales volume, which is the number of units sold.

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.

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.

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.

Number of Guests Served Sales Histories When managers record both revenue and guest counts, information needed to compute average sales per guest, a term also known as cheque average, is provided. Average Sale per Guest = Total Sales Number of Guests Served

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).

Arrangement of Sales Histories 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 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. By entrée item, so that the degree of popularity of a given item can be seen over time

Portion sales for an item Popularity Index Popularity index (PI) is defined as the ratio of portion sales for a given menu item to total portion sales. 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 an item Total portion sales

Other Information in Sales Histories One of the most common is the weather. In many establishments, bad weather has a clearly negative impact on sales volume. Hotels and motels in major metropolitan centres often find bad weather seems to increase food and beverage sales in these properties, possibly it discourages guests from going out to nearby restaurants.

Other Information in Sales Histories Special events can influence sales and are often included in sales histories. A national holiday A particular convention group in a hotel Faulty kitchen equipment A torn-up street in front of the restaurant A major sale at a nearby store Judgements can be made regarding numbers of portions to prepare.

Sales Forecasting Predict anticipated volume: total numbers of customers anticipated for particular days or particular meals. Refer to the sales history to find the total number of sales recorded on a number of comparable dates in the recent past. When great differences are apparent, determine the reasons for the differences.

Sales Forecasting Judge the extent to which surrounding conditions will affect sales on the particular date(s). Checking: a local calendar for coming events weather forecasts other relevant sources of information

Sales Forecasting After these steps, estimate the total business volume anticipated for the day or dates. 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.

Sales Forecasting Next forecast the anticipated number of sales of each item on the menu. It can also be done for different 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.

Determine Production Quantities The production sheet is a form listing the names and quantities of all menu items that are to be prepared for a given date. It translates portion sales forecasts into production targets. It lists menu items and quantities in terms that the chef and staff can use. It is a tool used by management to control production and eliminate waste.

Determine Production Quantities The production sheet: varies in form and complexity from one kitchen to another filled out by a manager and forwarded to the chef as many days in advance as possible has valuable information for the chef about both total anticipated volume for a particular meal and the number of portion sales anticipated for each item on the menu allows a chef to be better equipped to determine needs for perishable for and for nonperishable foods

Monitoring Quantity Production Determine whether the sales forecast has been reasonably accurate in predicting both the total number of customers and their individual preferences Judge how closely the chef has followed the production standards established on the production sheet Take corrective action

Void Sheet Whenever a portion is returned: records it on the void sheet indicate the name of the item the number of the check on which it appeared the reason for its return If the number of returns is high: investigate may indicate understaffing careless server indifferent cook represents excess cost

Void Sheet Other important uses of the void sheet: control of portions by a certain method such as preportioned entrées it is more difficult for kitchen personnel to be careless with food makes possible the reconciliation of kitchen records of portions produced and records of portions sold

Things to Consider  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.

Key Terms Mise en place, p. 210 Popularity index (PI), p. 196 Portion inventory and reconciliation, p. 207 Production sheet, p. 202 Sales forecasting, p .198 Sales history, p. 191 Void sheet, p. 207

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