# IFWA 1217 Food Production and Planning - PowerPoint PPT Presentation

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IFWA 1217 Food Production and Planning Virginia Stipp Lawrence, MHM Welcome! Today’s Notes Cost Control Standardized Recipes (introduction) Cost Control - Calculate Actual Cost; Convert to Cost % Compare Actual Cost % To: Industry Average %

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IFWA 1217 Food Production and Planning

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## IFWA 1217Food Production and Planning

Virginia Stipp Lawrence, MHM

### Welcome!

• Today’s Notes

• Cost Control

• Standardized Recipes (introduction)

• Cost Control -

• Calculate Actual Cost; Convert to Cost %

• Compare Actual Cost % To:

• Industry Average %

• Previous Actual Cost % (Past Income Statements)

• Operating Budget (Estimated Cost %)

• Specific Standard For Your Company

• Specific Standard For Your Property

• Variance From The Standard

• First Decide If The Variance Is Significant

• Is Standard Cost Greater Than Actual Cost?

• Is Actual Cost Greater Than Standard Cost?

• What Is The Percentage Variance?

• What Is The Dollar Variance?

• How Much Of A Variance Is Acceptable To Your Company?

• Why Is There A Significant Variance?

• There Are Many Possible Explanations

• The Problem(s) Can Usually Be Traced To:

• Arithmetic Error (Sales Revenue Or Costs)

• Unexpected Waste

• Incorrect Portioning

• Purchases Are Off-Spec.

• Improper Storage

• Stealing

Correcting The Variance

• How Much Time/Effort Do You Want To Spend?

• How Important Is The Problem?

• How Specialized Is The Problem?

• Are You Sure You’ve Isolated The Right Problem?

• Is The Corrective Action Easy To Track?

Correcting The Variance

• How Much Time/Effort Do You Want To Spend?

• How Important Is The Problem?

• How Specialized Is The Problem?

• Are You Sure You’ve Isolated The Right Problem?

• Is The Corrective Action Easy To Track?

Management Objectives to Control

• Sales Revenue

• Profit

• Cost Restrictions

• Growth

• Guest Satisfaction

• Employee Satisfaction

• Other Constituencies’ Satisfaction

• Obligations to the Industry

• Obligations to the Community

The Control Process

• Establish Standards: Cost, Quality

• Determine Actual Results

• Compare Standards To Actual Results

• Determine If there Is A Significant Variance

• Corrective Action

• Revise Standards If Necessary

The Effective Control Process

• Measurable, Objective Standards

• Meaningful, Realistic Standards

• Provides Feedback

• Accurate

• Timely

• Consistent

• Tracks The Right Things

• Tracks The Most Important Things

• Cost Effective

• Practical And Appropriate For The Type Of Operation

• Flexible

• Provides Specific Information

• Establishes Authority And Responsibility

Cost Control – and Menu Planning

• Menu Planning Is The First Control Point In The Restaurant Operation

• Other Control Points Are:

• Receiving

• Storing

• Issuing

• Preparing

• Cooking

• Holding

• Serving

• Guest Interaction, E.G., Cash Collection; Customer Satisfaction; Etc.

• Layout And Design Of The Facilities

• Availability Of Food And Beverage Ingredients

• Type Of Equipment

• Labor

• Budget

• Customer Needs And Desires/Trends

• Day Part Menus (Meal Part)

• Drink Lists

• Table Top Displays

Truth In Menu: Misrepresentations That Should Be Avoided:

• Quantity

• Quality

• Price

• Brand Name

• Product Identification

• Point Of Origin

• Merchandising Terms

• Means Of Preservation

• Means Of Preparation

• Illustrations/Graphics

• Nutrition

### Food Production and Planning

April 10,2006

Objectives for Today

2. Review Controls Standards

3. Review Standardized Recipe Concepts

4. Complete Standardized Recipe handout

Reminders

Homework 4 is due next week

• Subjective Methods

• Reasonable Price (Usually Copying the Competition’s Prices)

• Highest Price

• Intuitive (Trial And Error)

Objective Method Used To Price The Regular Restaurant Menus - “Multiple” Method

• Cost Out Menu Items -- use ingredients method, prime ingredient method, or mark-up + method

• Ingredient Method= each ingredient is costed & added together

• Prime Ingredient Method=The formula is to add the cost of labor and cost of food, add a percentage for profit. This method is good for dishes that require a lot of preparation.

• Mark Up Method=each ingredient has food cost percentage added to it or cost is just multiplied by three (factor method) not including labor or other costs

• Multiply Cost By 3 to 7

• Check Out The Competition

• Adjust Multiple Again, If Necessary

Objective Method Used To Price Catering Menus - “Thirds” Method

• 1/3 Cost Of Food, Beverage, Other Supplies

• 1/3 Cost Of Labor, Overhead

• 1/3 Profit

• Aggravation Factor?

• Shoulder Periods/Down Time?

Objective Method Used To Price Catering Menus - “Contribution Margin” Method

• Calculate Average CM Needed, Per Guest (This is equal to all expenses -- except F&B -- plus net profit, per guest)

• Calculate Cost Of Food And Beverage, Per Guest

• Add Together To Determine Price, Per Guest

Other Pricing Procedures

• Pricing Food And Beverage Daily Specials

• Pricing All-You-Can-Eat (Drink) Items

• Pricing Merchandise

• Pricing Sales Promotions

• Corkage Fees-bringing in your own bottle

• Pricing Entertainment

• Pricing Take-Out, Delivery Items

• Kickbacks

• Fictitious Suppliers

• Unintentional/Intentional Errors

• Off-Spec Products

• Getting Proper Credit

• Receiving Wrong Products

Receiving Controls

• Compare Shipment To Copy Of Purchase (Order) Record

• Compare To Copy Of Invoice

• Check Quality

• Check Quantity

• Check Expiration Dates

• Spot Check AP Prices

• If Unacceptable, Return And/Or Get Credit Slip

• Move “Directs” To Production

• Move “Stores” To Warehouse For Later Issue

• Update Inventory File in Computer

• Update AP Prices in Computer

• Update Bar Codes in Computer

• Complete Necessary Paperwork

• Send Paperwork To Office

• Keep back Up Files/Paperwork

• Security Problems In Receiving

• Off-Spec Products

• Expired Products

• Wrong Products

• Short Counts

• Theft/Pilferage

• Spoilage

• Wrong AP Prices

Storage Controls

• Determine Which Items To Track (ABCD)

• Separate “Directs” From “Stores”

• Determine Which Areas/Items Require Tight Controls

• Limited Access

• Proper Locking System

• Practice FIFO Inventory Rotation

• Controlled Temperature/Humidity

• Follow Health District Guidelines To Avoid Spoilage/Quality Deterioration

• Arrange Inventory Conveniently

Maintaining Cost And Quality

• Specifications

• Recipes

• Portion Costs

• Yields

• Portion Sizes

• Glass Sizes

• Ice Sizes

Other Production Controls

• Track Expensive Issues And Directs

• Keep Training Up-To-Date

• Watch Waste (Paper Products, Linen)

• Watch Over-Portioning

• Make Sure To Use Correct Qualities

• Use EDR, Not Eating-On-The-Job

• Match Issues With Sales And Mistakes

• Watch Crossover Problems On Prep Lines When Planning Menus

• Have Appropriate Equipment/Tools

• Try To Use Leftovers

• Lock Up In-Process Inventory When Closed (Especially At the Bars)

• Try To Hire The Correct Personalities

Serving Controls

• Service Is Affected by:

• Type Of Production

• Style Of Service Required

• Layout And Design

• Communication Flow

• Degree Of Cooperation

Service Control Factors

• Timing Of Service

• Accuracy

• Up\$elling, Suggestive Selling, Consultative Selling

• Keep It As Simple As possible

• Maintain High Seat T/O

• Track Expensive Foods/Beverages Served

• You Must Have An Expediter

• (A Food Checker Is Uncommon These Days)

• Allocate Stations Appropriately

• Determine Optimal Station Size

• Get The Right Computer System

Computerized Service Systems

• At Very Least, You Need An ECR

• Preferably You Will Have A POS System, With Touch Screen Capability And As Much Flexibility As You Need And Can Afford

• Make Sure The System Is Correct, That It Meets Your Needs

• Standardized Recipes

## Food Production and Planning

Standardized Recipes

### Goals and the Standard Cost

Standard costs are one of the most important control tools within F & B operations.

The standard cost

• ·        that you establish, defines the expected cost.

• ·        acts as a goal.

You can establish standards for:

• ·        the operation as a whole

• ·        each individual profit(cost) center

• ·        foods alone

• ·        beverages alone

• ·        each meal period

• ·        each food group on the menu

• ·        each specific menu item

• ·        the more useful for control purposes.

• ·        the more timely and costly to develop, maintain and use.

### Control Tools

• there are 5 (five) control tools to use in determining standard food and beverage costs:

The Five Control Tools:

• 1. Standard Purchase Specifications

• 2. Standard Recipes

• 3. Standard Yields

• 4. Standard Portion Size

• 5. Standard Portion Costs

### Review-What is a Standardized Recipe?

• is a detailed formula for producing each menu item, food and beverage.

you need precise records of:

• a) ingredients

• b) amounts

• c) procedures.

A standardized recipe is a customized recipe developed by a particular establishment describing exactly how they want a dish to be prepared, including specifications of the necessary tools and equipment, the time and personnel involved, and ideally a picture of the item as desired for service.

The standardized recipe

• should include all relevant information right down to the garnish (if any), plate size and plate presentation.

A recipe out of a cook book is NOT a standardized recipe, because

• . . . equipment varies from place to place.

• identical equipment performs differently from place to place.

• utensil availability may vary.

• interpretations required: "golden brown", "moderate heat", "cook until done”

• raw food products (ingredients) may vary in terms of "types",

• flavor, size, and availability.

### Developing a standardized recipe:

12 steps:

• 1 A) Talk through the process with the preparers (cooks, bartenders) as you observe and take detailed notes.

• 1 B) Find a recipe that you would like to use (existing files, food magazine, mothers files . . .)

• 2)Check if you have the necessary tools and equipment, i.e., is it at all feasible for you to prepare, or do new purchases have to be made?

• 3) Cost it out:

• -is it feasible for your market?

• -is it worthwhile to produce, i.e., is it profitable.

• 4)Try it out in its original format.

• Is it OK?

• Evaluate: Appearance, tenderness, texture, flavor, overall quality . . .

• 5)Convert the recipe to your standard size, specifying portion size,yield and number of portions.

• 6)"You" make the converted recipe.

• Evaluate again: does it still have the desired quality characteristics? Some recipes do not work well in large

• quantity,

• 7) Make any desired or necessary changes.

• 8) Make the batch/converted recipe at minimum 3 times:

• is it consistent?

• are the flavors and other characteristics the same?

• is it functional to produce in this size?

• 9)Put into your standardized recipe format.

• 10) Have your preparation employees prepare (recreate) it according to the standard format.

• 11) Train your preparation staff.

• 12) File and/or start using.

• Keep records of

• ·        popularity

• ·        reproducibility

• ·        acceptability.

• Standardized Recipe-