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# CHAPTER 18 - PowerPoint PPT Presentation

CHAPTER 18. DETERMINING SALES FORECASTS. Importance of Forecasting Sales. “How many guests will I serve today?" – "This week?" - "This year?" Guests will provide the revenue from which the operator will pay basic operating expenses. What is FORECASTING ?.

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### CHAPTER 18

DETERMINING SALES FORECASTS

• “How many guests will I serve today?" – "This week?" - "This year?"

• Guests will provide the revenue from which the operator will pay basic operating expenses

What is FORECASTING?

• Forecasts of future sales are normally based on your sales history.

• A sales forecastpredicts the # of guests you will serve and the revenues they will generate in a given future time period.

• SALES =

• SALES VOLUME=

COVERS

REVENUE

• 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 to dateis the cumulative total of sales reported in the unit.

• An average or mean is defined as the value arrived at by adding the quantities in a series and dividing the sum of the quantities by the number of items in the series. Ex: (6+9+18 =33/3)

• Fixed average is an average in which you determine a specific time period. Ex: 14 days in a month

• Rolling average is the average amount of sales or volume over a changing time period. Ex: examining only 7 days prior for a bar

• Record both revenue and guest counts

• Compute averagesales per guest, a term also known as check average

Total Sales

Number of Guests Served = Average Sales per Guest

Tues Total Sales: \$1,826.27

Total Guests = 79

Avg. Sales per Guest=

\$23.12

Formula

Total Sales

# of Guests Served

= AvgSales per Guest

• Sales history may consist of :

• revenue, number of guests served, and average sales per guest.

• 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 sales).

• In most cases, your sales histories should be kept for a period of at least two years.

### Chapter 19

Managing the Cost of Food

• How many servings of each item should we produce?

• You don’t want to run out

• You don’t want to make too much.

• Menu item forecasting addresses the questions:

• “How many people will I serve today?”

• “What will they order?”

• Popularity index is defined as the percentage of total guests choosing a given menu item from a list of alternatives.

Popularity Index =Total Number of a Specific Menu Item Sold

Total Number of All Menu Items Sold

Chpt 19: Fig 19.1Menu Item 5 day Sales History

Use the previous table to follow the formula:

Step 1:

Popularity Index = Total # of a specific menu item sold

(= %) Total # of all menu items sold

Step 2:

Take the Popularity index in decimal form and x by the guest forecast to come up with the predicted # to be sold.

400 x popularity index = predicted # to be sold.

Factors that influence Predicted # to be sold

• Competition

• Weather

• Special Events in your area

• Facility Occupancy (hospitals, dorms, hotels, etc.)

• Your own promotions

• Quality of service

• Operational consistency

These & factors affect sales volume, make guest count prediction very difficult.

Empower

Develop

Record

Failure Potential

Answer Questions

• Knowledge of potential price changes, new competitors, facility renovations and improved selling programs = factors to predicting future sales.

• Must develop, monitor, daily, a sales history report appropriate for your operation.

• With out accurate data, control systems, are very likely to fail.

• Help you answer: “How many people are coming tomorrow?, “How much is each person likely to spend?