Food cost control

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Food cost control

  1. 1. Food cost controlFood cost control • It can be defined as guidance and regulation of cost of operations. • Under taking to guide and regulate cost needs to ensure that they are in accordance of the predetermined objectives of the business. • Guidance and regulations of cost are set as per expressed in the policy statements and budget of undertakings:
  2. 2. Cont..Cont.. • Food cost control means : • You have a stick to your predetermined standards. • Set standards appropriate to your market before you buy, prepare and sell food. • Cost control procedures.
  3. 3. What is Food Cost?What is Food Cost? Cost of Food Cooked + Wastage + Spoilage + Shrinkage/ Pilferage
  4. 4. What isWhat is NotNot Food Cost Control?Food Cost Control? Bringing down the cost at the expense of • Quality & Guest Satisfaction Attitude: • Penny Wise, Pound Foolish • Golden Goose
  5. 5. Why should you Control Food Cost ?Why should you Control Food Cost ? • Rs.1 Saved = Rs.10 Sales • Adds Straight to the Bottom Line • Competitive World
  6. 6. How do you Control Cost?How do you Control Cost? 1. Shrinkage/ Pilferage Short Term: Better Security System Long Term: Create a working atmosphere, where people belong and are proud to be contributing to the growth of the company
  7. 7. How do you Control Cost?How do you Control Cost? 2. Spoilage • Better Storage Facilities • Better Kitchen Design • Stock Management
  8. 8. How do you Control Cost?How do you Control Cost? 3. Wastage • Temporary / Stressful / Negative / Life reducing way: Policing • Permanent / Enjoyable / Positive / Life enhancing way: Bring in a culture of High Performance
  9. 9. How do you Control Cost?How do you Control Cost? 4. Cost of Food Cooked • Planning the Quantity • Ensuring the Quality
  10. 10. ObjectiveObjective • To analyze income and expenditure:- – Gross profit = sales – food cost – Net profit = sales – (food cost + labour cost + overheads) • Pricing of food:- Selling Price = food cost + labour cost + overheads + profit (20-30%) (7-10%) (6-10%) (50%) • Prevention of inefficiencies:- • Data for the management:-
  11. 11. Factors affecting the percentage ofFactors affecting the percentage of food cost-food cost- HurdlesHurdles • Food Purchasing • Menu Planning • Method of pricing • Culinary Skills • Service Skills • Avoiding Wastage
  12. 12. Phase of control proceduresPhase of control procedures • Planning • Operational • Control after the event
  13. 13. Phases of Control Planning Operation Control after the Event Finanacial Marketing Catering Purchasing Receiving Storing Issuing Production Sales Reporting Assesment Correction
  14. 14. Financial PlanningFinancial Planning • Budget- Whole organization & single unit • Total Revenue • Expenditure • Borrowing • Profit • Shares • Debentures
  15. 15. MarketingMarketing • Segment • Clientele • Turn over • Market Share • Average Spending Power • Choice • Trends • Advertisement • Promotions
  16. 16. CateringCatering • The type of customer • The type of menu • Beverage provision necessary for operation • Food quality standard • Method of pricing • Type and quality of service • Degree and décor and comfort • Type and style of table and chairs
  17. 17. OperationsOperations • Purchasing • Receiving • Storing • Issuing • Production control • Sales control
  18. 18. Management control after theManagement control after the eventevent • F & B cost reporting • Assessment • Correction
  19. 19. Cont..Cont.. Operation Control After the Event Planning
  20. 20. Problems of F&B IndustryProblems of F&B Industry • PERISHABILITY OF THE PRODUCT • UNPREDICTABILITY OF VOLUME OF BUSINESS • UNPREDICTABILITY OF THE MENU MIX: • SHORT CYCLE OF CATERING OPERATION • DEPARTMENTALIZATION

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