Monitoring beverage operations

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Monitoring beverage operations

  1. 1. Monitoring Beverage OperationsTuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 1 / 29
  2. 2. Recap of the Previous session• What are the 2 primary objectives of beverage production control.• Describe the use of standardized glassware in beverage production control.• Describe 2 approaches commonly used to train bartenders to follow established standards and procedures. p• List 4 techniques used in monitoring performance of Bartenders. Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 2 / 29
  3. 3. KCM of Monitoring Beverage Operations O i• Identify the three general approaches to monitoring beverage operations.• Calculate the value of liquor issued to the bar inventory differential and cost of liquor consumed. consumed• Calculate daily, weekly and monthly costs thru the inventory values and compare th th i t l d between actual and standard. Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 3 / 29
  4. 4. Scope• The Cost Percent Methods Methods.• Monthly Calculations.• Th issues of Central Beverage Stores The i fC t lB St and Bars.• Bar Inventory Differential.• The Cost approach. pp• The Sales approach. Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 4 / 29
  5. 5. The Cost Percent Methods• Standard Cost Method: Determining cost of Beverages sold and comparing with actual or standard beverage cost. g• Ounce Control Method: Liquid measure converting to ounces and comparing ounces sold against ounces consumed.• Actual sales Record: Comparing Potential sales value of beverages consumed with actual sales value recorded. Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 5 / 29
  6. 6. Basis of Calculations• Based on Monthly Calculations• C t calculations b C t Cost l l ti by Category.• Daily Calculations. Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 6 / 29
  7. 7. Monthly Calculations• A physical inventory of the storage area is taken after the close of business on the last day of the month month.• The number of bottles of each item in stock is counted and the value of each counted, item is determined by means of one of five methods for inventory valuation valuation. Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 7 / 29
  8. 8. Inventory Valuation methods applied li d1.1 Actual purchase price methodmethod.2. First - in, first - out method.3. Weighted3 W i ht d - average purchase price h i method.4. Latest purchase price method.5. Last - in, first - out method. , Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 8 / 29
  9. 9. The issues of Central Beverage Stores and B S d Bars• The Central stores issues beverages to all satellite bars.• Example: Opening beverage inventory $3,201.80+Beverage purchases this month $3,666.80= Total available for sale this month $6,868.60 Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 9 / 29
  10. 10. Bar Inventory DifferentialTotal available for sale this month $6,868.60— Closing inventory this month $3,875.40= Value of beverages issued to the bar $2,993.20Bar inventory value at the beginning of the month y g g $1,041.50— Bar inventory value at the end of the month $ 876.20= Bar inventory differential $ 165.30 Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 10 / 29
  11. 11. Using Bar Inventory differentialValue of beverages issued to the bar $2,993.20 g $ ,+ Inventory differential $165.30= Cost of beverages consumed g $3,158.50 , Beverage cost• Beverage cost percentage = —————— Beverage sales• $3 1 8 0 = 26 44% $3,158.50 26.44% $ 11,945.60 Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 11 / 29
  12. 12. Adjustments to Beverage CostTuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 12 / 29
  13. 13. Cost Calculation by CategoryTuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 13 / 29
  14. 14. Representing cost on daily basisTuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 14 / 29
  15. 15. Methods for cost appropriation• The Standard cost method.• The O Th Ounce control method. t l th d• The sales value method.• The Actual sales record method.• The Average sales value method method.• The standard deviation method. Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 15 / 29
  16. 16. The Standard Cost method1. The Standard cost of every shot of spirit is derived.2. The standard cost of every shot is later multiplied with # of units sold.3. The total standard cost is derived.4. The Total standard cost is compared to actual cost derived from consumption thru inventory.5. The difference is potential savings. Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 16 / 29
  17. 17. The Standard Cost methodTuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 17 / 29
  18. 18. The Standard Cost method• The Standard cost is compared with the actual cost derived from the inventory: Actual cost $4,098.90 — St d d cost Standard t 3,947.85 3 947 85 = Difference $ 151.05 Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 18 / 29
  19. 19. The Ounce control Method1. The method is applied to only where straight pp y g drinks are served.2. Involves taking physical inventory of bar stock and comparing with the number of ounces sold each day with number of ounces consumed each day. y3. Ideally the ounces consumed should be ounces sold.4. However variance i always th4 H i is l there d t due to Evaporation, spillage, pilferage and breakage unless malpractice is affirmed. g p Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 19 / 29
  20. 20. The Sales Value Method1. The method involves first calculation of sales revenue generated by each bottle of spirit.2.2 The drink size by capacity is taken taken.3. Total # of drinks per bottle are appropriated which means 1 liter bottle yields 33.8 oz and a 750 ml bottle yields 25.4 oz.4. Suppose the standard drink size is 1 oz then 33.8 33 8 oz and th cost i $ 3 00 d the t is 3.00.5. Then the sales value per bottle is $ 101.40 Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 20 / 29
  21. 21. The Sales Value MethodTuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 21 / 29
  22. 22. The Sales Value Method• Sales value of 1 liter of gin = $ 108 00 108.00 Number of ounces in 1 liter = 33.80 $ 108 00 108.00• Sales value per ounce = ——— = $3.20 33.8 33 8• Sales value of 1.25 ounces of gin = 1.25 x $ 3.20 = $ 4.00 3 20 4 00 Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 22 / 29
  23. 23. Using the actual sales record method h d• This method is largely applied to mixed drinks.• This method first involves calculating drink differential.• The primary ingredient of the drink is taken into consideration.• Mixed Drink differential is the monetary difference between the primary ingredient and the mixer. Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 23 / 29
  24. 24. Calculating Potential sales value Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 24 / 29
  25. 25. Using the actual sales record method h d• Also defined as the difference between the sales price of a given drink and the sales value of the primary ingredient if sold as a straight shot.• In the representation on page 24 the differential values for a mixed drinks is drawn then totaled and finally removed from the used sale of empty bottles. Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 25 / 29
  26. 26. Analysis of actual sales of GinSNO Drinks # Sold Ounces Total Drink Total Drinks Ounces Price $ Sales $ 1 Martini 90 2 180 $ 4.50 810.00 2 Straight Shots 150 1 150 $ 6.40 960.00 Totals 330 $ 1770.00 Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 26 / 29
  27. 27. Average Sales Value Method• The method eliminates the need for daily sales analysis and daily calculation of a net mixed drink differential differential.• As illustrated on page 26 the potential sales value of a bottle of Gin is $ 1770.00/330 Ounces = $ 5.36 for one ounce of Gin Gin. Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 27 / 29
  28. 28. ASV method use Item Bottle Size Average Potential Sales Value Dover Gin 1 liter $ 95.99Old Kentucky Rye 1 liter $ 97.38Loch Ness ScotchL hN S t h 750 ml l $ 82.60 $ 82 60 Lenin Vodka 1 liter $ 92.57 Burble’s brandy 750 ml $ 85.75 Item Bottles Consumed x Sale Value per  Total Sales Value Bottle Dover Gin Dover Gin 3x $ 95.99 3x $ 95 99 $ 287.97 $ 287 97Old Kentucky Rye 2x $ 97.38 $ 194.76 Lenin Vodka 2 x $ 92.57 $ 185.14 Total $ 667.87 Tuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 28 / 29
  29. 29. Questions Q ti Comments C tTuesday, July 05, 2011 BAC-5132 Food and Beverage Management-II-Monitoring Beverage Operations Slide 29 / 29

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