The document discusses managing direct issued inventories in hospitality operations. It provides guidance on setting up standard operating procedures for a direct issued inventory system where items are sent directly to departments rather than going through a central store. Key aspects covered include developing deals and commitments with suppliers, establishing an ordering system between departments, and reporting systems to control costs. A case study example is also provided showing a daily flash food cost report for a large banquet booking at a hotel.
2. Menu formats in foodservice establishments generally fall into
one of the following three major categories:
1. Standard menu
The standard menu is the same every day. It can be printed
and handed to guests, displayed in the operation, or recited
by service staff. It is the menu format most common in
commercial restaurants
2. Daily menu
In some restaurants, you might elect to operate without a
standard menu and, instead, implement a daily menu, that is,
a menu that changes every day. This format is especially
popular in some upscale restaurants where the chef’s daily
creations are viewed with great anticipation, and even some
awe, by eager guests
3. Cycle menu
A cycle menu is a menu that is in effect for a specific time
period
3. FACTORS AFFECTING MENU PRICING
• Revenue management
Factors Influencing Menu Price
1. Economic conditions
2. Local competition
3. Service levels
4. Guest type
5. Product quality
6. Portion size
7. Ambience
8. Meal period
9. Location
10.Sales mix
4. ECONOMIC CONDITIONS
The economic conditions that exist in a local area or even in
an entire country can have a significant impact on the prices
that restaurant managers can charge for their menu items.
When an economy is robust and growing, managers
generally have a greater ability to charge higher prices for the
items they sell
LOCAL COMPETITION
While the prices charged by competitors may be important,
this factor is often too closely monitored by the typical
foodservice operator. It may seem to some managers that the
average guest is vitally concerned with low price and nothing
more. In reality, small variations in price generally make little
difference to the buying behavior of the average guest.
5. SERVICE LEVELS
The service levels that an operation provides its guests
directly affect the prices the operation can charge. Most
guests expect to pay more for the same product when service
levels are higher
GUEST TYPE
All guests want good value for their money. But some guest
types are simply less price sensitive than others. The
question of what represents good value varies by the type of
clientele
PRODUCT QUALITY
In nearly every instance, a guest’s quality perception of any
specific menu item offered for sale in the foodservice
business can range from very low to very high. These
perceptions are the direct result of how the guest views a
restaurant’s menu offerings.
6. PORTION SIZE
Portion size plays a large role in determining menu pricing.
Portion size is an often-misunderstood concept, yet it is
probably the second most significant factor (next to sales mix)
in overall pricing
AMBIENCE
If people ate only because they were hungry, few restaurants
would be open today. People eat out for a variety of reasons,
some of which have little to do with the food itself
MEAL PERIOD
In some cases, diners expect to pay more for an item served
in the evening than for that same item served at a lunch
period. Sometimes this is the result of a smaller “luncheon”
portion size, but in other cases the portion size, as well as
service levels, may be the same in the evening as earlier in
the day.
7. LOCATION
Location can be a major factor in determining price. One
needs look no further than America’s many themed
amusement parks, movie theaters, or sports arenas to see
evidence of this.
SALES MIX
Of all the pricing-related factors addressed thus far, sales mix
most heavily influences the menu pricing decision; just as
guest purchase decisions will influence total product costs
8. C o f f e e P o r t f o l i o D e s i g n e d
ASSIGNING MENU PRICES
PRODUCT COST PERCENTAGE
This method of pricing is based on the idea that the cost
of producing an item should be a predetermined
percentage of the item’s selling price.
As was illustrated earlier in this chapter, if you have a
menu item that costs $1.50 to produce, and your desired
cost percentage equals 40 percent, the following formula
can be used to determine what the item’s menu price
should be
9. C o f f e e P o r t f o l i o D e s i g n e d
PRODUCT CONTRIBUTION MARGIN
Some foodservice managers prefer an approach to menu
pricing that focuses on each of their menu item’s
contribution margin rather than their product cost
percentages.
Contribution margin is defined as the amount that remains
after the product cost of the menu item is subtracted from
the item’s selling price. Contribution margin, then, is the
amount that a menu item “contributes” to pay for labor and
all other expenses and provide for a profit.
Thus, if an item sells for $3.75 and the product cost for
this item is $1.50, the contribution margin is computed as:
10. SPECIAL PRICING SITUATIONS
Some pricing decisions faced by foodservice managers call
for a unique approach. In many cases, pricing is used as a
way to influence guests’ purchasing decisions or to respond
to particularly complex situations.
The following are examples of these special pricing situations:
1. Coupons
2. Value pricing
3. Bundling
4. Salad bars and buffets
5. Bottled wine
6. Beverages at receptions and parties
11. COUPONS
Coupons are a popular way to vary menu price. Essentially,
there are two types of coupons in use in the hospitality
industry.
The first type generally allows guests to get a free item when
they buy an additional item.
This buy one, get one (BOGO) approach has the effect of
reducing by 50 percent the selling price of the couponed item.
12. VALUE PRICING
Value pricing refers to the practice of reducing prices on
selected menu items in the belief that, as in couponing, the
total number of guests served will increase to the point that
total sales revenue also increases.
BUNDLING
Bundling refers to the practice of selecting specific menu
items and pricing them as a group so that the single menu
price of the group is lower than if the items in the group were
purchased individually
SALAD BARS AND BUFFETS
The difficulty in establishing one set price for either a salad
bar or a buffet is that the amount eaten and, thus, the total
serving costs incurred by an operation will vary from one
guest to the next.
13. SALAD BARS AND BUFFETS
The difficulty in establishing one set price for either a salad
bar or a buffet is that the amount eaten and, thus, the total
serving costs incurred by an operation will vary from one
guest to the next.
14. C o f f e e P o r t f o l i o D e s i g n e d
BOTTLED WINE
Few areas of restaurant industry pricing create more
controversy than that of pricing wines by the bottle.
After reviewing the selling prices established using a
product cost percentage approach, They decide that they
would like to explore the contribution margin approach to
wine pricing.
therefore computes the contribution margin
(Selling price – Product cost = Contribution margin) for
each wine They sell and finds the following results:
15. SALES MIX
Of all the pricing-related factors addressed thus far, sales mix
most heavily influences the menu pricing decision; just as
guest purchase decisions will influence total product costs
16. MANAGING DIRECT
ISSUED INVENTORIES
SYSTEM IN
HOSPITALITY
OPERATIONS
Objective of the system:
1. Efficient in cost and expenses of
the company/hotel.
2. Increase cashflow of the company/
hotel.
3. Easily to control of food cost,
beverage cost, and materials
supplies expenses.
4. Direct responsibility and more
control by department heads
concern.
5. Increase profitability for the
company/ hotel.
17. HOW TO MANAGES AND WHAT
THE TOOLS.
1. Set up SOP related of the system to be
implemented, forms and reporting and
control system.
2. Train and socialize the SOP to all
department heads. Pay attention to
Director of F&B, Executive Chef, Chief
Engineering and Executive House
Keeper.
3. Assign and set up the suppliers to be
work with us. Introduce and launching the
system.
4. Effective control by All Department
Heads, Director of Finance and Cost
Controller.
18. SOP = THE MOST
IMPORTANT THINGS.
THE KEY SUCCESS OF THE SYSTEMS:
1. Set up and implement of SOP: Managing
Direct Issued System Inventories.
2. Set up the system will be part of
KPI all department heads.
3. Make sure all department heads
especially the key area
responsible(Executive Chef, Executive
Housekeeper, etc) understand about the
system and know how to implement and
controls.
4. Set up rewards and incentives.
5. Review the results and take necessary
action.
6. Train them as targeted and continue
trainings.
19. SYSTEMS PROCESS AND
CONTROLLING.
1.
IMPLEME
NT SOP
2.
ACTIO
N BY
ALL
DEPARTME
NTS
4.
REVIEWIN
GS
3.
CONTROLLI
NG
BY ALL
DEPARTME
NTS
5.
TAKE
NECESSA
RY
ACTION
6.
DIRECT
ISSUED
SYSTEM
IMPLEMENT MANAGING DIRECT
ISSUED
INVENTORIES
20. Purchase of foods,
beverages,
materials
supplies.
Records and booked
as Inventories of
foods, beverages,
materials supplies
INVENTORIES
SYSTEM.
Store requisition to
issued inventories
and records as
cost or expenses
Send and keeping
inventories in
general store.
Foods, beverages
cost or
expenses
22. DEALS AND COMMITMENTS WITH
SUPPLIERS.
HOTEL’S
GENERAL
STORE OR
INVENTORI
ES
HOTEL’
S
SUPPLIE
RS
Transfer
to
supplier
s.
23. WHAT ARE THE DEALS AND
COMMITMENTS WITH SUPPLIERS.
1. Suppliers will keep hotel’s goods
inventories: foods, beverage, materials
supplies.
2. Hotel’s guarantee will buy the
goods as commitment.
3. Hotel’s allow suppliers mark up the
prices as deals and commitment.
4. Suppliers will guarantee the
goods inventories available
any time and shipments.
5. Both hotel and suppliers agree that
number suppliers will be limited 6 - 10.
24. WHAT ARE THE DEALS AND
COMMITMENTS WITH SUPPLIERS.
6. Make sure that suppliers understand
with the hotels of inventory direct
issued system.
7. Suppliers will always make priority the
hotel purchase orders.
8. Both parties agrees will do market
survey by hotels twice a month, to make
price based on market price + mark up
deal.
9. Payment to suppliers will set up on
time schedule agree by both
parties.
10.Good and active communication
among hotel management and
suppliers.
25. WHO ARE THE CHAMPION ON
THESE SYSTEMS.
1. All department heads to be
champion in the systems set up.
2. Director of FB and Executive Chef
are the champion of food
inventories.
3. Director of FB and Bar or
Beverage Manager are the
champion of beverage
inventories.
4. RDM and Executive
Housekeeper for room supplies
inventories.
5. Chief Engineering for
engineering supplies
inventories.
26. ALWAYS TO BE
REMEMBER AND
NOTED.
1. All procedures are remain
same except storeroom
requisition, purchase
requisition we don’t require
it.
2. Running hotel make it
assumption that maximum in
six months all inventories
item to be move to direct
issued.
3. Preopening hotel it will be set
up the system from the
beginning of hotel operation.
4. No items will record as
inventories, all of them to be
cost or expenses.
27. REPORTINGS SYSTEM AND
CONTROLLINGS.
1. Daily Flash Food Cost should be update on
daily basis.
2. Weekly Departments Expenses Reports.
3. Direct Control By Department Heads, No
Delay If Cost or Expenses Higher Than
Budget. Then Take Necessary Actions.
4. Always Make It Planning For Weekly
Basis As Forecasted Occupancy and
Other Activities.
5. Make Sure On Hand Inventories Has
Calculated.
28. ORDERING SYSTEM FROM EACH
DEPARTMENTS.
ROO
M
DEP
T.
F&B
DEPT.
ENG.
DEPT.
SPA.
DEPT.
OTHE
R.
DEPT
.
PO
.
Checked by:
COST
CONTROL.
Controlled and
Approved by:
GENERAL MANAGER.
Controlled and
Approved by:
DIRECTOR OF
FINANCE.
Reviewed &
Followed up
by:
PURCHASUN
G.
Ready to
provide and
send the
Goods by:
SUPPLIERS.
Order from all
departments
29. CASE STUDY
BANQUET.
Grahamaha resort be reserved by
customers for a banquet function on 5
to 7 January 2019 for 1400 pax. The
breakdown of banquet booking are as
follows: 5 January 200 pax, 6 January
200 pax and 7 January 400 pax. The
price per pax is Rp. 200,000,
- In order for the banquet to run
smoothly, the kitchen wants
preparations to be carried out 3 days in
advance and all of foods are directly
charged to the food cost. Your tasks,
please provide calculations in the Daily
Flash Food Cost Report.
30. DAILY FLASH FOOD COST
REPORT.
HOTEL: Grahamaha Resorts
Period
of:
Jan-19 DAILY
FLASH FOOD
COST
DESCRIPTION
01/01/19
Day 1
02/01/19
Day 2
03/01/19
Day 3
04/01/19
Day 4
05/01/19
Day 5
06/01/19
Day 6
07/01/19
Day 7 TOTA L M T D
Gross Food Consumption 58.727.279 62.120.007 77.912.735 41.425.207 43.291.208 41.798.408 41.425.207 366.700.051
Add:
Beverage to Food 1.503.000 1.103.000 1.203.000 1.407.000 1.100.950 1.463.000 1.303.800 9.083.750
Total Gross Food Consumption 60.230.279 63.223.007 79.115.735 42.832.207 44.392.158 43.261.408 42.729.007 375.783.801
Less Credit to Food:
Food to Bar 224.700 225.600 187.500 256.700 210.800 180.600 187.500 1.473.400
Employee Meals 5.625.000 5.375.000 5.250.000 5.500.000 5.300.000 5.275.000 5.550.000 37.875.000
Fruit Baskets 600.000 500.000 650.000 550.000 600.000 700.000 550.000 4.150.000
Complimentary 750.000 750.000 750.000 750.000 1.050.000 1.250.000 1.750.000 7.050.000
Officer Checks 1.850.000 1.650.000 1.957.000 1.880.000 1.950.000 1.890.000 1.970.000 13.147.000
Music & Entertainment 570.500 680.900 698.500 780.500 980.500 1.180.500 1.280.500 6.171.900
Sales & Promotion 1.180.000 1.230.000 1.650.000 1.950.000 1.998.000 1.650.000 2.165.000 11.823.000
Total Credit to Food 10.800.200 10.411.500 11.143.000 11.667.200 12.089.300 12.126.100 13.453.000 81.690.300
Total Cost of Food 49.430.079 52.811.507 67.972.735 31.165.007 32.302.858 31.135.308 29.276.007 294.093.501
31. B A L A N C E S H E E T
H O T E L : A B C D F G
A s p e r D e c e m b e r 2 0 1 9 - 2 0 1 8
- 2 0 1 7 . I N T H O U S A N D
R U P I A H ( 0 0 0 )
A F T E R B E F O R E B E F O R E
A S S E T . 2 0 1 9 2 0 1 8 2 0 1 7
C u r r e n t A s s e t :
C a s h & H o u s e B a n k s 2.143.854 2.168.225 2.160.005
B a n k s 39.672.045 26.932.088 25.732.002
T o t a l C a s h & B a n k 41.815.899 29.100.313 27.892.007
A c c o u n t R e c e i v a b l e 10.052.750 11.056.109 13.011.042
I n v e n t o r i e s :
F o o d - 3.887.889 3.067.046
B e v e r a g e - 3.980.755 3.800.034
M a t e r i a l s S u p p l i e s - 4.989.603 4.590.327
T o t a l I n v e n t o r i e s - 12.858.247 11.457.407
P r e p a i d e x p e n s e s 381.542 211.098 250.677
T o t a l C u r r e n t A s s e t 52.250.191 53.225.767 52.611.133
T O T A L A S S E T . 52.250.191 53.225.767 52.611.133
L I A B I L I T I E S & C A P I T A L .
C u r r e n t L i a b i t i e s :
T r a d e C r e d i t o r s 7.180.076 8.139.997 8.090.225
A c c r u e d Liabil it i e s:
E l e c t r i c i t y 820.690 928.381 851.335
W a t e r 391.723 388.583 358.076
G a s 239.877 260.818 230.874
T o t a l A c c r u e d Liabilitie s 1.452.290 1.577.782 1.440.285
C a p i t a l :
O w n e r s h i p - - -
R e t a i n e d E a r n i n g 43.617.825 43.507.988 43.080.623
T o t a l C a p i t a l 43.617.825 43.507.988 43.080.623
L I A B I L I T I E S & C A P I T A L . 52.250.191 53.225.767 52.611.133
32. CONCLUSIO
N.
In order to implementation of direct
issued inventories system to be
successfully implemented in hotel or
resort operations, the most important
things to do are as follows:
Implementation of the properly
control function.
Set up SOP and disseminate it to all
parties concerned.
Continuous and planned training of
the system.
Mutually beneficial cooperation
with suppliers.
33. RECOMMENDATIO
NS.
In purpose of efficiency, increasing
cash flow and continuous
supervision of food, beverage and
materials supplies in hotel or resort
operations, and to increase profit
margins at restaurants, with direct
control of food costs, it is
recommended to apply “DIRECT
ISSUED INVENTORIES SYSTEM
IN HOSPITALITY OPERATIONS”.
34. Question :
Base on your opinion, what does factors influence the decision
making of the selling price of F & B?
Please answer the questions above and email to:
dinoleonandri@stptrisakti.ac.id
by email no later than 1 week ahead.
In the email subject, write the name of the campus, course and class
example :
1. STPT/Intl Class/Hotel Basic Accounting
2. Poltekpar Plb/DIK 6A/Hospitality Business
3. Poltek Intl Jkt/AJ/Hotel Management