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Case Study 1. Why might the food cost percentage be rising? There can be many reasons for increase in the food cost. The external factors can be the general cost of buying ingredients. The internal factors can be waste in the restaurant kitchen, employee theft, not using consistent portion control, buying food for home, poor staff education, poor book keeping and using only one food vendor…
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Download file to see previous pages Offering the employees with low food cost menu which are also known as “freebies” during their shifts can help to deter these employees from eating higher food cost items. Not using Consistent Portion Control- For keeping the business profitable, portions should be controlled with, consistent storage sizes, calibrated food scales and correct sized serving utensils Wasting Food- Utilizing maximum quantity of food can help to decrease food cost percentage. For example beef trimmings from the tenderloins can be purposefully used into satay beef tips, which can be sold as moderate entry special. Buying Food for Home- Using food from the kitchen restaurant instead from the grocery store on a regular basis will skew food costs and profits. Bulk pricing helps to use food for a personal use and also pay it back. Poor Staff Education- employees who burn food, does not practice portion control or rotating food according to first in first out basis will definitely increase the food cost percentage. Poor Bookkeeping- food suppliers often make mistakes on invoice like charging double of the amount , not reflecting the payments made or delivering the food that is listed on invoice. Weekly food orders should be checked to ensure all of it is accounted for and also matches the invoice. Copies of all the payments made and invoices should be properly stored in case of any disputes. Using only one Food Vendor- Prices offered by different vendors should be compared and asked for a match. 2. Do you think that the beverage cost percentage might be rising or falling? Why? The beverage cost percentage will rise because it is directly proportional to the cost percentage of food which is also rising. 3. What issues might Jack be discovering with the inventory levels in the central stores and Preparation kitchen stores? Inventory control is an important way to ensure that the appropriate products are available when required and to control cost. Two types of inventory methods are required: Perpetual inventory- It is a continuous record of the purchases and deliveries and issues of food supply. A system involving the use of computer program needs to be in place to ensure that a perpetual inventory is maintained. Physical inventory- It is an actual physical count of the product in hand that is done on a periodic basis usually monthly. Physical inventory helps to verify perpetual inventory. Someone else who maintains the perpetual inventory does not maintain the physical inventory. Jack might have faced the following problem with the inventory levels in the central stores and preparation kitchen stores: Central stores do not compare the changes in the beginning and ending inventory to net purchases, issues and write offs because the inventory management system is not programmed to generate reliable reports of the total purchases from the vendors. The systems also do not generate any report of the total issues to the departments which needs to be reconciled with the ending inventory. There is also no evidence of the fact that the comptrollers has verified that the accounting records match with the annual purchases and issues because summary of the general ledger reports that account for storeroom inventory issues are not generated by the accounting system. The ending inventory also do not account for the city wide purchase order. The accounting syste ...Download file to see next pagesRead More
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