Pricing & Profitability
Is an expense that managers have the power to change.
Affected by the amount of business.
Can improve the bottom line.
What is a Controllable Cost?
A software system used to record and manage labor hours, sales, and inventory
What is POS?
An orderly and systematic approaching to purchasing a product
What is Procurement?
Any product that will spoil if not handled correctly. Include meat, seafood, poultry, dairy, eggs, produce, and some alcoholic beverages
What is Perishable products?
A tool that managers use to look at current business trends and predict how these will affect future business
What is Forecasting?
It refers to an operation’s policies and procedures to handle cash and credit payments.
These procedures protect the organization, the employees, and prevent theft or fraud.
What is Cash Control?
What is the largest cost in a foodservice operation?
Food
When an operation runs out of a product and is unable to offer it to guests.
What is Stockout?
Which inventory method assumes that older inventory is used up before newer inventory?
FIFO
Which document summarizes the amount of cash and cash equivalents entering and leaving a company?
What is CFS?
An organization’s ability to manage how much money it spends
What is Cost Control?
A collection of sales and cost information over certain time period
What is profit and loss statement?
An extra amount of stock on hand so that an operation does not run out.
What is Safety Stock?
A written document that states that the vendor will reimburse the operation for returning the rejected item
What is Credit Memorandum?
The total amount of money a business receives for products and services in the day to day operation of the business
Revenue
All costs not related to materials (food/beverages) and labor. Include rent, utilities, and services, marketing, legal fees, taxes, insurance, and repairs.
What is Overhead expenses?
Food cost percentage
Total food costs ÷ Total food sold × 100
A set quantity of an inventory item that should always be on hand
What is Par Level?
Any item that does not readily support the growth of bacteria. These products do not require special storage conditions (dried goods, processed food, and canned and bottled products are some examples)
What is Nonperishable products?
The equation a profit and loss statement is based on
Revenue – Expenses = Profits
The financial plan for a specific period of time
What is Operating Budget?
Menu sales price
Cost per portion ÷ Desired food cost % =
A measure of how often an operation sells its inventory and needs to replace it
What is an Inventory turnover?
A formal request for items to be issued from storage
What is a stock requisition?
A way to price menu items based on how much a guest is willing to pay rather than how much an item costs to produce
What is Perceived Value Pricing?