Food & Beverage Control
UNIT-1
Definition of Control
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Control is a process by which a manager attempts to direct, regulate and restrain the
action of people in order to achieve the desired goal.
An obvious first step is to established goals for the enterprise. Probably the most common
goal for all private enterprise is financial success, although this is by no means the onlyrange goal of business.
Others might relate to preserving the environment, promoting better health among the
population or etc.
To achieve the goals, management must setup any number of sub goal compatible with
its long-range plans. These tend to be more specific and usually more immediate in
nature.
For example, to achieve the goal of preserving the environment, it would be necessary to
make rather immediate plans to process or dispose of waste materials in appropriate
ways.
Objectives of F & B Control
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The food and beverage business can be characterized as one that involves raw materials
purchased, received, stored and issued for the purpose of manufacturing products for sale.
In these aspects many similarities exist between the hospitality industries to achieve the
goal of profitable operation.
This will entail a discussion of how costs and sales are controlled in food and beverage
operations.
The means employed by foodservice managers to directly, regulate and restrain the
actions of people, both directly and indirectly, in order to keep costs within acceptable
bounds, to account for revenues properly, and make profits.
F & B Control Cycle
STEP 1: PURCHASING
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Develop purchase specification
Supplier selection
Purchasing correct quantities
No collusion between property and supplier
Evaluation of purchasing process
STEP 2: RECEIVING
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Development of receiving procedures
Completion of necessary receiving reports (e.g., addressing financial and security
concerns)
STEP 3: STORING
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Effective use of perpetual & physical inventory systems
Control of product quality
Securing products from theft
Location of products within storage areas
STEP 4: ISSUING
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Product rotation concerns
Matching issues (issue & usage)
Purchasing as inventory is depleted
STEP 5: PRE-PREPARATION
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Mis-en-place
Minimizing food waste / maximizing nutrient retention
STEP 6: PREPARATION
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Use of standardized recipes
Use of portion control
Requirements for food and employee safety
STEP 7: SERVING
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Timing of incoming F&B orders
Portion control
Revenue management concerns
STEP 8: SERVICE
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Revenue control concerns
Serving alcoholic beverage responsibly
Sanitation and cleanliness
F&B server productivity
PROBLEMS IN F & B CONTROL
-Cash control & collection
-Maintenance of all costs in line with budget guidelines & current volume of business e.g. food,
beverage, payroll etc.
-Maintenance of a tight & efficient control of all F & B stocks
-Maintenance of up to date costing & pricing of all menu items.
-Maintenance of an efficient F & B control system giving analyses statistical date of all business
done.
There is a dividing line between those F & B department that manage these problems & hence
function more efficiently & those that just react to the problems only ever treating the symptoms
& not the cause. It is important therefore that potential problem area be identified in advance by
management so that they can be planned for & successfully managed when & if they occur. This
is only possible if there is some feedback from the control function back to management so that
they are kept constantly aware of, first changes occurring within the F & B area itself, & second
changes occurring outside the establishment that may have an effect.
METHODOLOGY OF F & B CONTROL
The development of an effective system of food and beverage control resolves itself into three
distinctive phases
PHASE-1
Basic policy decisions
Dealing with basic policy decisions. This constitutes of basic policy decisions in relation to
financial and catering policies in the establishment.
Financial Policy
This is where setting of profit targets are done, planning for profit margins for menu or wine list.
Marketing and catering Policy
This deals with the market to be aimed at, the market you are going to cater for in order to satisfy
it e.g. you have to identify the customer, his average spending power, decide what menu will
satisfy the spending power, decide what menu will satisfy the customer, determine the type of
service determine the portion service and choose the appropriate décor or atmosphere.
PHASE-2
Operational Control
Cycle e.g. quantity inspection of incoming good, technological procedures i.e. use of written
store requisition this should be planned so as to cover the cycle of food and beverage
preparation, operational control in relation to the control cycle is.
 Buying
 Receiving
 Storing and issuing
 Preparation
 Selling
PHASE-3
After Event Control
 There must be food and beverage report: For reasons of the specific character of food
and beverage operations food is highly perishable coked form or raw and always
unpredictable trend and unexpected change in order to control a food operation
effectively the manager must have a daily, weekly and other reports covering longer
periods.
 Assessment of results: It is concerned with an appreciation of how far the actual results
of food and beverage results correspond with expected results.
 Corrective action where appropriate: Any action that is taken following the receipt of
food and beverage report e.g. malpractices on the park of the staffs must be corrected.
PERSONNEL MANAGEMENT IN F & B CONTROL
1. Training: Training is a process by which managers teach employees how work is to be done,
given the standards and standards procedures established.
Example; if management has established a standard 4 - ounce portion size for hamburgers, then
all employees responsible for producing portions of hamburgers must be made aware that 4
ounces is the correct portion size.
2. Setting Example: Employees in an operation follow the examples set by the manager — the
manager’s behavior, manner, responses to questions, and even a failure to speak or take action in
some situations.
The behavior of individuals in a group tends to be influenced by the actions, statements and
attitudes of their leaders.
Work Habits, attitudes, behavior, spirit of a manager are the evident.
If the manager who has occasion to help employees plate food for the dining room serves
incorrect portion sizes, employees will be more likely to do the same when the manager is not
there. Similarly, if a manager is inclined to wrap parcels of food to take home for personal use,
employees will be more likely to do so.
3. Observing and Correcting Employee Actions: One of a manager’s important tasks is to
observe the actions of all employees continually as they go about their daily jobs, judging those
actions in the light of the standards and standard procedures established for their work. If any
employee is failing to follow the standards, it is a manager’s responsibility to correct their
performance to the extent necessary at the appropriate time.
UNIT-2
COST CONCEPT
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Accountants define a cost as a reduction in the value of an asset for the purpose of
securing benefit or gains.
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In F&B Business cost is defined as the expense to a hotel or restaurant of goods or
service when the goods are consumed or the service rendered.
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Food and beverage are “Consumed” when they are used, wastefully or otherwise, and are
no longer available for the purpose which they were acquired.(Units: weight, volume or
total value)
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The cost of labor is incurred when people are on duty, whether or not they are working
and whether they are paid at the end of the shift or at some later date. (Hourly or weekly
or monthly)
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Fixed Cost (FC) and Variable Cost (VC) are used to distinguished between those cost
that have no direct relationship to business and those that do.
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Fixed Cost are those that are normally unaffected by changes in sales volume. Such as =
real estate taxes, insurance premiums, depreciation, repairs and maintenance, rent or
occupancy cost, most utility cost, advertisement, professional services.
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The term fixed should never taken to mean static or unchanging but merely to indicate
that any changes that may occur in such cost are related only indirectly or distantly to
changes in business volume.
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Variable Cost are those that are clearly related to business volume. As business volume
increase, variable cost will increase and vice versa.
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Food & Beverage cost are considered directly variable cost. Direct Variable Cost are
those that are directly linked to volume of business increase and decrease of volume
correspondingly.
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Payroll Cost includes salaries and wages and employee benefits and often referred as
Labor Cost.
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Because labor cost consist of fixed and variable element it is known as semi-variable
cost, meaning a portion should change in short-term and the other portion remains
unchanged.
CONTROLLABLE AND NON-CONTROLLABLE COST
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Controllable cost are those that can be change in the short term such as Direct Variable
Cost, Wages, Advertising & Promotion, Utilities, Repairs & Maintenance and
Administration and General Expenses.
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Non-Controllable cost are those that cannot normally be changed in short-term such as
fixed cost like Rent, Interest on a mortgage, Real estate taxes, License fee and
Depreciation.
Unit Cost may be food & beverage portion as in the cost of one item or hourly unit of work. In
F&B business unit cost are commonly in average unit cost rather than actual unit cost.
Total Cost are the total of food & beverage portions served in one period such as a week or a
month or total cost of labor for one period.
Prime Cost is a term used in the Hotel Industry to refer to the cost of materials and labor. (Food,
Beverage and Payroll)
Historical and Planned Costs
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Historical cost are all cost are historical - that is, that they can be found in business
records, book of account, financial statements, invoices, employees’ time card and other
similar records. It is used for establishing unit cost, determining menu prices and
comparing present with past labor cost.
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It will be used for planning and determining the future to develop planned costs projections of what cost will be or should be for a future period. It is often called as
Budgeting.
Cost percentage may vary considerably from one foodservice operation to other. This is due to
many possible reasons.
Basically there are two types of foodservice operation.
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Those that operate at low profit margin and depends on relatively high business
volume.
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Those that operate at relatively high profit margin thus do not require high business
volume.
SALES CONCEPT
Sales Defined
In general, the term sale is defined as revenue resulting from the exchange for products (Food &
Beverage) and services (Waiter) for value ($$).
The sales concept in F&B operation usually can be express as: monetary and non-monetary.
Total Sales is a term that refers to the total volume of expressed in dollar term for instant any
given period, such as a week, a month or a year.
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By Category Total dollar volume of sales by category are total food sales or total
beverage sales. Or total steak sales or seafood sales.
By Server This is total dollar volume of sales for which a given server has been
responsible in a given period. This is to help the management to make judgment on
employee’s performance.
By Seat Usually for a year’s period. Total Dollar sales divided by the number of seats in
the restaurant.
Sales Price refers to the amount charged each customer purchasing one unit of a particular item.
It can be a single meal or entire meal.
Average Sale in business is determined by adding individual sales to determine a total and then
dividing that total by the number of individual sales. Two types of commonly calculated
averages are: average sale per customer and average sale per server.
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Per Customer is the result of dividing total dollar sales by the number of sales or
customer.
Per Server is total dollar sales for an individual server divided by number of customer
served by that individual.
COST TO SALES RATIO
Food service establishment calculate cost in rupees and compare those cost to sales in rupees.
This enables them to discuss the relationship between cost and sales or the cost per rupee of sale.
Cost ÷ Sales = Cost per rupee of sale
decimal answer, and any decimal can be converted to a percentage if one multiplies it by 100 and
adds a percent sign (%).
Cost ÷ Sales x 100 = Cost%
INR 312,090 ÷ INR 891,687 = .35 and .35 x 100 = 35.0 %
Food cost ÷ Food sales x 100 = Food cost%
Beverage cost ÷ Beverage sales x 100 = Beverage cost%
Labor cost ÷ Total sales x 100 = Labor cost%
The formula also can be used to determine the Sales price if the cost% is known.
Cost ÷ cost% = Sales (or Sales Price)
If the given cost percentage were 30.0 percent and the food cost for the item were $3.60, the
appropriate sales price would be INR12.00, illustrated here
30.0 % ÷ 100 = 0.3
INR 3.60 ÷ 0.3 = INR 12.00
The formula also can be use to determine the cost if the spending power and cost% is known.
Suppose this banquet manager is dealing with a group willing to spend INR15.00 per person for
a banquet, and the same given 30.0 percent cost percent is to apply. Calculation of the maximum
permissible cost per person is facilitated by rearranging the formula once again:
Sales x Cost % (expressed as a decimal) = Cost
Sales X Cost % = Cost
So the cost per person can be calculated as INR 4.50:
30.0 % ÷ 100 = 0.3
INR 15.00 X 0.3 = INR 4.50
CLASSIFICATION OF COST
There are various types of cost which are:
1. Actual Cost: The actual cost is what a cost or expenses actually was. For example, the payroll
records and check made out to employees will indicate the actual labor cost for that payroll
period.
2. Budgeted Cost: A budgeted cost is what a cost expected to be for a period time. For example,
for an anticipated level of sales for a month, we might budget or forecast what the labor cost
should be for that period. Later, that budgeted cost would be compared with the actual labor cost
in order to determine the causes of any differences.
3. Controllable Cost: A cost that can be changed in the short term. Direct costs are generally
more easily controllable than indirect costs. Variable costs are normally controllable. Certain
fixed costs are controllable, including advertising, promotions, utilities, repairs, etc.
4. Non-Controllable Cost: Are those costs that cannot be changed in the short term. These are
usually fixed costs. These typically include items such rent, depreciation, and taxes.
5. Fixed Cost: Are those that are normally unaffected by changes in sales volume. The term
fixed should never be taken to mean unchanging, merely to indicate that any changes that may
occur in such costs are related only indirectly to changes in sales volume. Examples: Rent,
Utilities, Insurance Premiums.
6. Variable Cost: A variable cost is one that varies on a linear basis with revenue, those that are
clearly related to business volume. Directly variable costs are those that are directly linked to
volume of business, such that every increase or decrease in volume brings a corresponding
increase or decrease in cost. The obvious variable costs are food and beverage. The more food
and beverage sold the more that have to be purchased. If revenue is zero, then the cost should
also be zero. As business volume increases, so do these costs. As business volume decreases, so
do these costs.
7. Direct Cost: Direct cost is a cost that is the responsibility of a particular department or
department manager. Most direct costs will go up or down, to a greater or lesser degree, as
revenue goes up and down. Because of this, they are considered to be controllable by, and thus
the responsibility of, the department to which they are charged. Examples of this type of cost
would be food, beverages, wages, operating supplies and services beverages and linen and
laundry.
8. Indirect Cost: An indirect cost is commonly referred to as an undistributed cost or one that
cannot easily be identified with a particular department or area, and thus cannot be charge to any
specific department. For example, property operation, maintenance and energy cost could only
be charged to various departments (such as linen or food and beverage) with difficulty. Even if
this difficulty could be overcome, it must still be recognized that indirect costs cannot normally
be made the responsibility of an operating department manager. Indirect costs are also sometimes
referred to as overhead cost.
9. Joint Cost: Is a cost shared by and the responsibility of two or more department or area. The
cost of dining room waiter who serves both food and beverage is an example. His labor is a joint
cost and should be charged to the food department and to the beverage department. Most indirect
costs are also joint costs.
10. Sunk Cost: A cost that has been incurred and cannot be reversed. Also referred to as a
"stranded cost”. A worn-out piece of equipment bought several years ago is a sunk cost because
the cost of buying it cannot be reversed.
11. Opportunity Cost: The cost of not doing something or the profit lost. An organization can
invest its surplus cash in marketable securities at 10 percent, or leave the money in the bank at 6
percent. If it buys marketable securities, its opportunity cost is 6 percent. Another way to look at
it is to say that it is making 10 percent on the investment, less the opportunity cost of 6 percent;
therefore the net gain is 4 percent.
12. Standard Cost: A standard cost is what the cost should be for a given volume or level of
revenue. For example, a standard cost can be develop by costing the recipe for a given menu
item. If ten of these menu items are sold, the total standard cost should be ten item the individual
recipe cost. Another illustration would be personnel cost (wages) for cleaning at dining area. If
the area attendant is paid Rs. 4.00 an hour, and it takes one half hour to clean the area, the
standard labor cost for cleaning the area would be Rs. 2.00. While, if the service person take 7
hours to clean the area, total standard cost would be Rs. 28.
13. Prime Costs: Is a term used in the food and beverage industry to refer to the cost of
materials and labor.
Prime Cost = Food Cost + Beverage Cost + Labor Cost
14. Historical Costs and Planned Costs:
Historical costs are figures that have already happened and can be found in the business records.
Planned costs is made by using historical costs in the present to determine what is likely to
happen in a future period to come. These numbers are also used in budgeting.
COST/VOLUME/PROFIT RELATIONSHIP
The key to understand cost/volume/profit relationship lies in understanding that fixed costs exist
in an operation regardless of sale volume and that it is necessary to generate sufficient total
volume to cover both fixed and variable costs as well as desired profit.
It should be apparent that relationships exist between and among sales, cost of sales, cost of
labor, cost of overhead and profit. In fact these relationships can be expressed as follows:
Sales = Cost of sales + Cost of labor + cost of overhead + profit.
The relationship formula
Because cost of sale is variable, cost of labor includes fixed and variable elements and cost of
overhead is fixed, one should restate this equation as follows:
S = VC + FC + P
In fact this is the basic equation of cost/volume/profit analysis
S = Sales
VC = Variable Cost
FC = Fixed Cost
P = Profit.
BREAK EVEN POINT
No business can be termed profitable until all of the fixed cost have been met.
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If sales cannot cover both variable cost & fixed cost it is operating at a loss
If sales can cover both variable cost & fixed cost exactly but insufficient to provide any
profit.
(i.e, profit = 0) the business is said to be operating at the breakeven point (BE)
Changing the Break Even Point
Two ways to change Break Even point is by
1. Increasing menu price
2. Reducing Variable cost
UNIT-3
A budget is a quantitative expression of a plan for a defined period of time. It may include
planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities
and cash flows. It expresses strategic plans of business units, organizations, activities or events in
measurable terms.
BUDGETING
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Budgeting is part of the planning process. It can involve decisions concerning day-to-day
management of an operation or, on the other hand, involve plans for as far ahead five
years.
Budgeting is used by most firms to aid in controlling costs and to ensure that costs are
kept in line with forecast revenues.
In order to make meaningful decisions about the future, a manager must look ahead. One
way to look ahead is to prepare budgets or forecasts.
A forecast may be very simple. For a restaurant owner/ operator, a budget may be no
more than looking ahead to tomorrow, estimating how many customers will eat in the
restaurant, and purchasing food and supplies to accommodate this need.
On the other hand, in a larger organization, a budget may entail forecasts up to five years
ahead (such as for furniture and equipment purchases) as well as day to day budgets
(such as staff scheduling).
Budgets are not always expressed in monetary terms. They could involve numbers of
customers to be served, number of rooms to be occupied, number of employees required
or some other unit rather than money.
OBJECTIVES
1. To provide organized estimates of future revenues and expenses, manpower requirements or
equipment needs with estimate broken down by time period and / or department.
2. To provide a coordinated management policy both short and long term, expressed primarily in
accounting terms.
3. To provide a method of control by comparing actual results with budgeted plans, and to take
corrective action if necessary.
TYPES OF BUDGET
Capital Budget: It deals with assets and capital funds of a business.
Operating Budget: Deals with the income and expenditure of a business.
Master Budget: It in co-operates all the income and expenditure plus the assets and liabilities of
a business.
Departmental Budget: It is done in respect to the single department of business e.g. special
functions like banqueting, wedding receptions, the sales and purchases have to be budgeted for.
Fixed Budget: This is a budget which is independent on the level of turnover e.g. advertising
office administration, maintenance budget; this is because short-run changes in the volume of
turnover have no effect on the budget concerned.
Flexible Budget: Budget which provides for several level of turn-over and pre-determines cost
or cash flow accordingly, for example changes in the rate of room occupancy may affect labor
cost in a small hotel.
ADVANTAGES OF BUDGETING
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They involve participation of employees in the planning process, thus improving
motivation and communication.
They necessitate, in budget preparation, consideration of alternative courses of action.
They allow a goal, a standard of performance, to be established with subsequent
comparison of actual result with that standard.
Flexible budgets permit quick adaptation to unforeseen, changed conditions.
They require those involved to be forward looking, rather than to be looking only at past
events.
DISADVANTAGES OF BUDGETING
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Time constraints
Unpredictable future
Confidential matters
Spending to budget problem
BUDGETARY CONTROL PROCESS
BUDGETING FOR FOOD & BEVERAGE OPERATIONS
1. SALES BUDGET: The purpose of the sales budget is to pre-determine the volume of sales in
respect to a trading period; this enables an assessment of the sales performance in a business at
the end of that period.
IMPORTANCE OF SALES BUDGET:
1. It has an influence on the volume of sales on profit.
2. It influences the preparation of other budgets.
3. Budgeted volume of sales will influence.
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Budget food & beverage cost
Labour cost
Overhead cost
4. Budgeted volume of sales will depend on
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Past performance
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Current trends
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Any limiting factor which may be in operation with this budget.
DEVELOPMENT OF SALES BUDGET
Factors to be considered:
For each revenue produced department special
 Circumstances affecting each department.
 Complete analysis of the previous years, actual sales figure for each department.
 Analyses of the sales mix percentages.
 A careful study of probable future trends and purchases.
 Any significance change in the sales milk must be analyzed to see what effect will have
on the purchase budget.
 Any changed in the use of food stuffs e.g. pre-packed commodities or convenience foods
must be noted and studied for effect on the cost of purchases.
 Any change in supplies.
2. BUDGETED PROFIT & LOSS ACCOUNT
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This is to pre-determine in the respect to a particular trading period all the income and
expenditure of a business as well as the net profit to be carried. E.g. departmental gross
profit, labor cost percentage, overheads percentage and net profit percentage.
3. LABOUR COST BUDGET
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Labour cost budget are budgeted for in relation to the budgeted volume of sales, the
higher the volume of sales the higher the total cost of labour.
A given increase in the volume of sales must not necessarily result in a proportionate
increase in labour cost. When sales arising many components of the total cost of labour
remain fixed e.g. management and supervisory salary. Labour costs are fixed and others
tend to vary in the same direction as the volume of sales.
FACTORS CONSIDERED IN PREPARATION OF LABOUR COST BUDGET
 The number and grade of each staff in each department.
 The budgeted rate of paying for each grade of staff.
 Casual and part time labourers.
 Cost of national health insurance.
 All accommodation, holidays with pay, bonuses and commission.
UNIT-4
FOOD & PURCHASING CONTROL
Responsibility for Purchasing
The responsibility of purchasing can be delegate to anyone in the foodservice operation
depending on organizational structure and management policies.
Control Process and Purchasing
Four steps in the control process apply here:
1. Requiring that standards and standard procedures be established
2. That employees be trained to follow those standards and standard procedures
3. That employee out-put be monitored and compared to established standards
4. Remedial action be taken as needed
Perishable and Non-perishable
Perishable are those items, typically fresh foods, those have a comparatively short useful life
after they have been received. They should be purchased for immediate use only as they
deteriorate quickly.
Non-perishable are those food items that have a longer shelf life. They are often referred to as
groceries or staple. They may be stored in the containers in which they are received, stored on
shelf at room temperature for weeks or months. They do not deteriorate quickly.
Developing Standards & Standard Procedure
Establishing control over purchasing ensure a continuing supply of sufficient quantities of the
necessary foods, with each of quality appropriate to its intended use and purchase at the most
favorable price.
Standard must be developed for:
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The quality of food purchased
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The quantity of food purchased
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The price at which food is purchased
Establishing Quality Standards
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It is important first to determine which perishable & non-perishable food is required in
order to produce products of consistent quality.
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Thus it is important to draw up the list of all food items to be purchased, including those
specific and distinctive characteristic that best describe the desired quality of each in
written description also known as standard purchase specifications.
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It is usually base on federal grading or common market grading.
Through Standard Purchasing Specification:
1. To determine exact requirement in advance for any products
2. To purchase according to specification to prepare several different items on the
menu.
3. They eliminate misunderstanding
4. To have standard competitive bidding
5. They eliminate for detail verbal description
6. To facilitate checking food as it is received.
Establishing Quantity Standards
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Quantity standard for purchasing are subjected to continual review and revision, often on
a daily basis.
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Perishable Item .The correct amount must be purchased to avoid wastage.
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A basic requirement of the purchasing routine is to take daily inventory of perishable.
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The routine requires that determinations be made of anticipate total needs for each item,
base on future menus and often on experience as well.
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Non-perishable items does not present the problem of rapid deterioration, the do
represent considerable amount of money invested in material in storage. The goal here is
to avoid excessive quantities on hand. Through proper planning.
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The ways to maintain inventories of non perishables at appropriate levels, most are
variations on two basic methods:
1. Periodic order method
A method for ordering food or beverages based on fixed order dates and variable order
quantities. The calculation of the amount of each item to order is comparatively simple:
Amount required for the upcoming period-Amount presently on hand+ Amount wanted
on hand at the end of the period to last until the next delivery =Amount to order
2. Perpetual inventory method:
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orders for non perishables are placed every two weeks, one of the items ordered is
crushed tomatoes, purchased in cans, packed 6 cans to a case. The item is used at the rate
of 7 cans per week, and delivery normally takes five days from the date an order is
placed. If the steward in this establishment found 9 cans on the shelf, anticipated a use of
14 cans during the upcoming period of approximately two weeks, and wanted 10 cans on
hand at the end of that period, the calculation would be:
14 cans required - 9 cans on hand +10 cans to be left at the end of the period
(desired ending inventory) = 15 cans to be ordered on this date
Perpetual Inventory Method
1. To ensure that quantity purchase are sufficient not excessive
2. To provide effective control on stored item for the future.
The reorder point is quite simply the number of units to which the supply on hand should
decrease before additional orders are placed.
The Par Stock means simply the maximum quantity of a given item that should be on hand.
This helps to
1. Storage space
2. Limits on total value of inventory
3. Desired frequency of ordering
4. Usage
5. Purveyors’ minimum order requirements
FOOD RECEIVING CONTROL
The primary objective of receiving control is to verify that quantities, qualities and price of food
delivered conform to orders placed.
The person that is usually responsible for this job is given the job title as “receiving clerk’.
ESTABLISHING STANDARD FOR RECEIVING
Established standards to govern the receiving process are:
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The quantity delivered should be the same as the quantity listed on order forms and also
should be identical as the quantity listed on the invoice or delivery bill.
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The quality of item delivered should conform to the establishment’s standard purchase
specification for that item
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The prices on the invoice should be the same as those stated on the order form
Example of Standard procedure for receiving
1. Verify that the quantity, quality and price for each item delivered conforms exactly to the
order place
2. Acknowledge that quantity, quality and price have been verified by stamping the invoice
with the rubber invoice stamp provided for that purpose
3. List all invoices for foods delivered on a given day on the Receiving Clerk’s Daily
Report for that day, and complete the report as required, or enter appropriate information
directly into a computer terminal
4. Forward complete paperwork to proper personnel
5. Move food to appropriate storage areas.
INVOICE STAMP: Rubber stamp used by a receiver to overprint a small form on an invoice
for the purpose of recording the data on which goods were received, as well as the signature of
the several individuals verifying the accuracy of data on the invoice.
1. Verification of the date on which food was received
2. The signature of the clerk receiving the food who vouches for the accuracy of quantity,
quality and price.
3. The steward’s signature, indicating that the steward knows the food has been delivered
4. The food controller’s verification of the arithmetical accuracy of the bill.
5. Signatory approval of the bill for payment by an authorized individual before a check is
drawn.
FOOD STORING & ISSUING CONTROL
STORING CONTROL:
ESTABLISHING STANDARDS AND STANDARD PROCEDURES FOR STORING
In general, the standard established for storing food should address five principal
concerns:
1. Condition of facilities and equipment
2. Arrangement of Food
3. Security of Storage areas
4. Location of Storage Facilities
5. Dating and pricing of stored food
ISSUING CONTROL:
ESTABLISHING STANDARDS AND STANDARD PROCEDURES FOR ISSUING
There are two elements in the issuing process:
(1) The physical movement of foods from storage facilities to food preparation areas
Physical Movement of Food from storage facilities is the movement of food from the storage
facilities to the preparation area. Practice for doing this varies from one establishment to other
establishment due to the management policies and procedures and priority.
(2) The record keeping associated with determining the cost of the food issued.
DIRECT: Direct is in-charge to food cost as they are received directly on assumption that these
perishable item have been purchased for immediate use. Figures in “FOOD DIRECT” column in
Receiving Clerk’s Daily Report will be calculated directly into the particular day food cost.
STORES: The food category known as stores was previously described as consisting of staples.
When purchased, these foods are considered part of inventory until issued for use and are not
included in cost figures until they are issued. Therefore, it follows that records of issues must be
kept in order to determine the cost of stores. For control purposes, a system must be established
to ensure that no stores are issued unless kitchen personnel submit lists of the items and
quantities needed.
The Requisition is a form filled in by a member of the kitchen staff. It lists the items and
quantities of stores that the kitchen staff needs for the current day’s production. Each requisition
should be reviewed by the chef, who should check to see that all required items are listed and
that the quantity listed for each is accurate. If the list of items and quantities is correct, the chef
signs and thus approves the requisition.
FOOD PRODUCTION CONTROL
1. PORTIONS
 The standards and standard procedures for production control are designed to ensure that
all portions of any given item conform to management ’ s plans for that item and that, as
far as possible, each portion of any given item is identical to all other portions of the
same item.
 Portion for any given menu should be identical in 4 respect.
1. Ingredients
2. Proportions of ingredients
3. Production methods
4. Quantity
 To achieved the 4 respected areas we need to have
1. Standard Portion Size
2. Standard Recipe
3. Standard Portion Cost
STANDARD PORTION SIZE
 One of the most important standards that any foodservice operation must establish is the
standard portion size, defined as the quantity of any item that is to be served each time
that item is ordered. In effect, the standard portion size for any item is the fixed quantity
of a given menu item, that management intends to give each customer in return for the
fixed selling price identified in the menu. It is possible and desirable for management to
establish these fixed quantities in very clear terms. Every item on a menu can be
quantified in one of three ways: by weight, by volume, or by count.
Every item on a menu can be quantified in one of the three way:
 By Weight: Can be expresses in ounce or grams used to measure portion sizes for a
number of menu items.
 By Volume: Is used as the measure for portion of many menu items usually that of liquid
in nature, Milk, soup, juices of coffees
 By Count: Used to identify portion size, such as sausage, eggs and shrimps
Many devices are available to help foodservice operators standardize portion sizes. Among the
more common are the aforementioned scoops and slotted spoons, as well as ladles, portion
scales, and measuring cups. Even the number scale or dial on a slicing machine, designed to
regulate the thickness of slices, can aid in standardizing portion size: A manager may stipulate a
particular number of slices of an item on a sandwich and then direct that the item be sliced with
the dial at a particular setting
Advantages for practicing Standard Portion Size
 It helps reduce customer discontent as the customer cannot compare his or her portion
unfavorably with that of other customer and feel dissatisfied or cheated.
 It helps to eliminate animosity of miscommunication between the kitchen staff and the
server over the portion size that lead to delay in the serving of food.
 It helps to eliminate excessive costs of over portioned menu.
 Price on the menu is usually fixed, thus it will also reflect the portion size of the menu. If
the portion size is constantly change then it will dissatisfied the customer and server.
STANDARD RECIPE
 Another important production standard is the recipe. A recipe is a list of the ingredients
and the quantities of those ingredients needed to produce a particular item, along with a
procedure or method to follow. A standard recipe is the recipe that has been designated
the correct one to use in a given establishment.
 Standard recipes help to ensure that the quality of any item will be the same each time the
item is produced. They also help to establish consistency of taste, appearance, and
customer acceptance.
 The same ingredients are used in the correct proportions and the same procedure is
followed, the results should be nearly identical each time the standard recipe is used, even
if different people are doing the work. In addition, returning customers will be more
likely to receive items of identical quality.
 Standard recipes are also very important to food control. Without standard recipes, costs
cannot be controlled effectively. If a menu item is produced by different met
methods, with
different ingredients, and in different proportions each time it is made, costs will be
different each time any given quantity is produced.
produced
STANDARD PORTION COST
 A standard portion cost can be calculated for every item on every menu, provided th
that the
ingredients, proportions, production methods, and portion sizes have been standardized as
previously discussed. In general, calculating standard portion cost merely requires that
one determine the cost of each ingredient used to produce a quantity of
of a given menu
item, add the costs of the individual ingredients to arrive at a total, and then divide the
total by the number of portions produced.
 Standard portion cost is defined as the dollar amount that a standard portion should cost,
given the standards
rds and standard procedures for its production. The standard portion cost
for a given menu item can be viewed as a budget for the production of one portion of that
item. There are several reasons for determining standard portion costs. The most obvious
is that one should have a reasonably clear idea of the cost of a menu item before
establishing a menu sales price for that item.
item
STANDARD YIELD
 Yield
ield factor is defined as the percent of a whole purchase unit of
of meat, poultry or fish
that is available for portioning after any required in-house
in house processing has been
completed.
 Quantity = Number of portions X portion size (as a decimal) /Yield percentage
UNIT-5
BEVERAGE PRODUCTION CONTROL
•
To ensure that all drinks are prepared accordingly to management’s specifications
•
To guard against excessive costs that can develop in the production process
Establishing Standards and Standard procedures for production
 Standard must be established for the:
 Quantity of the ingredients used
 Proportion of the ingredients used
 Drink sizes
 To have some reasonable assurance that a drink will meet expectations each time it is
ordered.
 If drinks are served accordingly to the formula and in standard portion, then the cost for
each portion to sales should be the same.
Establishing Quantity Standard and Standard Procedures
Devices for Measuring Standard Quantities
 Four measuring devices are commonly used by bartenders:
 Shot Glasses (Plain and lined)
 Jiggers (Double ended stainless steel Measuring device that resembles the shot
glass)
 The pourer (Fitted on top of a bottle)
 The automated Dispenser (predetermined measures of liquor)
 Free pour from own judgment or eyesight
Establishing Quality Standards and Standard Procedures
 Standard Recipes
 Establishing Standard Portion Cost
 Straight Drinks (formula)
 Mixed Drinks and Cocktails (Detail Recipe)
Controlling Revenue
Possible control of problems
 Working with the cash drawer open
 Under-ringing sales
 Overcharging customer
 Undercharging customer
 Over pouring
 Under pouring
 Diluting bottle contents
 Bringing one’s own bottle into the bar
 Charging for drinks not served
 Drinking on the job
Beverage Sales Monitoring
 The Cost Approach
 Cost Percentage Methods
 Monthly Calculation
 Daily Cost Calculation
 Cost Calculation by Category
 Standard Cost Method (Actual – Standard Cost)
 The Liquid Measure Approach
 Ounce-Control Method (Quantity stock taking daily)
 The Sales Value Approach
 Actual Sales Record (Recipe Detail Comparison)
 Average Sales Value Method (Per-bottle value)
 Standard Deviation Method (Statistical EDP)
 Inventory Turnover
Monitoring Production Performance and Taking Corrective Action
 A manager can personally observe bar operations on a regular basis
 A designated employee, such as a head bartender, can observe others working at the bar
and report unacceptable performance and problems to management
 Individual unknown to the bartenders can be hired to patronize the bar, observe the
employees, not problems and report to management
 Closed-circuit television systems can be installed to permit observation of bartenders and
bar operations from some remote location.