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BOSC1 > F&B Cost Control > Flashcards

F&B Cost Control Flashcards

1
Q

definition: Cost Control

A

analyzing costs to optimize profits by reducing business expense

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2
Q

% of restaurants that close within 3 years.

A

60%

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3
Q

what does PESTEL stand for? What is it?

A

Political, Economic, Social, Technological, Environmental, Legal

Analysis tool to assess external/macro forces organization is faced with

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4
Q

Product Life Cycle

A

Development, Introduction, Growth, Maturity, Decline

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5
Q

Development phase events

A

investmenting, cost intensive and no revenue

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6
Q

Introduction phase events

A

product availble, gradule sales, HIGH MARKETING and staff cost

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7
Q

Growth phase events

A

sales start to grow, increased profits

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8
Q

Maturity phase events

A

stable sales or increasing

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9
Q

Decline

A

decrease in sales and needs reshaping

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10
Q

Impact of a Manager

A

managing business, operations, people, personal skills

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11
Q

Commercial v Institutional

A

commercial: profit oriented and usually easily visible
institutional: cost driven, invisible to external customers

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12
Q

definition: fragmented

A

many competitors with no stand out establishment that can influence market

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13
Q

definition: concentrated

A

fewer competitors with big influencers in the market ie. apple

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14
Q

Basic business model

A

inputs -> transformation -> output

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15
Q

Expanded business model

A

inputs (memory) -> transformation (control) -> output (feedback)

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16
Q

definition: preventive control

A

reduce errors and minimize need for correction

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17
Q

definition: corrrective control

A

fix issues and acheive standard

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18
Q

definition: revenue mix

A

distribution between different types of revenue streams

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19
Q

defintion: prime costs

A

COGS + labor cost

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20
Q

gross revenue fromula

A

sum of all revenue

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21
Q

get rid

A

get rid

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22
Q

definition: fixed costs

A

cost that does not change regardless of production

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23
Q

definition: variable costs

A

cost changing depending on production levels

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24
Q

get rid

A

get rid

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25
Q

Gross Operating Profit (GOP) is used for?

A

stand-alone restaurants

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26
Q

definition: direct costs

A

business expenses that can be directly applied to either a specific goods or services. ie. flour and butter for croissants

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27
Q

definition: indirect costs

A

expenses that apply to more than one business activity, ie. utilities, overhead costs

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28
Q

definition: controllable costs

A

can be manipulated/controled by management ie. part time pay roll

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29
Q

definition: non-controllable costs

A

rent, full time employess

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30
Q

definition: capture rate

A

% of hotel guests that come and use hotel F&B outlet

31
Q

what is the REVPAS equation

A

total revenue / covers

32
Q

what is the REVPASH equation?

A

total revenue / (covers * open hours)

33
Q

True or False: Revpash can effectively be used for all restaurants

A

False, used mainly for high turnover restaurants

34
Q

Define: Flow Through

A

% of revenue retained as profit

35
Q

Objectives of Menu Engineering

A
  • improve profit margins
  • influencing position of items
  • align profitability with organizational objectives (create, reduce, eliminate, raise)
36
Q

X axis of product classification represents

A

profitability

37
Q

Y axis of product classification represents

A

popularity

38
Q

Product Classification: high popularity, low profitability

A

plough horse

39
Q

Product Classification: low profitability, low popularity

A

dog

40
Q

Product Classification: high popularity, high profitability

A

star

41
Q

Product Classification: low popularity, high profitability

A

puzzle

42
Q

Product Classification: plough horse

A

high popularity, low profitability

43
Q

Product Classification: dog

A

low profitability, low popularity

44
Q

Product Classification: star

A

high popularity, high profitability

45
Q

Product Classification: puzzle

A

low popularity, high profitability

46
Q

Name of the product classification system used

A

Dr. Smith and Kasavana

47
Q

List some limitations of the Product Classification

A
  • only an internal analysis
  • risk of over-engineering
  • time consuming
48
Q

Price is made of …

A

reputation, brand, appearance, and price itself

49
Q

3C’s of Pricing Policy

A

Company, Customer, Competition

50
Q

Define: Cost-based pricing

A

Cost focus and no customer consideration

51
Q

Define: Value-based pricing

A

Customer and sales ability focus

52
Q

4 Pricing Positioning strategy

A

skimming, alignment, penetration, survival

53
Q

Define: Skimming strategy

A

Price positioning strategy - maximizing profit and ROI by selling good products at high price

54
Q

Define: Alignment strategy

A

Price positioning strategy - matching competition

55
Q

Define: penetration strategy

A

Price positioning strategy - market disruption (new player with the same service but lower price)

56
Q

Define: Survival strategy

A

Price positioning strategy - covering at least the variable cost
new iPhone example

57
Q

Difference between procurement v purchasing?

A

procurement is the step of selecting vendors, establishing payment terms, selection, etc while purchasing is the direct link between internal department and suppliers (grants, approval, receipts of goods

58
Q

The price of using intermediaries are covered by ____ tier customers

A

Second tier customers, the final consumers pay the price

59
Q

what are AP and EP?

A

AP - as purchased (gross weight)

EP - edible portion (net weight)

60
Q

Describe the Pareto Law

A

about 80% of a firm’s sales are generated by approx. 20% of items in inventory

61
Q

Coffee, tea, and juice should be accounted for _____ cost.

A

Food cost. Do not include as a beverage cost

62
Q

Food available for sale =

A

beginning inventory + purchases during the accounting period

63
Q

definition: Food cost consumed

A

value of all food used or consumed by operation (including comp. sales, staff meals, spoilage etc.)

64
Q

Contribution Margin formula

A

Revenue - Variable Cost

65
Q

Contribution Margin % formula

A

Contribution Margin (Rev - VC) / Revenue

66
Q

Break even formula

A

Fixed cost / CM%

67
Q

Break Even in day

A

BE / (revenue / days)

68
Q

Break even by guest

A

BE / average check (average rate)

69
Q

define: budget

A

an outline of expectations a company wants to achieve in a period (usually a year)

70
Q

“an outline of expectations a company wants to achieve in a period (usually a year)” describes …

A

budget

71
Q

define: forecast

A

an estimate of a company’s future financial outcomes based on historical data

72
Q

“an estimate of a company’s future financial outcomes based on historical data” describes

A

forecast

73
Q

How are a budget and forecast different?

A

Budget is an expectation/goal whereas forecast is a prediction

BOSC1 (3 decks)

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