Menu Engineering Chaper 11 Flashcards
What is the primary goal of cost-control procedures?
To keep excess cost from developing and maintain cost percentages within predetermined bounds.
Why is it important to focus on dollars rather than percentages in foodservice?
Because in the final analysis, we take dollars to the bank, not percentages.
What determines how much profit there will be in foodservice?
The contribution margin of menu items and the number of customers attracted.
True or False: Managers prefer to sell items with lower contribution margins.
False
What technique is useful for analyzing menu sales and evaluating items relative to their contribution to profit?
Menu engineering
Fill in the blank: The contribution margin is defined as _______.
selling price—variable cost
What does menu engineering monitor?
The effectiveness of efforts to maximize gross revenue in a menu.
What is the primary goal of menu engineering?
Maximize a restaurant’s profitability by encouraging customers to buy desired items and discouraging unwanted purchases.
Who created the concept of menu engineering?
Michael Kasavana & Donald I. Smith
What does menu engineering help managers evaluate?
Pricing, retention, replacement, or repositioning of menu items.
What is the formula for calculating Menu Mix Percentage?
No. sold of a specific menu item / Total no. of all items sold
What does the Contribution Margin of a menu item represent?
Selling Price – Food Costs
How is Contribution Margin used in menu engineering?
It indicates how much money contributes to paying labor, operating expenses, and profit.
What are the four classifications of menu items in the BCG Matrix?
- Stars
- Plow Horse
- Puzzles
- Dogs
What characterizes a ‘Star’ menu item?
Extremely popular and have a high contribution margin.
What is a ‘Plow Horse’ menu item?
High in popularity but low in contribution margin.
Define a ‘Puzzle’ menu item.
Generally low in popularity and high in contribution margin.
What defines a ‘Dog’ menu item?
Low in popularity and low in contribution margin.
What changes should be made to ‘Dogs’ according to menu engineering?
Remove them from the menu.
What is the purpose of Menu Engineering Software?
Processes menu mix and contribution margin data for evaluation of menu changes.
How do you calculate food cost percentage?
Food cost / total sales * 100
If 10 patties cost $50, what is the food cost percentage if sold for $10 each?
50%
What is the ideal strategy for ‘Puzzles’ according to menu engineering?
Reposition them on the menu.
What is the significance of the BCG Matrix?
Helps analyze business units and allocate resources.
What is the contribution margin of a patty priced at $100 with a food cost of $20?
$80.00
What should be done with ‘Stars’ according to menu engineering strategies?
Retain them.
