This course focuses on the principles and procedures involved in an effective system of food, beverage and labour controls for the hospitality industry. This course provides the fundamentals for gathering information,
developing forms and procedures, assessing and evaluating the information and applying the results to maintain efficient food, beverage and labour cost control. Topics include: the basic control procedures used, food and beverage costing, labour cost analysis, pricing methods and computer applications. A restaurant management simulation program exercise is incorporated to enhance the cost control theory.
- Effective cost control in the food and beverage industry
- Standards used for average check, forecasting sales, food and beverage cost percentages, labour productivity, and other cost percentages as a means to identify cost control problems
- Operating budget in planning and cost management
- Actual food cost and food cost percentage
- Standard food cost and food cost percentage given standardized recipes and sales history
- Control considerations in the areas of food purchasing, receiving, storage, issuing production and service
- Actual and standard beverage cost and beverage cost percentages
- Unique control in the areas of beverage purchasing, storage, issuing, production and service
- Mechanism and principle behind basic inventory control for a beverage operation
- Revenue control systems including prechecking, guest check controls and cashiering controls in food and beverage operations
- Labour cost control practices in food and beverage
- Scheduling and human resource management issues in food and beverage operations and how these impact labour cost
- Productivity ratios for labour cost control
- Ratios for control of other operating expenses
- Scientific and qualitative menu pricing considerations
- Menu for profitability and popularity
- Functions and control applications of a POS
- Spreadsheets to develop flexible budgets
- Breakeven analysis in decision making and planning
- Employee and customer theft; how and why it happens; how it can be detected
- Income statements, average check, cost and net income per guest figures.
- The role of computers to assist with purchasing functions, controlling inventory, analyzing business and determining personnel requirements, controlling labour costs, generating daily reports of costs and sales for management, and budgeting and preparing financial statements.
- Control systems commonly used within the rooms department of a hotel to control sales, energy costs, labour costs and rooms supplies expense
Methods Of Instruction
This course uses lectures, computer lab sessions and case studies. Students are encouraged to participate in group discussions of case studies and control experiences.
Means of Assessment
Term Project 20-30%
Mid-term Examination 20-30%
Final Examination 20-30%
STUDENTS MUST COMPLETE ALL COMPONENTS OF THE COURSE TO PASS THE COURSE.
The student will be able to:
- Identify basic principles of controls in the food & beverage sector and list areas of control that a manager is responsible for
- Calculate actual and standard food and beverage cost for an operation
- Distinguish between standard, actual and budget food & beverage cost and food & beverage cost percentage
- Use revenue, covers and average cheque historicals to forecast sales
- Discuss the importance of internal cost controls in the successful operation of a food and beverage business
- Create and use a budget for identifying control issues
- Use breakeven analysis for planning and decision making
- Identify control procedures, forms and systems used in the purchasing, receiving, storage, issuing, inventory management, production and service of both food and beverage
- Create and use labour productivity standards in managing labour cost
- Create and use a staffing guide and align to budget
- Discuss the control of other direct operating costs
- Analyze a menu’s pricing structure with respect to profitability and popularity using menu engineering
- Set menu prices both scientifically and with qualitative considerations
- Discuss the concept of sales mix and the role it plays in food and beverage cost
- Discuss the applications for computers and Point of Sales systems in food and beverage control
- Discuss the importance of sales (revenue control) and systems which can be put in place to minimize losses
- Discuss the increasing role of technology on control systems
- Analyze income statements in relation to cost control
- Identify employee, and customer theft risks and current preventative measures commonly used in the industry
- Make decisions which maximize profitability through control of costs.
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Lea R.Dopson, David K. Hayes, Food and Beverage Cost Control, latest ed. Toronto, Wiley of Canada
or similar textbook(s) or material as approved by the department.
Only calculators approved by faculty of Commerce and Business Administration may be used on tests and exams.