1. Food & Beverage Management -I Cost Control HT 225 C ONTROLLING F OOD S TORING AND I SSUING Slide 1 of 17 King Abdul Aziz University Tourism Institute Diploma in Hospitality Management HT 225: Food &Beverage Management 1 – Cost Control Dr Mohamed El-Sayed Abdel-Aziz February 2014

2. C ONTROLLING F OOD S TORING AND I SSUING o S TORING PROCEDURES CONTROL o I SSUING PROCEDURES CONTROL  (F. & B. REQUISITION )  Record Keeping for Issued Foods  Food & Beverage Transfer o I NVENTORIES  Inventory Control Formulas Slide 2 of 17 King Abdul Aziz University Tourism Institute Diploma in Hospitality Management HT 225: Food &Beverage Management 1 – Cost Control

3. Slide 3 of 17 King Abdul Aziz University Tourism Institute Diploma in Hospitality Management HT 225: Food &Beverage Management 1 – Cost Control o The standard established for storing:  Condition of Facilities and Equipment  Arrangement of Food  Security of Storage areas  Location of Storage Facilities  Dating and pricing of stored food

4. Slide 4 of 17 King Abdul Aziz University Tourism Institute Diploma in Hospitality Management HT 225: Food &Beverage Management 1 – Cost Control o The proper internal conditions include  Temperature (Key factors in storing  Storage Container  Shelving  Cleanliness (Absolute cleanliness)

5. Slide 5 of 17 King Abdul Aziz University Tourism Institute Diploma in Hospitality Management HT 225: Food &Beverage Management 1 – Cost Control Maintaining appropriate internal arrangement of food include:  the Most-Used item readily available. o (Kept most used item closest to the entrance)  Fixing definite location  Rotation of Stock (FIFO storage practice Vs FIFO inventory control)

6. Slide 6 of 17 King Abdul Aziz University Tourism Institute Diploma in Hospitality Management HT 225: Food &Beverage Management 1 – Cost Control  Speeding the storing and issuing of food  Maximizing security  Reducing labor requirement

7. Slide 7 of 17 King Abdul Aziz University Tourism Institute Diploma in Hospitality Management HT 225: Food &Beverage Management 1 – Cost Control  Never store in a manner that permit pilferage  Employees should not be permitted to remove item at will  The storeroom is closed and locked at all time

8. Slide 8 of 17 King Abdul Aziz University Tourism Institute Diploma in Hospitality Management HT 225: Food &Beverage Management 1 – Cost Control Price should be printed on the item as they are received. Dating should be done as they are received to ensure the item validity and the maximum duration for storage.

9. Slide 9 of 17 King Abdul Aziz University Tourism Institute Diploma in Hospitality Management HT 225: Food &Beverage Management 1 – Cost Control  The movement of food from the storage facilities to the preparation area  Practices for doing this varies from one establishment to other establishment due to the management policies and procedures and priority.

10.  DIRECT - STORES o Direct are charged to food cost directly o perishable item purchased for immediate use. o Figures in “FOOD DIRECT” column in Receiving Clerk’s Daily Report o will be calculated directly into the particular day food cost. Slide 10 of 17 King Abdul Aziz University Tourism Institute Diploma in Hospitality Management HT 225: Food &Beverage Management 1 – Cost Control

11. Stores  categorized under non-perishable such as STAPLE or TAGGED ITEM.  The Requisition  Staple item cost may came from unit cost marked or a book or card  Meat item is usually from the Tag Slide 11 of 17 King Abdul Aziz University Tourism Institute Diploma in Hospitality Management HT 225: Food &Beverage Management 1 – Cost Control

12. Slide 12 of 17 King Abdul Aziz University Tourism Institute Diploma in Hospitality Management HT 225: Food &Beverage Management 1 – Cost Control Requisition FormDate: 9 th Mar 2XXX Department: Main Kitchen Total Cost (Extension) Unit CostDescriptionQuantity $16.74$2.79#10 Cans Green Peas 6 19.500.39Lbs. Sugar 50 103.602.59Lbs. Ground Beef 40 258.123.39Loin Beef (108 lbs. per tag) 6 $397.96TOTAL Charge to: FOOD -------------- Department ------------------ Requested by:---------------------------

13.  The transfer of item intended for a section to another section that requires it. o Intra-unit Transfer  Between Bar and Kitchen  Between Kitchen and Kitchen o Inter-unit Transfer  Between chain organization. (One establishment to another) Slide 13 of 17 King Abdul Aziz University Tourism Institute Diploma in Hospitality Management HT 225: Food &Beverage Management 1 – Cost Control

14. Slide 14 of 17 King Abdul Aziz University Tourism Institute Diploma in Hospitality Management HT 225: Food &Beverage Management 1 – Cost Control  A physical inventory  A perpetual inventory  The ABC system

15. o Category A 70% to 80% of the total inventory value. o Category B 10% to 15% of the inventory value. o Category C only 5% to 10% of the inventory value. Slide 15 of 17 King Abdul Aziz University Tourism Institute Diploma in Hospitality Management HT 225: Food &Beverage Management 1 – Cost Control Meats and Seafood Cost Total Food Sales = Meats and Seafood Cost %

16.  Cost as per Standardized Recipes Total Sales = Attainable Product Cost %  Actual Product Cost Attainable Product Cost = Operational Efficiency Ratio  Opening inventory + closing inventory | 2 =Average inventory  Cost of food (issued) | Average inventory = inventory turnover Slide 16 of 17 King Abdul Aziz University Tourism Institute Diploma in Hospitality Management HT 225: Food &Beverage Management 1 – Cost Control

17. Slide 17 of 17 King Abdul Aziz University Tourism Institute Diploma in Hospitality Management HT 225: Food &Beverage Management 1 – Cost Control Thank You