It has been exactly one month since Everett became the new Food and Beverage Director for the Hotel Trixie. The General Manager has just called a meeting to discuss food cost. Everett had been given the target of reducing the food cost percentage for the hotel to a maximum of 28 percent. Unfortunately, the end of the month accounting statement shows the hotel is operating five points over that goal at 33 percent. According to Everett’s numbers, the department was operating one half percent under target. He is going to have to find this discrepancy soon or he will be looking for another job.
Here is some additional information:
The Hotel Trixie is a boutique operation with 100 rooms that pays attention to detail including these food service opportunities:
- Continental Breakfast is free as is cocktail hour with Hors d’oeuvres
- Full service restaurant
- Room service
The hotel uses opening inventory, purchases, and closing inventories to determine food cost percentages. The Hotel management has determined the actual food cost is 33% while Everett believes his numbers show a 27.5% total food cost percentage. Up to this point, Everett and his team have determined:
- Purchasing is from approved vendors only.
- A dedicated receiver checks all deliveries.
- Products are stored in easily accessible open areas.
- Unit prices are correct as is recipe costing.
- Menu engineering contains set sales prices to reflect a 28% food cost percentage.
- Purchasing and receiving procedures ensure order goods are being received.
Instructions
Write a brief (1 to 2 pages) essay to answer the following questions:
- What is one possible reason for the discrepancy between the Hotel’s and Everett’s food cost percentages? Include the specific names included in the reading such as Steward Sales, Order Record, Receiving, Procedures, etc. Also support your decision by listing as much information as it relates to the concept and scenario.
- What are the food cost analysis issues?
- How will this decision impact procedures and inventory control?
- Address one or more challenge(s) that you foresee for a procurement manager. Explain why you qualified these things as ‘challenges’.
An appropriate length for this assignment is one to two pages.
Write your answers in paragraph format using complete sentencing. Your essay should be free of grammar and spelling errors.
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