TIM 313 Midterm #2

What are the various types of production controls and why are they important?

* Control: process of ensuring that plans have been followed • Comparing what is set out to do with what was done and taking corrective action • Not effective until action was taken to correct unacceptable deviations from standards * Quality control: assuring day-in, day-out consistency in each product offered for consumption • Means producing the exact amount needed - no more, no less • Each type of control is directly related to control of costs and thus to profit or meeting budgetary constraints • Over- and underproduction create problems and impact cost • Time and temperature, product yield, portion control, and product evaluation all relate directly to quality, quantity, and indirectly to control of costs

What is on the energy conversation checklist?

* Food Preparation • Cook in largest volume possible • Cook at lowest temperature possible • Reduce excess heat loss by monitoring preheat times and cooking temperatures • Reduce peak loading of electrical equipment. Examples: Use high-energy-demand equipment sequentially rather than simultaneously. Schedule energy-intense cooking, such as baking and roasting, during nonpeak demand time. • Heat only the portion of griddle or equipment to be used. • Use hot tap water for cooking, whenever possible, except in areas where water contains concentrates of heavy metals. • Turn off equipment when not in use. • Keep grills, ovens, and other cooking equipment clean to promote better and more efficient heat transfer. • Write menus to include food items that do not require cooking when possible, especially during warm weather. • Schedule equipment use for nonpeak hours if possible. • Replace inefficient cooking equipment • Install timers on fans and exhaust systems • Perform maintenance on all cooking equipment on a regular basis • Use convection ovens instead of conventional ovens when possible • Use a timer when baking to prevent unnecessary opening of oven doors • Load ovens to capacity when possible but do not allow pants to touch oven walls • Check oven doors for proper closure • Be sure indicator lights are working on all equipment • Filter fat in fryers before it congeals, so it does not have to be reheated • Be sure numbers on control knobs can be seen • Set equipment to proper cooking temperature. Increasing the temperature uses more energy and may affect food quality. * Refrigeration • Open doors as seldom as possible • Turn off lights in equipment when not in use • Allow hot foods to cool briefly in accordance with safe food-handling practices before refrigerating • Store frozen and refrigerated foods promptly • Store items off floor and away from walls and ceiling to allow for maximum air circulation • Clean condensers frequently • Keep thermometers properly calibrated • Check seals on refrigerators and freezer doors to ensure efficient cooling and freezing • Install open-door alarms on walk-in doors • Use vinyl air curtains or air blowers over doors of walk-ins • Disconnect or remove lights in display cases when not needed • Develop a regular maintenance schedule for all refrigeration equipment • Check door gaskets and closures for damage and replace as needed • Schedule equipment defrost cycles during off-peak demand periods • Locate refrigeration and freezing equipment away form heat-producing equipment (e.g. ovens and fryers) * Lighting • Turn off lights when not in use • Adjust lighting intensity in areas where close work is not done (e.g. storerooms, aisles) • Limit night lighting for cleaning purposes • Limit areas of building available for use during holidays and "down periods" • Install timing mechanisms dimmers, or automatic photocell devices • Color code light-control panels and switches according to a predetermined schedule of when lights should be turned on or off • Install energy-efficient lightbulbs * HVAC • Lower thermostat to 68 F in winter; raise to 78 F in summer • Adjust duct registers to give the most efficient airflow within a room and balanced airflow between kitchen and service areas, if located adjacent to each other • Stagger start-up time for individual HVAC units to reduce demand for kilowatt use on your system and to eliminate unnecessary cooling or heating during hours before operation opens • Open windows to cool when possible • Shield windows to decrease heat loss or gain • Clean grease filters or a regular basis • Operate hood exhaust units only when needed * Sanitation and Water • Turn off exhaust fan when not required • Fill dishwasher to capacity • Locate hot water booster within 5 feet of dishwasher to avoid heat loss in the pipes • Install a spring-operated valve on your kitchen and restroom faucets to save water • Repair leaking faucets, seam pipes and valves. Implement an effective maintenance and cleaning program for all equipment • Use hot water only when necessary • Insulate hot water-holding tanks and hot water pipes to reduce heat loss • Perform regular service and maintenance on water heaters • Delime dishmachine on a regular basis * Office and Administration • Turn off office equipment including copiers and computers when not needed. They generate heat in addition to using energy. • Screen savers do not save energy; they save only the screen. • Buy copy and fax machines with "power down" or "stand-by" features that operate when machines are idle • Limit the number of days for delivery of products to decrease the amount of fuel used by suppliers • Carefully plan department deliveries to conserve fuel and time • Encourage employees to carpool to and from work • Use solar-powered calculators instead of battery or electric • Use manual staplers and pencil sharpeners • Purchase recycled products • Be sure all doors to the facility close tightly to improve HVAC efficiency • Periodic use of checklist for the energy conservation program provides data for assessing the program's effectiveness • Refrigerator compressors and condensing coils generate a lot of heat • Air condition can be decreased by placing compressors and condensing coils in remote locations outside the building or in the basement • A heat pump water heater uses heat generated by cooking equipment but also returns cool air to the kitchen • High-efficiency gas burners produce more Btus from the same amount of gas; infrared heating in fryers has the same results • Induction heating promises more efficiency, but also lowers kitchen temperatures

What are some pricing psychology theories?

* Odd-cents pricing: creating an illusion of a bargain to stimulate the customer to buy • Price ends in an odd number • Price ends in a number other than zero • Price is just below a zero * Pricing by the ounce: when customers can weight their own portions, sense of control reduces complaints • Used in onsite foodservice ops, especially salad and sandwich bars • Requires estimation of the total amount of raw food needed to serve an anticipated amount of customers to determine the raw food cost per ounce • Requires a markup factor per ounce of raw food to cover labor, other expenses, and profit • Selling price computed by multiplying the cost per ounce by a markup factor • Satisfied many customers because they like paying only for what they eat * Two-tier foodservice: upscale amenities and menus are being prepared for patients who are willing to pay; popular in healthcare centers * A la carte menu: menu items are priced, offered, and selected separately by customers (popular in commercial and onsite) * Table d'hote: groups several food items together and offer them at a fixed price. Complete meal with several courses (i.e. soup, salad, or dessert)

What criteria is considered in selecting a forecasting model?

1. Cost • Involves expenses of both development and operation • Developmental costs: constructing the model, validating the forecast stability, purchasing computer program • Operational costs: making a forecast after the model is developed, affected by the amount of data and computation time needed. More elaborate models require more. 2. Required accuracy of model • Quality is judged by the accuracy of its prediction of future occurrences 3. Relevancy of past data • Assumption is that past behavioral patterns and relationships will continue • If a clear relationship between the past and the present does not exist, the past data will not be relevant in developing forecasts 4. Forecasting lead time • Length of time into the future that the forecasts are made • Categorized as short-m, medium-, or long-term • Depends on the item being forecast: short for perishable produce, and a medium- or long- is suitable for canned goods 5. Underlying pattern of behavior • Actual occurrences follow some known pattern • Affected May be affected by random influences, responsible for errors Not all forecasting models work equally well for all patterns of data; therefore the appropriate model must be selected

What are some energy saving tips?

1. Cut Idle Time: Monitor preheating times and turn off equipment when not in use 2. Cook Wisely: Use the most energy-efficient piece of equipment for preparation; i.e., ovens are more efficient than rotisseries, griddles are more efficient than broilers 3. Maintain and Repair: Keep equipment in good repair; replace gaskets, leaks, loose doors, etc. 4. Recalibrate to Stay Efficient: Check thermostats and recalibrate as needed; repair or replace broken control panels 5. Check Pilot Lights: Check pilot flames to ensure only using as much gas as needed 6. Buy Energy-Efficient Equipment: Look for the Energy Star logo when purchasing new equipment 7. Buy with Capacity in Mind: Estimate production needs when purchasing equipment to ensure purchase of the proper capacity; purchasing too much capacity result sin wasted energy use 8. Put a Lid on It: Cover kettles on range tops, steam-jacketed kettles, and tilt skillets when cooking to reduce cooking time and energy use

Define activity ratios. What are the most popular ones?

• Activity ratios: examine how effectively an organization is using its assets • Expressed as percentages or turnovers • Inventory turnover ratio: one of most widely used activity ratios, shows number of times the inventory is used up and replenished during a period • Inventory turnover = Cost of goods sold Average inventory value • High ratio: limited inventory is being maintained • More liquid cash (cash isn't tied up in storage), less spoilage, fresher foods • More chance to run out of something • Low ratio: larger amounts of money are tied up in inventories • Percentage of occupancy: relationship between number of beds or rooms available and number being used by clientele

Describe the actual cost method

• Actual cost: establish the food cost from standardized recipes and labor costs (principal variable costs) • Other variable costs, fixed costs, and profit can be obtained as a percentage of sales from the profit-and-loss statement • Actual food cost + actual labor cost + other variable cost + fixed cost + profit • Advantage: including all costs and desired profit in selling price • Disadvantage: time needed to collect data

What historical records are used in forecasting?

• Adequate historical records constitute the basis for most forecasting processes • I.E. past customer counts, number of menu items prepared, sales record • Must be accurate or complete • Effective production records include: • Date and day of the week • Meal or hour of service • Notation of special event, holiday, and weather conditions • Food items prepared • Quantity of each item prepared • Quantity of each item served • Caterers must keep accurate records of the amount of food for each event ot prevent underproduction or overproduction of menu items on the next similar occasion • Reliable past records are essential because events are not repetitive; elaborate forecasting methods generally are not feasible • Production unit records reveal vital information on menu items • By cross-referencing records of sales with those production, a reliable historical basis for forecasting can be formalized • Records of sales yield customer count patterns • Data can be related to the number of times customers select a given menu item or the daily variations induced by weather/events • Historical records provide the fundamental base for forecasting quantities when the same meal or menu item is repeated • Should be correlated with those kept by purchasing, which include name/performance of supplier and price of food items

Define operating ratios. What are the most popular ones?

• Analysis of the success of the operation in generating revenues and in controlling expenses • Analysis of the revenue mix: divide sales from each area by the total sales • Average customer check: divide total sales by number of customer checks • Other sales ratios: sales per seat, per meal, per waitperson, and per menu item • Control of costs primary responsibility; organizations' profitability is strongly related to their effectiveness in such control • Food cost percentage = Cost of food Sales • Food cost should be about 1/3 of sales (closer to 27-30%) • Labor cost percentage = Cost of labor Sales • Percentage breakdown of the food dollar spent on various food categories: divide cost of food for each category by the total spent on food • Food cost per customer: dividing total food cost by number of customers served • Labor cost • Meals per labor hour = Total number of meals served ÷ Total labor hours to produce meals • Meals per full-time equivalents = Total number of meals served ÷ Total full-time equivalents to produce meals • Labor minutes per meal = Total labor minutes to produce meals ÷ Total number of meals served

What are the key aspects of accounting? What are the various types?

• Auditing: independent review of accounting records • Examination of records that support financial records and formulation of an opinion regarding the fairness and reliability of reports • Cost accounting: determination and control of cost • Assembling and interpreting costs data for use by management in controlling current operations and planning for the future. • Cost of production processes and products has been the emphasis, but not distribution costs and service costs are of concern • Financial accounting: reporting of transactions for an organization and the periodic preparation of various reports from these records (e.g. income statements and balance sheets) • Managerial accounting: historical and estimated financial data to assist management in daily operations and in future operations • Identifying the cost of alternative courses of actions is an important function • Another is budgeting and reports comparing performance to budget

Describe the balance sheet and its components.

• Balance sheet (statement of financial condition): list of assets, liabilities, and owner's equity of a business entity at a specific date, usually at the close of the last day of a month, quarter, or year • Based on fundamental equation: assets equal liabilities plus owner's equity 1. Assets • Assets: resources of a company • Current or fixed (or other) • Current assets: cash (e.g. on hand, checking accounts, savings), all assets that will be converted into cash in one year (e.g. accounts receivable, inventory, prepaid expenses, and entrance fees receivable) • Fixed/long-term assets: permanent nature, acquire to generate revenues for the business • Not intended for sale (e.g. land, buildings, furniture, fixtures, equipment, small equipment: china, glassware, silver) • Lose value over their expected life, so value is reduced by accumulated depreciation 2. Liabilities • Liabilities: debts of a company • Current and long term • Current liabilities: must be paid within one year (e.g. accounts payable, accrued expenses, and annual mortgage payment) • Accrued expenses: due but not paid at the end of the accounting period (e.g. salaries, wages, or interest) • Fixed/long-term liabilities: obligations that won't be paid within the current year • E.g. Mortgage for building and land; annual mortgage payments due during the current year are current liabilities and reduce long-term mortgage liability 3. Owner's Equity • Owner's equity (aka capital section): money value of a company in excess of its debt that is held by the owners • Portion of business that is the ownership interest, along with earnings retained in the business from operations • Types of ownership • Proprietorship: business owned by a single individual • Partnership: business owned by two or more people • Corporation: business incorporated under the laws of the state with ownership held by stockholders • In not-for-profit corporation, members may be the owners • Includes members' capital stock, additional paid-in capital, and retained earnings

Describe break-even analysis

• Break-even analysis: no profit but no loss; total revenues equal total expenses • Classify costs into fixed and variable costs • Fixed costs: costs required for an operation to exist, even if it produces nothing • Do not vary with changes in the volume of sales, but stay fixed, or constant, within a range of sales volume • Size of the existing physical plant and the equipment capacity define this volume; if either is expanded, fixed costs will increase • Examples: insurance, rent, property taxes • Variable costs: costs that change in direct proportion to the volume of sales (e.g. direct materials or food cost) • Semivariable costs: portion of the total cost will remain fixed regardless of changes in sales volume, and a portion will vary directly with changes in sales volume • Examples: labor, maintenance, utilities • Divide semivariable costs into fixed and variable components • Break-even point = Fixed costs ÷ 1 - (Variable costs ÷ Sales) • Contribution margin: ratio of variable cost to sales subtracted from 1; denominator; proportion of sales that can contribute to fixed costs and profit after variable costs have been covered • Functions • Projecting income, expense, and profit • Understand interrelationships among volume, cost, and profits, but requires that operational costs be known • Cost-volume-profit (CVP) analysis: determine volume required for a given level of profit; expansion of beak-even analysis • Sales or revenue level = Fixed costs + Profit desired ÷ (1 - Variable costs ÷ Sales)

Describe common-size statements

• Comparison may differ because of varying levels of volume • If data are expressed as percentages, meaningful comparisons can be made • Common-size statements: financial statements in which data are expressed as percentages • Useful in comparing results of income statement from one accounting period to another or among units of a multiunit operation (chain restaurant, food centers in campus dining) • Each figure on statement is calculated as a percentage of total sales • Common-size balance sheet sets total assets equal to 100% and total liabilities and owner's equity are taken as 100% • Comparisons with industry performance are facilitated

What are some sustainable production practices? Why are they so important?

• Concern for the environment increased interest in sustainable practices in food production • Practices include use of more locally grown products, waste reduction, and resource conservation • Fine dining restaurants serve more locally sourced food products than in hospital and college/university • Foodservice operations generate 8 to 16 oz of waste per meal served • Volume can be a gallon and a half or more • ¾ of this waste was packaging waste • Waste reduction efforts: production monitoring, recycling, composting, pulping, and food donation • Overproduction generates excess food that cannot be reused and is disposed of as trash • Keeping production records to clearly document amount prepared, amount served, and amount disposed and adjusting future production based on these records • Incorporates equipment and processes for weighting food waste at the end of each meal and includes employee recognition program • Recycling: cardboard, paper, tin cans, plastics, aluminum, glass, cooking oil • Multiple collection bins in production area for separate collection • Training of employees is critical • 100 billion pounds of food waste is produced each year • 11.7% of total municipal solid waste • Composting: decomposing organic material (food, biodegradable products) into soil-like material called compost • Reduces the amount of waste in landfills and provides a natural soil additive for growers • Some have composting units on site • Others work with local composting companies • Cost of trash removal may be based on weight or volume • Pulping: reduces volume of trash by mixing water with waste and extracts water once chopping process is complete • Pulper: equipment that chops waste (paper, disposable containers, food waste) • Donation of leftover foods that are safe to eat but will not be reserved can be brought to local shelters or food banks or through food rescue programs • Bill Emerson Good Samaritan Food Donation Act of 1996 protects donors should product donated in good faith cause harm to a consumer

What are the challenges of labor costs and what are some of the solutions?

• Controlling and reducing labor costs and simultaneously increasing labor productivity have growing challenges • Solutions: • Increasing use of convenience foods • Improving efficiency layout and equipment, and increasing employee benefits • Programmable equipment (French fry equipment and self-service ordering) • Needed for streamlining a labor force: personnel policies, job analysis, work simplification, work production standards, workload forecasting, scheduling, and control reports • Labor cost is the most important cost in hospitality • Minority managers • 57% are women • 16% are Hispanic • 14% are African American • Minority owners • ¼ are owned by women • 16% by Hispanics • 14% by American American • Has been biggest employer of teenagers, but supply is diminishing • Hours may be long • Elderly and persons with disabilities might take up employment slack • Scheduling and staffing become top priorities • Lowering labor costs by improving productivity and providing satisfactory wages that attract and retain competent employees • Justify efforts to control labor cost • Direct labor costs are increasing due to elevation of minimum wage scales and competition for qualified people • Increases in labor costs often are not balanced by increases in productivity • Fringe benefit packages are often very creative and expensive • People with different attitudes, beliefs, problems, goals, and personalities, as are commonly found among hospitality staff, are difficult to manage • Managers often recognize the need to help employees fine meaning in their jobs and get more than wages from their work • Foodservice is labor-intensive, so controlling labor cost is a key aspect • Effective use of labor is especially difficult because: • Many 7-day-a-week operations, some of which may require staff coverage 24 hours a day • Peaks in service demand requiring additional staff at those times • Seasonal variations in patronage of establishments • The highly perishable nature of food items both before and after production • The labor-intensive aspect of most production and service activities • The large number of unskilled ands semiskilled personnel in the industry

What do effective cost control programs do?

• Controlling labor and food costs is a manager's primary responsibility • Effective cost control programs: • Provide information for daily decision making • Monitor individual and departmental efficiency • Inform management of income, expenses, and variations from budget • Prevent fraud and theft • Are the basis of knowing where the company is going, not where it has been • Emphasize prevention, not correction • Maximize profit, not minimize loss

Describe the various types of multifunction equipment

• Cutting down on the square footage is a goal in both commercial and on-site • Range (aka stove) first piece of multifunction foodservice equipment • Space is expensive and should be used for revenue rather than production • Amount of labor hours can be decreased if employees walk less * Combi-oven: directs the flow of both convected air and steam through the oven cavity to produce a super-heated, moist internal atmosphere • Meat, seafood, poultry, vegetables, delicate meringues, pastries, and breads can be prepared • Four cooking methods combined: convection, steam, convection plus continuous stem, and convection plus cycled steam • Advantage is its versatility, which permits menu expansion, conservation of valuable floor space, and faster cooking with minimal shrinkage and maximum retention of flavor, color, and nutrients. • When steam is added, meat stays more moist * Tilting skillet or tilting frypan: floor-mounted rectangular pan with a gas or electric-heated flat bottom, pouring lip and hinged cover • Most versatile of all • Combines range, griddle, kettle, oven, stock pot, bain marie, and frying pan • Cook batches of food (pasta, stew, gravies, sauces) and multi-ingredient entrees, and individual orders of bacon and eggs, hamburgers, or steaks * Convection/microwave oven: convection oven that browns, bakes, and roasts and a microwave that steams and cooks food • Can use either functions alone or a combination • Hot-air jets from a convection oven provide surface color and texture and microwave energy provides major thawing and heating • Turkey or roast can be cooked shorter and product will be juicier on the inside and brown on the outside

What are the product evaluation procedures?

• Determine acceptability of recipe by managers, staff, and customers • Informal evaluation: done when product is first prepared; determines whether to proceed with further standardization of the product. Focuses on issues: • Is the visual appearance of the product acceptable? • Is the flavor of the product one that customers might enjoy • Are the ingredients in the recipe easy to obtain? • Is cost per serving within department guidelines? • Is the labor time needed to make the product within department guidelines? • Is the equipment needed to prepare the product available? • Do employees possess the skills needed to prepare the product? • Formal evaluation: done when a recipe has potential for use in the operation. Includes following procedures: • Selecting a group of staff members and customers as a taste panel • Choosing or developing an evaluation instrument • Preparing a sample recipe • Setting up sampling area with drinking water, eating and drinking utensils, napkins, and evaluation forms and pencils • Having participants sample and evaluate products • Summarizing results • Determining future plans for recipe based on evaluation results

Describe the dry heat cooking method?

• Dry heat: heat is conducted by dry air, hot metal, radiation, or a minimum amount of hot fat • Major methods: roasting, baking, oven frying, broiling, grilling, barbecuing, rotisserie cooking, and frying (i.e. sautéing, pan frying, deep fat frying) • Although oil is wet, in this text, it is included under dry heat * Broilers - Broiler: heat source above the rack that holds the food, usually meat, poultry, and seafood • Food is placed 3-6 inches from the heat, depending on the type and intensity of the heat • Temperature required depends on the amount of fat, tenderness, or thickness of the food item • Juices and fat from cooking food drop to a drip pan below the food - Charbroiler: Heat source is from below, so it is technically grilling and not broiling • Heated with gas, electricity, charcoal, or wood • Gas and electric models have a bed of ceramic briquettes above the heat source and below the grid that holds the food • Juices and fat drop onto heat source, so flames and smoke occur - Salamander and cheesemelter: specialty broilers that are much smaller and mounted above a range • Cheesemelter: much lower heat output and used for finishing (melting cheese) rather than cooking • Grilling, griddling, and pan broiling use heat from below - Grilling: placing food items on an open grid over a heat source - Griddling: cooking of food on a flat surface (griddle) that is heated from below by gas or electricity - Clamshell: rapid cooking action from the hood's infrared broiler and grilling heat from below drive natural juices in the food to the center and decrease food shrinkage, resulting in juicy meat in half the time • Barbecue-style meats can be cooked in conventional equipment or specialized barbecue equipment as follows: • Basic open pit (steel or concrete wood-burning firebox under a grate, some with rotisserie spits) • Cylindrical or kettle-shaped smokers with domed lids, some with pans • Large-capacity, closed-pit, wood-burning rack or reel ovens with fireboxes to the rear • Gas or electric upright rack ovens that cook at temperatures from 175 to 250 F (smoke is dispersed by wood-charring or a smoke-concentrate device) • Pressurized barbecue smokers that combine heat (350-425 F) with pressure (12-15 psi) and smoke from wood chips * Deep Fat Fryers - Deep fat fryer: frying kettle or frying bin of oil heated by gas, electric, or infrared burners into which foods are immersed in a fryer basket to be cooked • Important developments: precise thermostatic control, fast recovery of fat temperature (to produce consistent-quality fried food rapidly), and automatic filtering of the oil to remove food particles and extend the useful life of the cooking oil • Frying kettle divided into two zones: • Cooking zone: above the heating elements • Cold zone: space below the cooking element where crumbs and debris falls; particles are less likely to burn here • Heat recovery time: time it takes for the oil to return to the optimal cooking temperature after food has been added, impacts the total cooking time in a fryer * Ovens • Roasting or baking uses a combination of all three modes of heat transfer: conduction, convection, and radiation • Heat is conducted through the pan to the food, and natural or forced convection circulates the air • Heat radiates from the hot walls of the cooking chamber • Three main categories: hot-air ovens, infrared broilers, and microwave ovens • Questions to ask before buying an oven: • What are we coking? • Where are we cooking it? • More prepared foods and frozen ingredients that require a different type of preparation • Many types of ovens - Range oven: part of a stove and is located under the cooking surface; used in small operations - Deck oven: standby of hot-air ovens. • Pans of food usually are placed directly on a ceramic or stainless steel deck (bottom of the oven) of an oven that is either 8 or 12 inches high • Several deck oven units are stacked on top of each other • Separate temperature controls for heating units in the top and bottom of the oven, allowing for more controlled baking. - Convection oven: has a fan on the back or side wall that creates currents of air within the cooking chamber • More space, reduces cooking time by 30% and cooks at 25-35 F lower temperatures, thus conserving energy - Conveyor oven: food travels on moving conveyor belt through the oven, cooking as it moves through the oven • Often called a pizza oven in quick-service operations - Impinger: conveyorized oven that blasts high-velocity, heated air into the oven cavity, allowing food to cook much more quickly; heat sources include infrared, quartz, gas, and electric. - Microwave oven: used more for heating prepared foods for service than for cooking foods • Microwaves are generated by an electromagnetic tube that produces microwaves that penetrate partway into the food and agitate water and/or fat molecules in the food; agitation of molecules actually cooks the food - Smoker oven: electric, compact-size oven with racks to smoke up to 100 pounds of meat at a time; uses wood chips to produce smoke, and meat is rubbed with spices and bbq sauce for flavor - Low-temp cooking and holding oven: cooking temperatures from 142 and 325 F and holding temperatures from 60 to 200 F. Yield of meats can be increased up to 25% and energy consumption educed by 30-50% when cooked in these ovens - Rotisserie oven: contains rows of metal spits or baskets on which food is placed. Spits or baskets are rotated and the food slow cooked in the oven's warm, usually moist, cavity. Cooking source can be gas, electricity, wood, or charcoal. - Wood-fired oven: burns wood in a well-insulated cavity to heat stone or brick blocks on which the food items are cooked. Wood is chosen based on the smoky flavor it will impart to the food items cooked in the oven, ow easy it is to light, and its moisture content. - FlashBake oven: combination of intense light and infrared energy to cook food quickly. Products (pizza, chicken breasts, fries) can be cooked in less time

What is the purpose of energy star?

• ENERGY STAR: voluntary partnership among U.S. organizations, the EPA and the U.S. Dept of Energy to promote energy efficiency in buildings and homes • Follow a proven, cost-effective strategy to save money by reducing the total energy consumption of their buildings • EPA provides unbiased technical information, customized support services, public relations assistance, and access to resources and tools • Predicts savings in energy bills of $15 billion annually by 2012

Describe the factor pricing method

• Factor pricing method (markup method): Raw food cost x pricing factor = menu sales price • Pricing factor: desired percentage of food cost must be selected and divided into 100 to give a pricing factor • Markup: difference between cost and selling price • Advantage: simple math • Disadvantages • Costs other than food are not known until the end of the month • This method disregards perception of value • Customers will not be willing to pay a uniform markup on all menu items

What are the objectives of food production?

• Food is cooked for three primary reasons: 1. Destruction of harmful microorganisms, thus making food safer for human consumption • Cooking at proper temperatures can destroy pathogens • Amount of heat required to kill a particular microorganism depends on time, method, type of food, and type and concentration of the organism • Adequate cooking is a major factor, but proper handling before and after is also critical 2. Increased digestibility 3. Change and enhancement of flavor, form, color, texture and aroma • Nutrient value of some foods can be decreased if they are improperly cooked • Vegetables if handled improperly can cause vitamin or mineral loss • Amount of cut surface and length of time between prepreparation and production affect nutrient retention • Nutrients may be leached out in amount of water, length of cooking time, and cooking temperature • Proper attention to time and temperature control is important in quality of food, especially nutrient • Aesthetic quality of food can be enhanced by cooking • Food can be ruined or made less palatable by improper procedures • Quality of any cooked food depends on four variables: 1. Type and quality of raw ingredients 2. Recipe or formulation for the product 3. Expertise of production employees and techniques used in preparation 4. Method and duration of holding food items in all stages from procurement through service • Cooking may enhance, conserve, develop, or blend flavors • Preservation of color is another aesthetic objective in cooking foods • Contrasts between the qualities of meat prepared properly and improperly is an example of the effect of cooking on aesthetic quality of food • Baked products also are affected greatly by improper preparation and cooking techniques (tenderness is affected by overmixing; over/underbaking is obvious) • Importance of adequate controls throughout the prepreparation, production, and service processes • Holding stage (especially in cook-chill or cook-freeze foodservices) affects aesthetic quality and acceptability of food

Define forecasting

• Forecasting: art and science of estimating events in the future and provides the database for decision making and planning • Art: intuition • Science: use of past data in a tested model • Forecasting is a function of production and constitutes basis for procurement

What are the ways heat is transferred?

• Heat causes many reactions to occur, and the type and amount of heat greatly affect the resulting product • Heat is transferred in four ways 1. Conduction • Conduction: transfer of heat through direct contact of one object or substance with another • Transfer can occur in any of the three states of matter: solid, liquid, or vapor • Metals, as solids, are good conductors, however different metals conduct heat at different rates • Heat is transferred from a heat source, usually gas/electricity, through a cooking vessel to food • Dominant means of heat transfer in grilling, boiling, frying, and, to some degree, baking and roasting • In pan frying, fat is the transfer agent between the pan and the food 2. Convection • Convection: distribution of heat by the movement of liquid or vapor and may be either natural or forced • Natural convection occurs from density or temperature differences within a liquid or vapor • Temperature differences cause hot air to rise and cool air to fall • Forced convection is caused by a mechanical device • Fans circulate heat, which is transferred more quickly to the food for faster cooking • Can also circulate the food, rather than the heat • Stirring is another form of forced convection in which heat is redistributed to prevent concentration of heat at the bottom of the container 3. Radiation • Radiation: generation of heat energy by wave action within an object • Waves do not possess energy, but induce heat by molecular action upon entering food • Infrared waves have a longer wavelength than visible light does • Broiling most familiar example: electric or ceramic element heated by a gas flame becomes so hot that it emits infrared radiation, which cooks food • High-intensity infrared ovens heat food even more rapidly • Infrared lamps are used for holding food at an acceptable temperature 4. Microwaves • Microwaves: very short length and are generated by an electromagnetic tube • Penetrate partway into food and agitate water and/or fat molecules • Friction from this agitation creates heat, which cooks • Only affects water and fat molecules, dry material won't become hot in microwave oven • Disposable plastic or paper plates can be used • Penetrate only about 2 inches into food and heat is transferred to the center • Not predominant in foodservice because cooking time increases proportionately with the quantity of the food to be cooked • Cooking units are now available with microwave and convection functions • Provide thawing and heating energy, and circulating air provides surface color and texture 5. Induction • Induction: use of electrical magnetic fields to excite the molecules of metal cooking surfaces • Induction-heat burners that cook magnetically • Burner has no open flame and burner surface does not get hot, rather molecules are activated, which produce the heat to cook food • Induction heating is fast, even, and clean • Does not require ventilation

What is recipe standardization? What are the advantages and limitations?

• Ideal: have recipes that consistently deliver same quantity and quality product when followed precisely • Variations in ingredient characteristics, customer demands, personnel, and equipment may require alterations to the recipe or even preclude its successful use • Production procedures are complicated and difficult to establish because many people are involved, with definite ideas about how a product should be prepared • Recipe standardization: process of tailoring a recipe to suit a particular purpose in a specific foodservice operation; important responsibility of production manager • Standardization: requires repeated testing to ensure that the product meets the standards of quality and quantity that have been established by management • Food cost and selling price cannot be correctly calculated unless recipes are standardized to use only specific ingredients in known amounts to yield a definite quantity • Must be retested when change is made in an ingredient • Standardizing recipes is a time-consuming task, so must be worthwhile • Most successful foodservice use only recipes that have been developed specifically for them (i.e. limited menu chains) • Advantages • Promote uniform quality of menu items; all products should be the same high quality • Promote uniform quantity of menu items. Recipes should produce a specific, designated quantity. • Encourage uniformity of menu items. Servings of the same menu item should have the same size and appearance • Increase productivity of cooks. Clarifying procedures on recipes improves the efficiency of cooks • Increase managerial productivity. Recipes eliminate guesswork in food ordering and questions asked by cooks, thus freeing managers to concentrate on satisfying the customer • Save money by controlling overproduction. Waste is controlled if only the estimated number of portions is produced • Save money by controlling inventory levels. More just-in-time purchasing is possible, thus increasing cash flow • Simplify menu item costing. Precise calculation of serving costs is vital in establishing selling prices. • Simplify training of cooks. Recipes with detailed procedures provide an individualized training program for new cooks and chefs. • Introduce a feeling of job satisfaction. Cooks know that menu items will always be the same quality. • Reduce anxiety of customers with special dietary needs. A nutrient analysis can be done on each recipe and ingredients can be identified for those with allergies or other health concerns. • Key to success is ensuring that recipes are followed carefully and consistently • Human element can be variable, so employee supervision and training are critical • Limitations • Standardized recipes will not improve a product made form inferior ingredients • Good specifications for quality products are essential • Cannot eliminate the variation found in food (i.e. climate, maturity, growing regions, and age) • Ingredient substitutions will affect final product; recipe has to be standardized for each foodservice operations • Review and update previously standardized recipes to reflect changes in organization • Produce consistent results and yield each time • Quantity recipe: any recipe that produces 25 servings or more; not standardized, until they have been adapted to an individual operation • Three phases: recipe verification, product evaluation, and quantity adjustment; repeated until a recipe is standardized

Describe the income statement and its components.

• Income statement (statement of income or the profit-and-loss statement): reports the revenues, expenses, and profit or loss as a result of operations for a period of time • Sales or revenues include the cash receipts or the funds allocated to the operation for the period • Cost of sales section reflects the cost of products sold that generated the revenue • Inventory at beginning of period + Purchases during the period Total value of available food - Inventory at end of period Cost of goods sold during period • Gross profit or income: subtract cost of goods sold from sales/revenue • Net profit or loss: subtract expenses from gross profit

Define liquidity ratios. What are the most popular ones?

• Liquidity ratios: organizations ability to meet current obligations/pay bills when due • Organization may make profit but have insufficient cash to pay current bills • Most common ratios are current ratio and acid-test ratio, use data from balance sheet • Current ratio: relationship between current assets to current liabilities • Current ratio = Current assets Current liabilities • Creditors consider high current ratio as assurance they will receive payment for products and services, but managers may wish to maintain a lower current ratio by avoiding excess buildup of cash or inventories • Acid-test ratio (quick ratio): comparison of current assets and current liabilities • More accurate measure of bill-paying capability • Measured against cash and other assets readily convertible to cash (e.g. accounts receivable and marketable securities) • Acid test ratio = Cash + Accounts receivable + Marketable securities Current liabilities

What are the different tools for comparison and analysis? What's the difference between internal and external standards of comparison?

• Manager analyzes financial data through: ratio analysis, trend analysis, common-size statements, and break-even analysis • Internal standards of comparisons: review of current performance in relation to budgeted performance, past performance, or preestablished department standards • Budget represents the plan, so comparisons with the budget indicate whether operations are proceeding as planned • Comparison of current performance in relationship to past performance provides information on changes occurring in the operation over time • Preestablished department standards provides objective benchmarks for comparison of actual performance with expected performance • External standards of comparison: review of performance in relation to similar operations or comparisons with industry performance

What is the production meeting?

• Managers should hold a meeting daily with employees in the production unit • Can be rather short, when menu is changed, more time is required to discuss new recipes and employee assignments • If operations serve breakfast, lunch, and dinner, these are generally scheduled after lunch, when activity in the production unit is minimal • Employees can be encouraged to discuss the effectiveness of the schedule • Issues and suggested corrective measures should be recorded for next time • Conclude with discussion of production schedule for following three meals • Review recipes, possible substitutions, and prepreparation for the following day • Free discussion of workloads can be a morale builder

Describe the moist heat cooking method?

• Moist heat: use of water or steam for the cooking process • Most common: boiling, simmering, stewing, poaching, blanching, braising, and steaming • Boil, simmer, stew, or poach: cook a food in water or a seasoned liquid; temperature of liquid determines method * Boil: cook in a liquid that is boiling rapidly; for certain vegetables and staches * Simmering/stewing: cooking in a liquid that is boiling gently, with a temperature of 185 to 205 degrees F. Most foods cooked in liquid are simmered. • Frequently in steam jacketed kettle: double boiler • One bowl is sealed in another with 2-inch space between them • Jacketed area provides space where steam is introduced, which provides necessary heat to cook product in the kettle • More pressure, the hotter the surface, the faster it cooks • Most are self-contained with boiler to make their own steam rather than being direct-steam models connected to a building steam supply • Connected to a chilled water supply to quickly cool ingredients • Pouring lip and mounted on trunnions that can be easily poured into serving pans * Poach: cook in a small amount of liquid that is hot but not bubbling (160-180 F) • Cook delicate food: fish, eggs, fruit • Bland, so chef must create maximum flavor * Blanching: cooking an item partially and briefly, usually in water • French fries blanched in hot fat • Two methods • Item is placed in cold water, brought to a boil, simmered briefly, then cooled by plunging in cold water: to dissolve blood, salt, or impurities from certain meats/bones, • Item is placed in rapidly boiling water, held there until water returns to a boil, and quickly cooled in cold water: set the color of and destroy enzymes in vegetables or to loosen skins of vegetables and fruits for easier peeling * Braising: cooking food in a small amount of liquid, usually after browning it • Chefs showcasing more flavorful, less tender, and less costly cuts of meat by preparing braised beef menu items • Browned in a small amount of fat, which gives desirable appearance and flavor to product and sauce • Healthful cooking • Seared in hot stock, assuming brown color without added fats and finished at lower temperature • Liquid thickened by reducing over hot heat rather than using thickening agent • No liquid added because item cooks in its own moisture • Done on range or in oven, or covered tilting skillet • Other terms: pot roasting, swissing, and fricasseing * Steam: too cook foods by exposing them directly to steam • Steam is the gaseous form of water and a very efficient heat transfer medium • Heat transfer rate is 300 Btu as compared to 7 Btu in a convection oven and 38 on a griddle • Pressure steamer: traps and removes air that causes steam pressure to build • Pressureless convection steamer: circulates steam in cooking chamber • Door may be opened to remove or add food • Heat transfer from steam to food is accomplished by forced convection caused by a fan inside that encircles the food, thus cooking it without pressure • Suited for a wide variety of foods • Steam is continuously vented, so unwanted flavor transfer is eliminated

What is the systems approach to managing financial resources?

• Money is an input into the foodservice system; transforms that input into financial accountability, an output to the system • Budget are plans and as such are controls, storing of financial data is memory, • Preparation of financial statements and interpretation of these statements are critical responsibilities

What are the various types of ratios?

• Most financial info is presented as totals or balances of accounts, which have no apparent significance • Ratio analysis: analysis of financial data in terms of relationships, facilitates, interpretation and understanding • Ratio: mathematical expression between two items, expressed: • As a common ratio: ratio between x and y may be stated as x to y (x:y) • As a percentage • As a turnover: number of times x must be "turned over" to yield the value of y, calculate by dividing y by x • On a per unit basis: e.g. sales dollars per seat • Categorized according to primary use:

How are production decisions made?

• Must estimate future events; forecasting, planning, and production scheduling • Planning decisions must be made within the constraints of the existing facility: if demand exceeds capacity, facility must be expanded, future production curtailed, or more ready prepared foods purchased • Production planning is the synthesis of quantity, quality, and cost objectives • Objective of production: transform, human, material, facility, and operational resources into outputs • Secondary objectives lead to customer service • Product/service characteristics • Characteristics of the product or menu items depend upon the type of operation • Process characteristics • Include method of food preparation, ranging from grilling to broiling to baking • Process and product characteristics are closely related because both determine the quality of the product and service • Product/service quality • Efficiency • Depends upon the control of costs for labor, material, and facility use • I.E. effective employee relations and cost control of labor, cost control of material, cost control in facility use • Customer service: producing quantities to meet expected demand, meeting the delivery date for products or services • Planning cannot be effective without reasonably accurate forecasting of future demand quantities • Standards of quality must be established • Maintenance of quality is a cost factory because of employee training, inventory control, and sanitation programs • Cost element in planning is the result of the correlation of food, storage, issue, and production costs with labor, facility, and energy costs • Whenever planning goes beyond a day-to-day basis, forecasting becomes necessary

Describe food production as a functional subsystem

• Objective: preparation of menu items in the needed quantity and with the desired quality, at a cost appropriate to the particular foodservice operation • Quantity: distinguishes production in foodservices from home or family food preparation • Quality: aesthetic aspects, but also nutritional factors and microbiological safety • Vital in mass food production due to number of employees involved • Cost: determines whether or not a product should be produced for a specific customer in that operation • After procurement, production is the next major subsystem in the transformation • Increased use of partially processed foods, often preparation will be done in the production unit • Production: managerial function of converting food purchased in various stages of preparation into menu items that are served to customers • Planning for production: program of action for transformation of resources into products and services • Manager identifies the necessary resources and determines how the transformation should be designed to produce the desired products and services • Overlapping managerial functions: planning must be integrated with organizing and controlling

How can a foodservice organization conserve water?

• Objective: use water as efficiently as possible while maintaining high sanitary standards: • Never leave a faucet running; have leaking faucets fixed • Thaw food sunder refrigeration rather than under running water • Wash produce in sinks of water rather than under running water • Adjust ice machines to dispense less ice, if ice is being wasted • Use low volume spray nozzles • Wash only full loads in dishmachine • Use water form steam tables to wash floors • Do not use "flood the floor" cleaning procedures • Install low-volume faucet aerators to sinks • Reuse rinse water from the dishwasher as flush water in garbage disposal units • Purchase water efficient equipment, such as air cooled ice machines and refrigerators

What is portion control and what important principles does it result from?

• Portion control: achievement of uniform serving size • Essential control in production of food in quantity • Control of cost and customer satisfaction • Customers concerned about value received for price paid; may be dissatisfied if portions are not the same for everybody * Achieving portion control results from following several important principles: 1. Foods should be purchased according to detailed and accurate specifications to assure that the food purchased will yield the expected number of servings; products are ordered by count or number with definite size indicated/individual serving sizes 2. Standardized recipes should be used: include information on total number and size of portions to be produced. Following procedures carefully ensures correct number of portions will result 3. Managers and employees should know the size and yield of all pans, dishers, and ladles. Pans and serving utensils should be selected in the standardized recipe. • Dishers, spoodles, and ladles accurately and consistently portion foods • Number is used to indicate the size of these utensils, which specifies the number of servings per quart when leveled off • Color coding system to help employees choose size • Utensils should be made of 18-8, Type 304 stainless steel to prevent corrosion, ensure long-lasting service, and be dishwasher safe • Handle should be one piece & extended to provide sure grip for comfortable use • Ergonomically approved thumb tab to reduce operator fatigue should be specified for natural hand movements • Spoodles need handles designed for hours of use and remain cool to the touch • Other serving/cooking equipment: spoons, tongs, hamburger and pancake turners, and spatula/scrapers • Scales are used because weight control is essential from time food enters until served • Portion scales: quantity control in production and service units to check serving sizes • Slicers: ensure portion control by evenly and uniformly slicing • Can adjust blade for the desired degree of product thickness • Portion control guides should include slicer setting • Automatic slicers are available • Slicer is mostly used for meat, but also used for vegetables, cheese & bread • Important to clean and sanitize a slicer thoroughly • Portion scale can still be used for portioning sliced foods • Lack of control can create food shortages and drive up food cost • If product is substituted, additional cost may be incurred • Develop portion control guides • Training and supervisions to ensure proper tools and techniques • Portion control is essential for operating in the black (when revenue minus expenses is a positive value) • All food items must be purchased on the basis of weight and measure, and everything served on the basis of specified weight or portion size • Ensure portion control by purchasing by exact specifications, using standardized recipes, and using proper tools and techniques

What should be considered in pricing menu items?

• Pricing menu items can be one of the most difficult decisions management makes • Should cover cost of food and labor and additional operating costs (e.g. rent, energy, promotional advertising) • Consider perception of value and competition • Perception of value: what customer believes menu is worth • Competition: large restaurant chains often sets local standards • Continual challenge: make the highest possible profit and retain repeat customers • Onsite managers want to serve best food possible within budget • Menu pricing is computerized, it calculates portion sizes, selling prices, item costs, and raw food and markup percentages • Most often used is based on establishing a percentage of selling price for food and labor • Three most often used pricing methods: factor, prime cost, and actual cost methods

What are the primary financial statements used by foodservice managers?

• Primary financial statements used by foodservice managers are the balance sheet and income statement • Analyzing effectiveness of operations • Balance sheet: statement of assets, liabilities or debts, and capital or owner's equity at a given time or at the end of the accounting period • Static statement because it presents the financial position at a specific date/time • Income statement: financial report that presents the net income or profit of an organization for the accounting period • Provides information about the revenues and expenses that resulted in the net income or loss • Flow/dynamic statement because operating results over time are presented • Standard methods of accounting and presentation of financial statements, termed uniform systems of accounts • Uniform systems of accounts within a particular industry provide for the uniform classification, organization, and presentation of revenues, expenses, assets, liabilities, and equity • Permits comparability

What is the difference between overproduction and underproduction?

• Primary result of forecasting is customer satisfaction: they receive what they order • Concerned with food cost: overproduction and underproduction affect the bottom line • Overproduction: production of more food than is needed for service generates extra costs because salvage of excess food is not always feasible • Leftover prepared food spoils easily and require extreme care in handling and storage, some may break down and lose quality. • Policies and procedures must be well defined and rigorously enforced • Reduce overproduction by using leftover high-priced food as an ingredient in a low-cost menu item reduces profits • Planning and carrying out salvage efforts incur higher labor costs that could have been avoided • Customers suspect that leftovers are being used which can be damaging to the image • Underproduction: production of less food than is needed for service can increase costs • Customers will be disappointed and have difficulty in making another selection • Involve both additional labor costs and often the substitution of a higher-priced item • Having a similar backup item available can increase customer satisfaction even though it hurts the bottom line

Describe the prime cost method

• Prime cost: raw food cost and direct labor cost of those employees involved in preparation of a food item but not service, sanitation, or administrative costs • Cost records on raw food purchased and time studies of amount of direct labor are required • To make this practical, assumptions are often made on percentage of prime cost attributable to raw food, direct labor, and operating margin • Example: manager may decide that 40% of selling price is for raw cost, and 8% for direct labor. This leaves an operating margin of 52%. The relationship of selling price with a margin of 52% is 100 divided by 52 or 1.923, as a multiplier for the prime cost to yield the selling price.

Describe the concept of quantity food production

• Production of quality food in quantity involves a highly complex set of variables • Quantity food production varies widely with type of operation • Menu is basic plan, planning in food production subsystem depends on menu item selections • Differences in processing foods in various foodservices • Quantity food production involves control of ingredients, production methods, quality of food, labor productivity, and energy consumption, all of which are critical to controlling costs • True test of production plan is whether the food is acceptable to the customer, produced in the appropriate quantity, microbiologically safe, and prepared within budgetary constraints • Quantity is the primary element that introduces complexity to food production • Large-scale equipment and mechanized processes are requisites to producing vast quantities of food to serve large numbers of customers • Expertise in food preparation techniques and equipment usage enable manager in planning and evaluation of service • Production equipment is highest cost item in budget • Steamers provide most heat • Broilers, fryers and ovens provide dry heat • Sweet spot in pricing: size or capacity of equipment from which the buyer gets the best value and lowest cost per menu item produced • Much of the cost is for the labor required to make the equipment • Downsizing standard models often yields far less savings than expected • Value should be considered in terms of performance or capacity per dollar invested; this can offer far more savings than just lowest price

What is the production schedule?

• Production schedule (a.k.a. production worksheet): major control in the production subsystem because it activates the menu and provides a test of forecasting accuracy • Menu should be based on standardized recipes • Schedule is highly individualized • Basic information: • Unit, production date, and meal • Actual customer count, weather, events • Employee assignments • Preparation time schedule • Menu item • Over- and underproduction • Quantity to prepare: forecast amount for each menu item • Substitutions • Actual yield: portion count produced by recipe, should be on recipe • Indicates overproduction for some items and underproduction for others • Additional assignments • Special instructions and comments • Prepreparation • Posted on bulletin board • Name of employee in the left-hand column with designated duties • Menu item column identifies recipe by name • Unit supervisor will distribute the recipes at the time schedule is posted • Comments column include information on equipment and service instruction, specific information not included in the recipe • Production scheduling affects cost of materials, labor, and energy • Production employees make the schedule work • Batch cooking: variant of production scheduling, but is not always done in foodservice operations • Total estimated quantity of menu items, often vegetables, is divided into smaller quantities, placed in pans ready for final cooking or heating, and then cooked as needed • Production can be scheduled to meet customer demand throughout meal service time with fresh product being served • High-speed equipment made batch cooking feasible for broad range of menu items • Grilled, deep fried, and broiled items must be cooked in small quantities to meet demands

What is production scheduling? How does it occur?

• Production scheduling: time sequencing of events required by production subsystem to produce a meal • Scheduling occurs in two distinct stages: planning and action • Planning: forecasts are converted into the quantity of each menu item to be prepared and the distribution of food products to supervisors in each work center • Action: each item is assigned to a specific employee and the time to start its preparation is recorded • Supervisors assume responsibility • Food is prepared for service without lengthy holding and deterioration in quality • Supervisor give feedback to manager by writing comments on schedule • In small operations, foodservice manager might need to assume responsibility • Every foodservice must have a daily production schedule to control labor and food costs

Define profitability ratios. What are the most popular ones?

• Profitability ratios: ability of an organization to generate profit in relation to sales or the investment in assets • Profitability: measure of the profit-making ability of an organization • Most foodservice operations must generate some level of net income • Profit margin: uses information from income statement to assess overall financial efficiency • Most commonly used measure of operating profitability • Often indicated as a percentage • Profit margin = Net profit Sales • Return on equity: adequacy of profits in providing a return on owners' investments (net profit/equity) • Return on assets: measure of management's ability to generate a return on the assets employed in generating revenue (net profit/total assets) • Both combine data from income statement and balance sheet to assess financial efficiency

What are the three types of models?

• Quantitative • Time series • Moving Average • Exponential Smoothing • Causal • Regression analysis • Subjective 1. Time Series Model • Assumption that actual occurrences follow an identifiable pattern over time • Deviations in data make forecasting difficult • Reduce deviations by smoothing the data curve • Most suitable for short-term forecasts • To make the past data useful, variations must be reduced to a trend line that can be extended into the future • Two time series models, moving average and exponential smoothing are used more frequently in forecasting than any other type • Moving average forecasting model: most common and easiest of time series models • Taking the average of the number of portions sold for the last five or more times the menu item was offered as the first point on the trend line • Second point on the line is determined by dropping the first number and adding the most recent number of portions sold to the bottom of the list and then calculating another average • Repeats' • Smoothed data curve eliminates daily variations in demand and thus indicates a trend of the past • Take into consideration special events, holidays, weather • Exponential smoothing forecast • Does not uniformly weight past observations • Gives recent values more weight than older ones • Only data required are the weights, the alpha judgment factors, that are applied to the most recent values including the last customer demand and the last forecast, thus eliminating the need to store historical data • Alpha (α) is the judgment factor, or smoothing coefficient, and indicates how well the manager believes the most recent data represent current customer count or number of sales • Judgment factor is a number between 0 and 1 and is used to adjust for any errors in previous forecasts • α is the weight assigned to the most recent customer demand and 1 - α is the weight for the most recent forecast • When α has a value close to 1, the new forecast will include a substantial adjustment for any error that occurred in the preceding forecast • When α is close to 0, the new forecast will not show much adjustment for the error from the one before • Most recent forecast values are multiplied by the 1 - α quantity, which places a greater weight on recent values • The 1 - α quantity acquires exponents in increasing order as the forecast is repeated, thus decreasing weights of older values and having a lesser influence on the trend curve than more recent data • New forecast = (judgment factor x last demand) x (1-judgment factor x last forecast) 2. Causal Model • Assumption that an identifiable relationship exists between the item being forecast and other factors (i.e. selling price, number of customers, market availability) • Vary in complexity, may include numerous variables • Cost of developing and using causal models is high • Not used frequently for short-term forecasting (perishable produce) • Popular for medium- and long-term forecasts (i.e. canned goods) • Regression analysis forecasting models: most commonly adopted causal models • Dependent variables (Y): items being forecast • Independent variables (X): factors determining value of the dependent variables • Require a history of data for the dependent and independent variables to permit plotting over time • Find an equation for a line that minimizes the deviations of the dependent variable from it • Two principle kinds of regression • Linear: equation for a straight line that fits the data points most closely; preliminary plotting to see if represented reasonably by a straight line. Assume linear relationship between the variables will continue for a reasonable time. • Multiple: determination of the effects of more than one independent variable on the dependent one; quite complex (use computer) 3. Subjective Model • Used when relevant data are scarce or patterns and relationships between data do not tend to persist over time • Little relationship exists between the past and the long-term future • Rely on opinions and other information (usually qualitative) • Delphi technique • Panel of experts who individually complete questionnaires on a chosen topic and return them to the investigator • Results are summarized and returned to panel for revision • Questionnaires are revised successively until reach a simple majority agreement • Can be time-consuming and expensive and not suitable for foodservice • Other techniques include: • Market research: systematic and formal procedure for developing and testing hypotheses about actual markets • Panel consensus: group of experts can produce a better forecast than one person; requires free communication among panel members • Visionary forecast: subjective guesswork and imagination • Historical analogy: comparative analysis of introduction and growth of new items with similar new-product history

How is quantity food production and equipment related?

• Quantity food production and equipment are closely related • Equipment available dictates choice of cooking methods • Almost every technical problem relating to cooking involves either method or equipment • Choices of cooking method and equipment affect daily operations (i.e. labor scheduling, productivity, product quality, speed of service, sanitation and maintenance, energy conservation, menu flexibility, and cost control) • Technology of cooking has increased efficiency and sophistication of equipment • Combination cooking methods apply both dry and moist heat • Equipment today is identified as moist heat, dry heat, and multifunctional

What are some keys in using ratio analysis?

• Ratio analysis is a tool for evaluating financial stability and operating effectiveness • Helps manages make decisions and control operations • Ratio must be appropriate to operation • Use a variety of ratios in analyzing operations • Ratios should be used in combination with trend analysis to compare changes over a period of time • Consistency in accounting methods is required to yield comparable data for comparisons over a period of time

What is a recipe? What kind of format is it in?

• Recipe: formula by which weighed and measured ingredients are combined in a specific procedure to meet predetermined standards • Written communication tool that passes info from the foodservice manager to ingredient room and production employees • Quality and quantity control tool: standards for customer/management approval • Cost can be computed because ingredients and amount will be same each time • Should have format that is easily understood by personnel • Tested repeatedly and accepted Format: • Written in a definite pattern or style • All recipes in the same format • Large quantity recipes differe from home recipes • Block format: ingredients are listed on the left side of the recipe and the corresponding procedures directly opposite them on the right, generally is used for quantity recipes • Complete block format: horizontal lines separate each group of ingredients with procedures from those of the next, and vertical lines separate the ingredient, amount, and procedure columns. • Modified version: only horizontal lines separate the required ingredients sfor each procedure • Specific information should be included to simplify its use: • Name of food item • Total yield • Portion size and number of portions • Cooking time and temperature, if required • List of ingredients in order of use • Amount of each ingredient by weight, measure, or count • Procedures • Panning or portioning information • Serving and garnishing suggestions • Food safety (HACCP guidelines) • Ingredients listed in order of use in four procedural groups • Standard U.S. weights and measures are generally used for all ingredients except small amounts of spices and oil (given in common household units of teaspoons and tablespoons) • Nutritive values per portion are provided • Include production, service, and storage procedures that prevent or reduce hazards • Food safety standards are given for the menu items in the notes • Weighing is more accurate than measuring, for determining the proper amount of an ingredient • Procedures should be checked for clarity and explicitness, so cook may prepare a perfect product without asking managers for explanation • Additional information at the bottom: variations of recipe, special serving instructions (garnishing, portioning, storage). • On bottom or back of recipe cards • Ingredient and procedure never be on back of card, use second card or page • Variations might help cook choose the one they like best • Flexibility not possible if computer program is used • Once format is chosen, all recipes should be printed in that style • In converting, adapt the most used recipes first then gradually extend conversion to the entire file • Conduct training on new format • Recipes for use at a workstation • Should be in large print that is easily readable at a distance of 18-20 inches; large file cards or 8.5x11 inch paper must be used • Recipes for ingredient room or production unit should be in a plastic cover while in use and in some type of rack at the workstations • Because of large print, do not have to pick up recipes for closer look • Recipe name generally in bold letters, either in middle or to the side at top of card • Organization of recipes • File coding system: letter designating menu item category and sequential number; color coding • Master file of recipes • Computerized database of recipes allow for recipe adjustments, purchase orders, and costing to be quickly completed • Keep backup file of all recipes

Define solvency ratios. What are the most popular ones?

• Solvency ratios: examine an establishment's ability to meet its long-term financial obligations and its financial leverage • Basic solvency ratio: relationship between total assets and total liabilities • Solvency ratio = Total assets Total liabilities • Other solvency ratios examine relationship between liabilities and equity (debt to equity ratio) and between liabilities and assets (debt to asset ratio)

What are the quantity adjustment procedures?

• Three procedures have been developed for the quantity adjustment of recipes: factor method, percentage method, direct reading measurement tables Factor Method • Ingredients are generally converted to whole numbers and decimal equivalents • Typically, only one decimal place is used unless original amount is less than 1 pound, in which two places would be shown • Liquid measures should be stated in weights, but may be converted to decimal equivalents of a quart or gallon • After converted, ingredients may be changed into units suitable for the weighing and measuring equipment used • Dry ingredients should be in pounds and ounces and liquids in cups and quarts • Scales may not be accurate for small amounts, so ingredients in 1 oz or less are stated in tablespoons or teaspoons. • Converting using factor method: • Changing ingredient amounts to whole numbers and decimals • Dividing the desired yield by the recipe yield to determine the conversion factor • Multiplying all recipe ingredients by the conversion factor • Reconverting the decimal unit back into pounds and ounces or quarts and cups • Rounding off amounts to quantities simple to weigh or measure and within an acceptable margin of errors • Checking math for possible errors

Describe trend analysis

• Trend analysis: comparison of results over several periods of time; changes may be noted in either absolute amounts or percentages • Forecasts future revenues or levels of activity • May use several of various types of ratios • Graphic analysis helps detect and understand changes

What are the phases of recipe verification?

• Verification phase includes four major processes that should be completed before the product is evaluated • Review components of the recipe (i.e. title, category, ingredients, weight/measure, prep instructions, cooking temperature and time, portion size, yield, equipment) • Make the recipe • Verify the recipe yield • Record changes on the recipe • Manager would work with one recipe at a time • Review of each of the recipe components should be completed before the recipe is made to ensure all necessary information is available