Introduction to Cost Control

Food Cost Control

It can be defined as guidance and regulation of cost of operations. It undertakes to guide and regulate cost needs to ensure that they are in accordance with the predetermined objectives of the business. Hence the guidance and regulations of cost are set as per expressed in the policy statements and budget of undertakings:

Food cost control means that:

1. You have a stick to your predetermined standards. You exercise restrains or directions over the price you pay, buy, prepare and sell goods.
2. You have your market as each food operation caters to a specific market. Standards vary from different markets. You set standards appropriate to your market before you buy, prepare and sell food.
3. You prepare cost control procedures.

Special Problems of F &B Control:-

Food and Beverage control tends to be more difficult than the control of materials in many other industries. The main reasons are:

The perishability of the product

Food, whether raw or cooked, is a perishable commodity and has a certain life. The caterer, therefore, has to ensure that he buys the product in correct quality and quantity in relation to the estimated demand and that it is correctly stored and processed.

The unpredictability of the volume of business

Sales stability is typical of most catering establishments. There is often a change in the volume of business from day to day and in many establishments from hour to hour. This causes a basic problem with regard to the quantities of commodities to be purchased and prepared as well as to the staffing required.

The unpredictability of the menu mix

To add to the caterer’s problem is the fact that in order to be competitive and satisfy a particular market, it is often necessary to offer a wide choice of menu items to the customers. Therefore it is necessary to be able to predict not only the number of customers but also the customer’s selection from the alternatives offered on the menu but it is seldom 100% accurate.

The short cycle of catering operation

The speed at which the catering operation takes place is very slow and only allows a little time for many control tasks to be performed. Items ordered one day are received, processed and sold the same day or the next day. It is for this reason, in larger catering establishments; cost reporting is done either daily or at least weekly.

Departmentalization

Many catering establishments have several production and service departments, offering different products and operating under different policies. It is, therefore, necessary to be able to produce separate trading results for each of the production and selling activities.