Monitoring Beverage Operations

Chapter 16Monitoring Beverage OperationsPrinciples of Food, Beverage, and Labor Cost Controls, Ninth EditionManagement observes bar operationsDesignated employee observes others working at the bar and reports back to managementIndividuals unknown to the bartender visit the bar, observe employees, and report back to managementClosed-circuit television systems permit observation from some remote location Ways to Monitor Beverage Production The Cost ApproachCost percent methodsMonthly calculationsCost calculations by categoryDaily calculations The Liquid Measure ApproachOunce-control methodThe Sales Value ApproachActual sales record methodAverage sales value methodStandard deviation method Approaches for Monitoring Beverage Operations Cost Percent Formulas and Equations Opening beverage inventory+ Beverage purchases this month= Total available for sale this month– Closing inventory this month = Value of beverages issued to the bar Bar inventory value at the beginning of the month– Bar inventory value at the end of the month= Bar inventory differential Cost Percent Formulas and Equations Value of beverages issued to the bar+/– Inventory differential = Cost of beverages consumed Beverage cost percentage = Beverage cost ÷ Beverage sales Added to beverage costFood to bar (directs)Storeroom issuesMixersSubtracted from beverage costManagers’ drinksSpecial promotions Adjustments to Beverage Cost Determine bottle size and drink size.Calculate drinks per bottle.Multiply drinks per bottle by drink price to get sales value per bottle.Example Bottle size: 1 liter; drink size: 1 ounce33.8 drinks per bottle33.8 × $3.00 = $101.40 How to Calculate Bottle Sales Values Average inventory = (Opening inventory + Closing inventory) ÷ 2Turnover rate = Cost of beverages sold for a period ÷ Average inventory for the periodGenerally accepted turnover ratesSpirits—1.5Beers—2.0 Inventory Turnover © John Wiley & Sons, Inc. 2009