F&B MANAGEMENT ASSIGNMENT- 3

SUBMITTED TO - TARU SAXENA

SUBMITTED BY - PRINCE ANAND
ROLL NO:- 1741102156
 Assignment 3. Explain the following terms:
Answer:-

PAR stock :

In hotel industry, PAR stock is a widely used term which is the standard wayto determine the minimum level of
supplies to meet daily demands of daily hoteloperation.
Master Budget :

The master budget is the aggregation of all lower-level budgets produced by a company's various functional areas,
and also includes budgeted financial statements, a cash forecast, and a financingplan.
ZeroBudget

Zerobudget is a method of budgeting which all expenses must be justified for each new period. It starts from a "zero
base," and every function within an organization is analyzed for its needs andcosts.
MEDIUM TERM BUDGET:
Medium term is a three-year period formed by the financial year for which the state budget is planned and the
subsequent two financial years. ... The first year of the Framework Law period is extended in detail in respective
State Budget Law.
Reorder Level
ln management accounting, reorder level (or reorder point) is the inventory level at which a company would place a
new order or start a new manufacturing run. Reorder level depends on a company's work-order lead time and its
demand during that time and whether the company maintain a safety stock.
Formula Reorder level depends on whether a safety stock is maintained.If there is no safety stock, reorder level can
be worked out using the following formula:
Reorder Level = Average Demand × Lead Time
Both demand and lead time must be in the same unit of time i.e. both should in in days or weeks, etc.If a company
maintains a safety stock, reorder level calculation changes are follows:
Reorder Level = Average Demand × Lead Time + Safety Stock
STANDARD COST

An estimated or predetermined cost of performing an operation or producing a good or service, under normal
 reason. Every detail of the menu deserves the closest Scrutiny.
The menu must fit the market, the facility, the ability of employees if the operation is to succeed. The menu should
have the merchandising effect it should help you sell what you want to sell more, and it should also help the guest to
choose from the menu what he wants without much loss of time and due consideration should be given to the paper
on which it is printed, format and layout etc.
Clean
The presentation of dirty, spotted, worn menu is the poorest way to start a meal. We all know that cleanliness is a
must in our business
Legible
This means that menus should be easy to read. The type selected should be attractive and easy to decipher
Organized
A menu should be well organized. Similar items should be grouped together and attractive headings may be
assigned to the groups. The purpose of a well-organized menu is that the
customer should be able to find what he/she wants quickly without reading the entire menu.
Easy to change
Even the most carefully planned menus must be changed from time to time. The change may be necessary because
of change in prices, need to add or drop some items for a varied variety of reasons.
Fit the operation
To serve good food with prompt service, you must have a menu designed to fit the place. It must match the size and
types of equipment, their capacity, and also the skill of the personnel
Merchandising effect
Design your menu to sell the items you want to sell your speciality or an item that can be served fast and is
profitable. Such items should be tactfully located different typefaces can be used to emphasise one item over
another or attractive borders can be used to make something stand out.
Language
Many guests are embarrassed to ask what a foreign term means and will pass on to something that they understand
where a menu is written in French, the English equivalents should be given. It is a good idea to describe the dishes
in the language which is understood by the majority of guests.
Descriptive headings
Descriptive headings mean quoting such headings on the menu various groups of food which will attract the
attention of the customer and will indicate the nature of dish more clearly.
 Intuition: Setting prices based on feelings
Competition: Setting prices based on what your competitors are doing
Follow the Leader: Setting prices based on what the implied leader in the marketplace is doing
Psychological: Setting prices based on a customer's perceived value
2. Cost plus markup pricing: This form of pricing structure involves adding an additional amount, or markup, on top of
product costs. For example, if a menu item costs $5 to make, and the desired markup is 50 percent, the new price for
that menu item is $7.50.Cost plus markup pricing is a popular option for restaurants because of its simple formula
that can be applied to each menu item and is based on mathematical data such as the actual costs that go into
preparing a menu item.
3. Product cost percentage pricing: Product cost percentage pricing uses the targeted ideal cost percentage and
potential cost of an item to arrive at a menu price. The targeted ideal cost percentage is how much an establishment
hopes to spend on a menu item.
ABC analysis
ABC analysis is a type of inventory categorization method in which inventory is divided into three categories, A, B, and
C, in descending value. A has the highest value items, B is lower value than A, and C has the lowest value.Inventory
management and optimization in general is critical for business to help keep their costs under control. ABC analysis
works towards this goal by letting management focus most of their attention on the few highest value goods (the A-
items) and not on the many low value, trivial goods (the C-items).
ABC analysis works by breaking it down in the following ways:
A-items: 20% of all goods contribute to 70-80% of the annual consumption value of the items
B-items: 30% of all goods contribute to 15-25% of the annual consumption value of the items
C-items: 50% of all goods contribute only 5% of the annual consumption value of the items
Cumulative report
Cumulative report is a graphical representation of measuring the performance of your project over time. It can not
STANDARD
only display PORTION
plan versus actuals, but also planned values versus earned values as they accumulate. This time-phased
report will give you visual information on your team's performance.
A Standard Portion Size represents the amount (weight, count,
LEAD TIMEsize or value) of each food item
which
A leadistime
soldistothe
thelatency
guest for a stated
between price
the and should
initiation be established
and completion for all items,
of a process. includingthe lead time between the
For example,
appetizers,
placement mainr
of ancourses, vegetables,
order and salads,
delivery of desserts,
new cars beverages,
by a given etc.The main
manufacturer mightobjective of 2 weeks and 6 months,
be between
standard portion size is to serve the guestdepending
with a measured quantity
on various of food for which he is
particularities
paying, thereby earning guest satisfaction.It is used as a tool for controlling staff activity
regarding production & sales and determining the standard cost per portion.Some examples of
Sales Mix

Sales mix is the relative proportion or ratio of a business's products that are sold. Sales mix
is important because a company's products usually have different degrees of profitability.
Sales mix also applies to service businesses since the services provided will likely have
different levels of profitability.
ECR

An electronic cash register (ECR) is a system designed to enable products to be sold at a

retail outlet. Electronic cash registers help large retail outlets track sales, minimize register
errors, collect inventory data and much more.
An electronic cash register typically processes goods by: Reading the information contained
on a product label (usually using a scanner) Checking the price database for the price
matching the label information Adding that price to the running total of all products being
purchased by the customer Sending data to sales and inventory software after the sale is
complete The sales system is incomplete without other software applications that turn ECR
data into operational signals, such as an order to ship more or less of a certain product to a
location based on sales.
CONTRIBUTION

The contribution margin pricing method sets the price of a menu item by adding the
desired profit per customer to the average price of the total costs per customer. The name
reflects the concept that each customer contributes the same amount of profit and shared
portion of expenses to the business.