AHLEI Exam 100% PASS VERIFIED SOLUTIONS

AHLEI Exam 100% PASS VERIFIED SOLUTIONS Chapter 2 - ANSWER Process of effective planning - ANSWER 1. Vision: broad abstract view of what the organization seeks to be. 2. Mission: more specific statement of how that goal will be achieved. 3. Long-range plan (usually five years): indicates what managers want to accomplish within a certain time period in relation to the mission. 4. Business plan (revenue goals within the next year) 5. Marketing plan 6. Operating budget: details budget for revenue, costs associated with the products and services that are produced, and the property's financial goals for a specific time period. Basic steps in the control process - ANSWER 1. Establish and maintain standards. 2. Measure actual operating results. 3. Compare actual results with standards. 4. Take corrective action. 5. Evaluate corrective action. Aspects of effective standards - ANSWER o Be specific and measurable (quantity) o Encourage further creativity and challenge (quality) o Include feedback as part of the control system (control) Objectivity - ANSWER measurements of the level of performance must accurately reflect the desired results that control procedures are designed to monitor. o More likely to be achieved when designed by team managers with help from all affected staff. Chapter 3 - ANSWER Food Service control points - ANSWER basic operating activities that must be performed in any food service establishment. o Each control point plays a crucial role in determining the success or failure of a food service operation. The menu is not only a control tool, it also is a sales, advertising, merchandising, and marketing tool. o Addresses both control and marketing concerns and blends them into a workable system. - ANSWER Ingredients mark-up method - ANSWER attempts to consider all food costs: o Determine the ingredients costs from applicable standard recipes. o Determine the multiplier to mark up the ingredients costs. o Establish a base selling price by multiplying the ingredients costs by the multiplier Multiplier = 1/ desired food cost percentage - ANSWER Base selling price = ingredient cost x multiplier - ANSWER Average contribution margin per guest = (Non-food costs + required profit) / number of expected guests - ANSWER Prime costs method - ANSWER involves assessing the labor costs for the food service operation and factoring these costs into the pricing question. o Labor costs per guest = labor costs / number of expected guests Base selling price = (labor cost per guest + food cost) / desired prime cost percentage - ANSWER Menu engineering - ANSWER a manual computerized method of menu analysis and item pricing that considers both the profitability and popularity of competing menu items. o Stars: items that are profitable and popular. o Plow horses: items that are popular, but not profitable. o Puzzles: items that are profitable, but not popular. o Dogs: are neither popular nor profitable. Managing plow horses - ANSWER o Increase prices carefully. o Test for demand. o Relocate the item to a lower profile on the menu, o Shift demand to more desirable items. o Combine with lower-cost products. o Assess the direct labor factor. o Consider portion reduction. Menu-planning in multi-unit organizations - ANSWER o Consistency is a significant advantage. o Low opportunity for menu planning. o Menus of chain restaurants may differ internationally. o Have a corporate menu planning team. o Establish menu-item selling prices based on food costs and on the perception of what guests are willing to pay. Chapter 4 - ANSWER Operating budget - ANSWER a plan that estimates how much revenue will be generated and what expenses will be incurred to meet financial requirements and goals. o Short-term is most useful for a food and beverage services establishment. o Becomes part of the control process. Top-down budgeting - ANSWER budgets are developed at the corporate level and passed down to lower organization levels. o An advantage is putting the profit requirements in the hands of the corporate leaders. Calculating projected revenues - ANSWER o Forecasts are usually made separate for food and alcoholic revenues. o Helps managers pinpoint operating problems during the budget period. o Determined by multiplying the anticipated number of guests by the amount of the average check. Estimating beverage expense - ANSWER o Beverage cost = % of beverage revenue x total beverage revenue Variance - ANSWER o Revenue variance = actual - budget o Expense variance = budget - actual Mixed costs - ANSWER costs that contain both fixed and variable cost elements. Cost-volume profit analysis (CVP) - ANSWER can be used to determine the revenues required to generate any desired profit level. o Reviews the relationships between costs, revenue, and profits.