COST CONTROL

                                                                Cost Control

Control may be defined as a process by means of which managers attempt to direct, regulate and restrain the actions of people in order to achieve the desired goals of the establishment: financial success, preservation of sound environment, etc.

Steps in cost control –

Establishment of standards

 

Measuring performance

 

Taking corrective action ( if required )

ü  Establishment of standards include establishment of procedures, standard purchase specification, standard recipe, standard yield, etc. which are set a benchmark for performance.

ü  Measuring performance is done against the set standards; variance is checked to find how closely standards are being followed.

ü  Ideal = Actual +/- Variance, Variance should be within set parameters/ tolerable limits. Corrective actions are taken when the variance is beyond tolerable limits, which may include re-establishment of standards, if required.

Objectives and Advantages

·         To ascertain the profitability of each revenue-producing department.

·         To reveal the possible sources of economy.

·         To facilitate the optimum and better utilization of resources.

·         To obtain information for the adaptation of a sound pricing policy.

·         To give an opportunity for comparison.

·         To increase the efficiency of the employees.

·         To reduce the wastage and pilferage.

·         To allow flexibility in the selling price in case of the banquet functions this in turn results in higher revenue.

·         To prevent fraud by staff.

·         To set example for the subordinates by the managers or leaders (i.e. the supervisors).

 Methods of controlling food cost

                                I.            Ordering perishable food in quantities for immediate use in preparations and service.

                              II.            Ordering non-perishables food in quantities which can be turned over fast to prevent spoilage.

                            III.            Offering incentives to the staff for achieving sales target.

                            IV.            Using standard recipes from which portions can be easily identified.

                              V.            Close supervision and regular checks at strategic points to pinpoint area of variance and correct them in food control cycle.

                            VI.            Using modular equipments for storage, preparation and service.

                          VII.            Portioning of dishes in the kitchen, by handing it over to the service staff.