HRM 260 - Purchasing and Cost Controls

3 credit hours - 45 hours of lecture; one term.
Learn principles of food and beverage purchasing and cost controls as applied to food-service operations. Study the procurement and control of food, beverage, equipment, small wares, furniture, fixtures and textiles, as well as current systems of food and labor cost controls. Discuss budgets for food service operations, and menu analysis, pricing and planning.

Prerequisite(s): HRM 111 and either HRM 121 or HRM 124 or permission of the Director of the HCAT Institute.

Note: Typically offered OL; fall and spring terms.

Course Outcomes:

Explaine the concepts of purchasing, selection and procurement
- Define purchasing, selection and procurement
- Identify commercial and noncommercial hospitality operations
Define different types of costs
- Define fixed, variable, controllable, noncontrollable, unit, total, historical and planned costs
- Illustrate monetary and nonmonetary sales concepts
- Calculate cost to sales percent ratios
Describe the control process and cost volume profit relationships
- Define control and provide examples of its significance in hospitality management
- List steps in the control process
- prepare a budget given fixed and variable costs
- Explain the significance of the cost-benefit ratio when making control decisions
- Apply formulas used to compare cost/volume/profit relationships
Apply technology applications in purchasing and cost controls
- Explain how technologies are used by hospitality operators in the selection, procurement, and inventory process
- Explain how technologies are used by hospitality operators in monitoring and controlling food, beverage, and labor costs
Break down purchase/product distribution systems
- Outline the distribution systems in the hospitality industry
- Define major primary sources and intermediaries supplying products to the hospitality industry
- Describe types of distributors used in the delivery of food, beverage and FFE
Explain economic values and supplier services
- Explain the economic values added to products and services as they move through the channels of distribution
- Describe how economic values contribute to the cost value relationship and customer satisfaction
- Identify the economic forces that affect channels of distribution and economic value
Define purchase specifications
- List information inculded on purchase specifications
- Identify factors that influence information included on specifications
- Explain the potential problems related to purchase specifications
- Describe the relationship between quality and using government grades and packers’ brands
- Identify sources for finding product specifications
Discuss various methods of food controls used in the hospitality industry
- Identify controls in food purchasing and receiving
- Identify controls in food storing and issuing
- Discuss methods for establishing food production controls
- Define standards for controlling food production volume
- Explain the importance of assessing/monitoring food operation performance-monthly and annually
Discuss various methods of beverage controls used in the hospitality industry
- Identify controls in beverage purchasing and receiving
- Identify controls in beverage storing and issuing
- Discuss methods for establishing beverage production controls
- Define standards for controlling beverage production volume
- Explain the importance of assessing/monitoring beverage operation performance-monthly and annually
Discuss various methods of labor controls used in the hospitality industry
- List principle types of compensation common in hospitality operations
- Define labor cost control
- Differentiate between direct and indirect compensation
- Identify standards and standard procedures for employees
- Define job description and job analysis
- Identify the objectives of on the job training
- Develop a job training plan
Analyze menus for effectiveness using the menu engineering and analysis process
- Define star, dog, plowhorse and puzzle as they realate to menu analysis
- Perform a menu engineering analysis using the menu engineering worksheet
- Graph results of a menu analysis
- Describe appropriate action to take for menu analysis when menu changes are necessary
Describe methods of controlling food and beverage sales
- Identify goals of sales control
- Describe means of maximizing profits
- Explain the importance of proper menu preparation
- Explain methods of establishing menu/product/merchandise prices