84 terms

Internship - Management II - Retail

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cost-based pricing
total costs / estimated attendance or units sold --> either breakeven analysis or revenue generating
breakeven analysis
ID a level of production to cover all fixed & variable cost of production in the ST; profit=0
breakeven point (BEP)
the point at which the operation is making nonprofit but incurring no loss, where total revenue = total expenses
BEP equation
fixed costs / 1 - (variable costs / sales)
revenue-generating pricing
offsets costs of operations; demand-oriented, FC %, prime cost method
demand-oriented pricing method
based on what customers perceive the cost to be and are willing to pay, common for new/trendy items
food cost percentage pricing method
the ratio of the cost of food over the revenue received from selling the food, used to calculate a markup factor
raw food cost per serving =
total raw food cost for all ingredients (AP quantity x unit price) / # servings
markup factor =
100 / (desired % - not in decimal form - of food income spent on raw food costs)
selling price using the food cost percentage method
(raw food costs + hidden costs) x markup factor
hidden costs
items provided but not sold (condiments, napkins, etc) + losses during preparation, cooking, serving; usually 10% of raw food costs
rule-of-thumb acceptable FC%
40%
prime cost method
reflects labor costs directly to spread cost of the FS evenly among customers
prime cost method equation
(Raw food costs + hidden costs + labor) x markup; markup will be lower because LC (usually part of the markup) are taken into account separately.
loss leader pricing method
selling an item at a sale price lower than the actual cost in order to bring consumers into the store with the expectation that they will purchase other items not on sale
FC/Meal =
Total FC / # meals served
FC% =
cost of food sold / food sales
LC/Meal =
Total LC (salaries+wages+benefits) / # meals served
LC% =
cost of labor (salaries+wages+benefits) / total sales
Meals/Labor Hour
# meals served / # labor hours needed to produce the meals
Meals / FTE
# meals served / # FTE to produce the meals
Profit Margin (%) =
net Profit / sales
profit
the monetary amount of income after all expenses have been deducted from income/revenue
gross profit =
sales - cost of goods sold
net profit =
gross profit - labor/misc/operating costs
income statement
financial report that includes the revenue, expenses, and net income over a period of time); shows whether the business made or lost money during the period being reported
another name for the income statement
profit & loss statement
income statement: static or dynamic?
dynamic
components of an income statement
1. sales/revenue: cash receipts or funds allocated to the operation for the period of time covered by the report
2. cost of food sold = (beginning inventory + purchases) - ending inventory
3. net profit
4. gross profit
labor turnover
% employees replaced per year for any reason
turnover rate =
(total employee terminations / average work force for specific period) x 100
steps to reduce labor turnover
1. clearly convey goals, objectives, philosophies
2. document & communicate P&P
3. hire based on job descriptions/specs
4. train & supervise regularly
5. provide reasonable benefits
6. ensure safe & sanitary environment
7. recognize employee achievements
8. establish & enforce grievance policies
9. encourage participation in meetings
10. keep records on reasons for reprimands, resignations, firings
11. evaluate reports & provide feedback
associated costs with labor turnover
1. break-in: new employee's reduced performance while learning a job
2. lost production cost: running with low or reduced staff when people leave and have not yet been replaced
3. taxes: unemployment insurance tax rate increases for employer if terminated individual collects unemployment
4. bookkeeping: completing necessary paperwork for hiring/termination
FTE
compares management of regular, FT workers to PT or short hour workers; 8hrs/day, 40hrs/wk, 2080 hrs/yr
how do you compute FTE?
sum of all hours worked by all employees, divide by 40 (for weekly)
productivity
the efficiency with which a production or service activity converts inputs into outputs, expressed as ratios
productivity: inputs v. outputs
labor, $, materials, energy v. meals, patient days, # consults, etc.
how is productivity measured?
#meals/labor hour, labor min worked/day, trays/min, consults/labor hour, etc
work simplification definition
eliminating unnecessary parts of the job by looking at the smallest parts of the job
work simplification can include
motion economy, work sampling, process charts, cross charts, operation charts, micromotion studies
motion economy
reducing motions and time required
work sampling
observe random samples
process charts
graphic presentation of work motions designed to improve the efficiency of the method
cross charts
efficiency of equipment, work motion studies, # movements between each equipment
operation charts
document efficient movement of hands based on transport and action
micromotion studies
use photographs of motion taken at fractions of a second
work simplification outcomes
increased productivity, decreased costs
types of budgets
master, operational, capital, revenue, cash flow
master budgets
composite of operational+capital+revenue+cash flow; profit estimates
operational budgets
guide day-to-day operation; foundation for planning, controlling
statistical budgets
estimate the volume of sales in commercial operations or services in noncommercial operations
capital budgets
foundation for growth; expansion, repairs of large equipment/facility, etc.
revenue budgets
estimated income from sales, services, grants, investments
cash flow budgets
estimated cash flow in & out during a given period via cash receipts
incremental budgets
a budget base don last year's budget, using that as the base and making specific % change projections
performance budgets
gives priority and additional funding to functions that exceed income generation projections/have high productivity
zero based budget (ZBB)
created new each year, start from scratch & allocate funds via justification of continued or new activities
fixed budget
compare actual financial performance with expected performance to make firm projections set for the whole budget cycle
components of a budget
1. direct expenses: tied to a specific department or service, vary directly with sales
2. indirect (fixed) expenses: not directly evident in day to day activities (e.g. taxes, rent, etc.)
3. sunk costs: already incurred, cannot be recouped by an alternative
4. differential costs: increase/decrease when comparing alternatives
5. semi-variable costs: both fixed & variable components
6. capital expenditures: major improvements, building, land, large equipment, etc.
7. revenue: total income from sales, services
cost benefit analysis
evaluation of whether or not a particular project is worth completing, or if there's something that's more worthwhile to pursue than others; compares total costs with total benefits in financial terms
cost effectiveness analysis
assumes goal of the project is worthwhile so must determine which method of intervention is most effective; cost comparison of alternate strategies
value analysis
process of researching all aspects of a service with the goal of discovering/eliminating unneeded costs that don't interfere with the effectiveness
functions of management
planning, organizing, directing, controlling
planning
developing the activities required to accomplish organization objectives and the most important way of doing so; involves developing a vision/philosophy/slogan/mission statement, then P&P
policies vs. procedures
decision making guides vs. detailed guidelines for regularly occurring planned experiences
organizing
developing the formal structure through which work is divided, defined, and coordinated; ID tasks and divide them into positions
organizational structure
chain of command from top to lowest showing formal relationships only; each individual receives orders from only 1 superior (unity of command)
directing
continuous process of employing & training people while maintaining favorable work conditions; involves coordinating, delegating, & understanding span of control
coordinating
interrelating the various parts of a process to create a smooth work flow
delegating
distribution of work to qualified people
line vs. staff
line: each individual is responsible to the person ranking above him/her on the organization chart, indicated by solid lines VS. staff: advisory specialists outside the chain of command who advise and support the line but are technically not part of it, indicated by dotted lines
steps in decision making
1. ID the project and select problems/opportunities for improvement
2. assess current situation (statistical data, present process evaluation, assess client needs & expectations)
3. analyze the cause of the problem
4. develop solutions (brainstorm, risk-benefit analysis, barriers to change) & consider implementing a pilot project to evaluate & improve before instituting widespread change
5. implement the improved pilot project and change until stable and predictable, then institute the full process
6. standardize the improvement to transfer what 1 person or project team learns to a system that becomes part of the organizational routine
7. relate the improvement to future plans
8. continue to monitor and evaluate, adjusted as needed
the 4 p's of marketing
1. product: the item or service that satisfies what a consumer needs or wants
2. price: the amount the customer pays for the product, determines the company's profit
3. promotion: all methods of communication that a marketer may use to provide information to different parties about the product
4. place: providing the product in an area convenient for consumers to access
job description
an organized list of duties, skills and responsibilities required in a specific position; defines limits of authority & responsibility
job specification
written statement of the minimum standards that must be met by an applicant for a particular job (duties involved, working conditions, personal qualifications required)
traditional serving counter design
emplyees are stationed behind the counter to serve 3-4guests/min either in a straight line, parallel, double line, zig-zag, or u-shaped
scramble serving counter design
aka free flow or hollow square; separate counters for hot foods, salads, etc. used often with repeat customers (e.g. school cafeterias) to serve a greater # people (25/min)
average customer check =
total sales / # guests served
aisle width specifications
1. lane w/ 1 person: 36-42"
2. lane w/ >1 person or where mobile equipment passes: 48-52"
3. main traffic lane: 60"
optimum counter height specifications
1. heavy work: 36"
2. light work: 37-41"
heavy equipment must be ___" off the floor and ___" away from the wall
6, 12-24
floor material specifications
1. kitchens: quarry or clay
2. receiving, storerooms: concrete
3. dining: terrazzo, rubber, or asphalt tile
4. light traffic dining: asphalt
what does the FDA regulate?
1. food, drug & cosmetic act: standards f identity, quality, container fill; additives
2. fair packaging & labeling act
3. nutrition labeling & education act
what does the FDA inspect?
1. manufacturers or processors of FDA regulated products to verify they comply with regulations (e.g. food processing facilities, dairy farms, animal feed processors)
2. foreign manufacturing and processing sites for FDA-regulated products sold in US