The Gold Coast Convention Centre offers as part of its operation, a newly created catering service for the various events and conferences held at the facility. The initial year of operation has seen an annual turnover of $800,000; represented by a 70% of food and a 30% of beverage sales.
The Food and Beverage (F&B) manager of the catering service was appointed to the job as a temporary replacement, which lasted for the whole first year. He came to this role with very limited food and beverage experience. While he is aware of exactly how the sales revenue is made up by each component of the service, he does not know what margins they make. Being an inexperienced F&B manager he has decided that, there was no need to introduce any system for controlling stock or purchases, relying instead on employees and his own experience. He always assumed that employees are honest and know their job and therefore only checked the final yearly results.
A brief look at the accounts identifies the following:
Food sales $510,000
Cost of food sales $315,000
Beverage sales $290,000
Cost of beverage sales $112,000
While it is considered successful in the eyes of the F&B manager, this operation is not performing as well as it could. Some negative feedback has been received by the General Manager, from customers participating in various events and conferences. The following are some examples of feedback:
You have been hired by the General Manager as an expert to advise him on what procedures they should adopt in terms of purchasing, receiving, storage and production that would mitigate these customers’ comments and generally improve the performance of the catering service. Your task for this assessment is to analyse the information provided above, critically evaluate current procedures, and make recommendations for improvement to the GM in the form of a report. In your analysis you should also consider the accounting figures presented above which will help you further understand the situation and the difficulties management is facing.
Marking criteria for the report
10% Discussion of key issues/problems
10% Critical evaluation of the inventory cycle procedures drawing on the relevant literature
10% Discussion on suggested improvements supported by the literature
5% Appropriateness and feasibility of recommendations
5% Report format (spelling, grammar, referencing and logical flow of ideas)