THE PROBLEM AND ITS SCOPE
Nowadays, there has been an increasing number of people who prefer to dine out instead of eating home-cooked meals. It provides business-minded people the opportunity to open food service businesses such as restaurants. It is reflected by the rise of such establishments, especially in the cities. But newcomers in the industry signify also new trends that customers would want to consider. As a result of this, a competitive market is established making it challenging to attract and retain customers. It may be a profitable venture due to the current demands of the growing market but the costs incurred are also increasing in value due to inflating prices of commodities in the market. Thus, cost control practices are imperative for a business to survive in the industry.
Cost control in a restaurant is essential to its success. It limits the occurrence of excessive costs and maintains a system that helps in effectively running the operations. Following established standards can control costs and may even boost the image of a business. One important category of costs in a restaurant is the materials cost, which is the cash tied to all food items being used in producing the food orders of customers. To effectively manage this type of cost, one must strongly implement inventory control. It does not only focus on costs, it focuses on what drives this costs and how to control them. Inventory control is necessary to prevent spillage, spoilage, theft, and other sources of unnecessary costs that must be eliminated or in the least, reduced.
The stages that add cost to food products involves the whole process in the kitchen – from ordering the ingredients to serving the foods. Every phase is just as important as the others in controlling the movement of inventory along with its costs. Assessing whether controls are being observed during the process will aid in determining which areas need to be supervised and improved.
In this light, the researchers will conduct a study that aims to identify materials cost control practices of restaurants that are employed by the management in their operations.
The Philippine Department of Labor and Employment (2012) define restaurants as places where food and drinks are served to customers in return for money. Dining out with family and friends is the usual reason why people come to restaurants. Menu served varies according to the kind and specialty the restaurant offers. The 2015 Annual Survey of Philippine Business and Industry (ASPBI) final results recorded a total of 27,028 establishments engaged in Accommodation and Food Service Activities in the formal sector of the economy. Among industries, restaurants led the sector with 6,652 establishments. It accounts for 24.6 percent of the total number of establishments. Bohol, aside from being one of Philippines’ most iconic travel destinations (Bohol Tourism, 2018), is also a good place to discover tasty, homegrown eats (Dizon, 2018). Authentic meals in Bohol feature the taste, smell, color, and texture of Filipino cuisines.
Full-service restaurants are increasingly growing, evidenced by the intense competition in this segment as restaurant operators have always been interested in new and exciting menu ideas to attract customers (IFEX Philippines, 2018). Based on the 2012 nationwide Census of Philippine Business and Industry (CPBI), the Philippines food service industry amounts to nearly US$7.2 billion with an estimated 15% to 20% annual growth over past decades.
As a restaurant operator, managing inventories efficiently is essential for running a successful business. According to Anderson et al. (2012), an inventory is everything that is found in the restaurant’s establishment. Anything that costs money to the business should be counted as part of the inventory. Examples include produce (farm-produced crops and goods), pots, and pans, uniforms, liquor, linens, and many more. Managing inventory is connected to everything: from planning the menu to determining how many customers the restaurant can feed (WebstaurantStore, 2018), thus getting it under control is an absolute priority (Adlington, 2016). As stated by Vaseloff et al. (2006), restaurants must be able to know the inventory levels of all food items at various stages of production to manage the inventory of the food inventory efficiently.
According to WebstaurantStore (2018), there are various reasons why restaurants ought to closely and consistently track their inventories. First is to plan out their menus. It will help restaurant operators determine the number of materials on hand and what meals can still be able to produce given the inventories left. Also, material shortages and surpluses can be avoided. Second is to track food usage. It will enable them to draw and analyze trends in their materials usage thus helping them anticipate and avoid other inventory problems in the future. Accurate tracking of materials used can be done by taking a consistent inventory of their consumables and supplies. The third is to calculate the cost of goods sold. Cost of goods sold commonly called food cost is the cost that a restaurant uses to produce its food and beverage revenue (Letchinger, 2017). Moreover, Beltis (2017) mentioned that one of the most important performance metrics a restaurateur should track is the cost of goods sold as it links directly to the restaurants’ profit margin, revenue, and inventory. Lastly is to determine food costs and control waste. Excessive waste can be identified, and materials can be prevented from running out of staples through inventory tracking (Gourmet Marketing, 2016).
Cost control in restaurants has always been a major concern (Adlington, 2016). The Institute of Cost Accountants of India (2012) defines cost as a measurement in monetary terms of the amount of resources used for the purpose of production of goods or rendering services. On the other hand, cost control is the process employed by managers in the regulation of costs and safeguard against unnecessary cost (Dittmer ; Keefe, 2009). It is essential as it allows the restaurant operators to identify which needs a corrective and preventive measure to keep costs within acceptable bounds. Even more, to have total control over all raw material costs improves the restaurant’s economy (Hellström, 2017).
An important aspect of any food service cost control system includes the control and reporting of spillage, spoilage, and pilferage (Ojugo, 2010). Spillage is where due to the production of a series of defective products, results in the loss of production output (Wikipedia, 2018). Spillage, as defined by E Travel Week (2015) is an item that is accidentally dropped, spilled or tipped over during the delivery and serving to the guest. Any item that has been incorrectly ordered and dispensed, and cannot be resold is also included in the definition of spillage.
On the other hand, E Travel Week (2015) also define spoilage as any beverage or food item that is found to be expired and is considered unusable, any accidental damage occurred to any container which renders the contents of such unusable or unsalable, any beverage or food item that shows signs of contamination or decay, making its usage dangerous for human consumption, and any item that is not up to standard. In addition to that, Wikipedia (2018) defines spoilage as the process in which food is deteriorated leaving it unacceptable and not edible to humans. Spoilage is usually associated with perishable raw materials due to it having a short lifespan (Bragg, 2018).
As defined in Cambridge English Dictionary (2018), pilferage is the act of stealing things of small value often repeatedly performed over a long period of time. It occurs when employees illegally take inventory items for their personal use (National Restaurant Association, 2011).
In his study, Tracey (2009) pointed out the eight-step approach to control food costs. However, this research focuses only three out those eight steps mentioned, and this includes ordering, receiving, and storage.
In a restaurant, it is important to establish and observe proper purchasing procedures as it is considered a key operational phase in the food cost control process (National Restaurant Association, 2013), although every kitchen may have different procedures (BC Cook Articulation Committee, 2012). According to the Georgia Restaurant Association (GRA), one of the five areas where food service businesses could manage its food costs is the purchases. Purchasing refers to the ordering of a sufficient amount of necessary food items that can fit into available storage capacity (Johnson and Wales University) and may undergo stock rotation (Dopson & Hayes, 2016). Over-purchasing or ordering in overly large purchase quantities more than the standard amounts (Tracey, 2009) is one concern for a restaurant manager as it may lead to spoilage for perishables while nonperishables are more prone to pilferage (Dittmer & Keefe, 2009). However, employing control practices at the purchasing level can guard against such issue. Following such procedures and practices allow managers to control not only food costs but also to avoid unnecessary inventory losses.
Some authors indicated that the first phase of a foodservice purchasing process, which is essential to inventory and cost control, is preparing the purchase order (Stefanelli, 2009; Jonhson and Wales University 2010). However, other authors presented pre-purchasing procedures or have incorporated other steps in the purchasing process (National Restaurant Association, 2013) such as the development of product specifications. In order to integrate control before developing the purchase order, it is important to identify quantity and quality standards of the raw materials to be included in the food production process (Dittmer & Keefe, 2009). The setting of standards is one control technique that managers perform to guide them in the management of costs and inventory. Standard quantities and qualities are written to produce product specifications. Product specifications, whether formal or informal, must be detailed and precise, if possible. This is to avoid wastage in the food production process due to poor purchasing decisions in choosing between varieties of food items (Johnson and Wales University, 2010). Also, most standards being specified are calculated based on standardized recipes used in the production process. These recipes depict the needed quantity of ingredients and their various quality grades for the preparation of various dishes. Using these standard recipes, one can prevent wastage in the production process (Dittmer & Keefe, 2009).
Now, basing on the standards established, the next step is to develop the purchase order. The purchase order provides the authority to procure needed materials which will then be sent out to vendors. The responsibility of ordering or purchasing may be assigned to the chef and the sous chef (BC Cook Articulation Committee, 2012), or a designated personnel in the purchasing department of large operators while in smaller operations, it may be left to a general manager (National Restaurant Association, 2013; Dittmer & Keefe, 2009). A purchasing personnel, in general, must possess sufficient knowledge in order to follow the right procedures in purchasing, especially if he was designated to do the purchasing by the manager. The purchasing personnel has the duty to purchase only the products that are needed as soon as the materials are delivered (BC Campus, 2012) to avoid overstocking which may lead to waste. Some authors concur that the preparation of the purchase order is best left to the chef, where practicable, while a purchasing manager places the order and another one is tasked with the receiving responsibility. This is to avoid any possible instances of theft during the procurement process.
One good practice is keeping track of purchase order documents (Tracey, 2009) which is important when cross-verifying the goods received per invoice to the order placed. Purchase orders are made for every purchase with the exception on the daily order of fresh fruit and vegetables while non-perishables may be ordered less frequently.
Inventory management decisions are as important as purchasing decisions since determining desired inventory levels will affect the quantities of ingredients to be ordered (Dopson & Hayes. 2016). A buyer or purchasing manager may choose to buy food items as needed (just in time) or by stating the par stock. Purchasing ingredients using just-in-time method refers to ordering the least amount of stock needed in the production process based on estimated sales of menu items and stated amounts in the standardized recipes. Also, for Muller (2012), these raw materials purchased just in time are being delivered on a daily basis. At the end of the day, no inventory will be expected in the storage rooms since the products are purchased as required with no extra order. Thus, minimum waste will also be observed as well as very low carrying or storage costs (Barwa, 2015). On the other hand, setting the purchase point at par stock is in line with managing inventory using the periodic method. For Dopson and Hayes (2016), determining the par level includes setting the minimum amount based on normal usage and then adding an extra amount to have on hand in case of high demand which is also referred as the safety stock.
There are two methods to maintain inventories being purchased. First is the most commonly used periodic ordering method. This involves using bin cards and establishing the par stock. The par level, as previously discussed, is the amount you should have on hand to get by the operations until the next delivery. Having a fixed location and labeling the shelves will also aid in inventory management. Using bin cards as shelf labels can help in recording the items received or ordered on a regular basis or as scheduled. Usually, physical inventory taking is done at month end (Dopson & Hayes, 2016).
Arguably, according to the book entitled Culinary Essentials (Johnson and Wales University, 2010), the perpetual inventory method is also being observed by many establishments. With the help of perpetual inventory cards, a third person, not assigned to the storeroom, shall monitor the flow of goods purchased as the materials are received and as issued so that amounts recorder will be equal to actual inventory on hand at any given time.
Another tool for purchasing is to use order guides (Tracey, 2009). An order guide consolidates all details related to purchasing of food products which employees in large establishments may use in ordering such items (National Restaurant Association, 2013). It includes the various product specifications that were formed beforehand, and other additional instructions, such as placing acceptable substitutes for certain products. Knowing possible product substitutions will help when products become unavailable or when products ordered increased in cost as to prices set by vendors. This order guide may be used for future references or customized when circumstances permit such changes.
Now the last step in the ordering process is selecting the vendor as stated by the National Restaurant Association (2013), however other authors include the receiving, storing and issuing procedures in the purchasing process (Stefanelli, 2009; Johnson and Wales University, 2010). With the order in place, the next question is whom should the buyer purchase the goods from. There are different practices as to choosing eligible vendors. Where practicable, it is good to order from a local grower (Tracey, 2009). Having a local food supplier can guarantee fresher products, and may offer deals such as lower prices, especially if the operators are within the proximity. One purchasing method, considering that not all foodservice industries have the convenience to order from local vendors, is to choose from price quotations of various suppliers. This is done mostly by independent restaurants (National Restaurant Association, 2013). These quotes will be weighed in order to choose the best vendor to provide per the company’s order.
When choosing to buy based on competitive quotes, which is used primarily used by independent and small establishments, there is a need for detailed specifications to achieve the best quality at the best price. Also, other products such as dairy and baking may use a standing order that calls for a regular delivery and replenishment of goods. Choosing a prime vendor needs established par levels as basis for purchase quantity to efficiently cooperate with one trusted supplier. It also helps reduce costs on transportation since goods are delivered by one supplier (National Restaurant Association, 2013).
Next step to purchasing is the receiving process. Other aspects of procurement such as receiving and storing of inventories are crucial as purchasing. Without proper controls in receiving and storage process, careful planning for purchasing would make it ineffective (Spears, 2000).
According to the definition of Johnson ; Wales University (2010), receiving is accepting deliveries of food and supply. Furthermore, receiving refers to the activity of ensuring that products delivered conform to what was ordered (Spears, 2000). The objective of receiving department is to make sure that goods accepted are in the purchase order. This duty is performed by a receiving clerk of a large establishment or by a manager or designated staff, in the case of small establishments. Guerrero (2014) mentioned that receiving clerk is responsible for unpacking the items received, checking the quantity received and transferring the goods to the storeroom. Consequently, the receiving clerk prepares a receiving report. The receiving report contains the details of the shipment as well as comments on the condition of the materials received.
Although receiving practices vary with different food service companies, the general principles governing the process are comparing the incoming product with the purchase order, inspection of the product specification, and inspection of delivery invoice. The invoice will serve as a source document for further processing of bills and prompt transfer of goods to proper storage. However, there are some cases wherein the inspection of inventory received is not done immediately by the receiving clerk (Kinney et al., 2013).
The possibility of receiving goods not part of the purchase order is inevitable. Hence, the need for inspection arises. Inspection eliminates if not reduces the risk of accepting perished food products and items lost partly due to spillage and theft. Among the control procedures to reduce the risks are: (a) checking the quality of the goods received from the suppliers, which includes product temperature, refrigeration state, weight, grade, and whether the product has been frozen or thawed; (b) designating different staffs for purchasing and receiving to avoid the possibility of fraud or theft, and; (c) conducting physical inventory on the goods received (Dittmer ; Keefe, 2009).
Quality verification requires knowledge of inspection of delivered foods and careful comparison of perceived quality with the quality established in the standard purchase specification (Dittmer ; Keefe, 2009). Accepting delivery of products that do not match these specifications is simply wasting not just time and effort but also the money (Dopson et al., 2002). Furthermore, the management must also be clear about the policies regarding substitution of products from the vendor. It will be up to the management whether to accept a much higher quality or lower quality or to look for another supplier of such particular goods. Keeping an eye for quality does not merely ensures that management gets what it pays for but also for the guests to receive what they deserved. Accepting a lower quality may lessen costs but it may indicate a sign that management is not employing a concept of standard quality standards.
On the other hand, quantity verification must also be a concern to the management. It involves the counting and weighing of product. Verifying quantities is done to make sure that the management only pays for the products that have been received, and to make sure that it matches with the purchase order. Not being able to match the quantities received with the purchase order may cause the restaurant from running out of staples or it may need to use substitutes.
Some restaurant operators establish a contract price with suppliers. According to Dopson et al. (2002), a contract price is an agreement between buyer and seller to consistently hold the price of a product over a defined period of time. Control in the receiving process also requires price verification of whether the price appearing on the invoice matches with the price quoted in the purchase order (Dittmer ; Keefe, 2009).
Appropriate actions should be taken if the quantity, quality, or price of foods does not conform to the placed orders. These actions may involve returning goods for refund or replacement or demand for the lack of quantity should it be lesser than what was ordered.
After the receiving department has done its function, it will transfer the raw materials to the storeroom. Storage is important to the overall operation of a food service because it links receiving and production (Spears, 2000). Johnson ; Wales University (2010) defines storing as keeping food to a location for later use in the production. The person designated to manage the storeroom is the storeroom personnel. The storeroom personnel is responsible for the protection of materials in the storeroom and ensures that the food and supplies are in the proper storage area. Specifically, the storeroom personnel should ensure that inventories are protected from theft, spoilage, and waste (Ojugo, 1999).
According to Dittmer and Keefe (2009), the standards established for storing food addresses four principal concerns such as the condition of facilities and equipment, arrangement of foods, the location of facilities, and security of storage areas. The condition of facilities and equipment includes storage containers, temperature, cleanliness, and shelving. The elements involved in maintaining an appropriate internal arrangement of foods include keeping the most-used items readily available, rotating stock, and fixing definite locations for each item. Lastly, an entity should never store raw materials in a way that permits pilferage (Dittmer ; Keefe, 2009).
In order to avoid pilferage from occurring, the accessibility to the storeroom area should be restricted to the employee under the immediate supervision of the storeroom supervisor. It is also important to conduct physical inventory on a regular basis and review whether raw materials per inventory count matches with raw materials per records. Moreover, to prevent raw materials especially food products that are highly perishable from being spoiled, these food products should be moved to the proper storage area as soon as possible from the time they are received (Tracey, 2009).
Whenever it is practicable and possible to do so, the entity shall maintain separate storage facilities for different classes of food (Johnson ; Wales University, 2010). Categories for storage area are dry storage, refrigerated storage, and frozen storage. Dry storage is for food that has a longer shelf life. While refrigerated storage and frozen storage are for food products needed to be stored at a lower temperature. Generally, dry storage areas are maintained at a temperature ranging between 65°F and 75°F. If the temperature of dry storage becomes lower than what is recommended, it can be harmful to food products. It is important that the dry storage space is sufficient to handle the size of the restaurant’s operations because cramped and cluttered dry storage areas usually increase the costs. This happens because inventories are not easily rotated, maintained, and counted. Another storage area is refrigerated storage. The temperature of this kind of storage area is generally maintained between 32°F (0°C) and 36°F (2°C). Lastly, freezer storage temperatures are maintained between 0°F and 10°F (18°C and 23°C) (Dopson et al., 2002).
Aside from considering its storage area, it is also essential to take into consideration the shelf life or the duration from which every food item is stored with due consideration of its perishability. The frequency with which these food products are purchased can be also influenced by its shelf life (Dopson & Hayes, 2016).
Table 1. Typical Shelf Life of Selected Food Items
Item Storage Area Shelf Life
Canned Vegetables Dry Storage 12 months
Flour Dry Storage 3 months
Potatoes Dry Storage 14-21 days
Sugar Dry Storage 3 months
Bacon Refrigerator 30 days
Butter Refrigerator 14 days
Ground Beef Refrigerator 2-3 days
Lettuce Refrigerator 3-5 days
Milk Refrigerator 5-7 days
Steaks Refrigerator 14 days
Tomatoes Refrigerator 5-7 days
Generally, the quality of the food product will deteriorate or become worse, the longer it is stored. A storeroom manager shall ensure the usage of the raw materials first stored before any new items to avoid spoilage. Authors of different books mentioned two methods of how should materials be taken out from the storage, namely, First-In-First-Out (FIFO) method and Last-In-Last-Out (LIFO) method. According to Keane (2017), most restaurants operate according to the first-in, first-out principle.
FIFO assumes that the goods received first are to be issued first. As a result, ending inventory consists of the most recent acquisitions. FIFO is the best choice for restaurants having materials with perishable nature. At restaurants, chefs will be using ingredients purchased first with the closest expiration date to avoid the occurrence of spoilage and to preserve ingredients’ freshness.
Another technique used to value inventory is the LIFO. It is not commonly practiced especially in the food service industry. It assumes that ingredients purchased recently should be requisitioned first resulting the ending inventory to be composed mostly of old ingredients purchased from an earlier date. Unutilized ingredients may become obsolete and subjected to wastage since older goods tend to be stored repeatedly with the risk of reaching its expiration date. However, the LIFO method may be applied with non-perishable items.
To summarize, an entity’s appropriate systems such as physical and written controls for storing and issuing materials ensures the protection of the entity’s investments in inventory. Physical controls commence from the time materials are transferred to the storeroom. On the other hand, written controls include the use of materials ledger card, the manual recording of the units of raw materials flowing through a warehouse. These precautionary measures are needed to avoid waste, damage, spoilage, theft, and obsolescence (Guerrero, 2014).
Having all the aforementioned theories and concepts serve as a theoretical foundation for this study, the researchers aim to identify the materials cost control practices of the selected restaurants in Tagbilaran City and hope to provide recommendations regarding inventory control through the finding of this research.
Statement of the Problem
This research aims to determine the materials cost control practices of selected restaurants in Tagbilaran, City, Bohol.
Specifically, this study will answer the following questions:
1. What are the inventory cost control practices of restaurants in raw materials in terms of:
b. Receiving; and
2. What raw material cost control practices do the restaurants employ to avoid:
b. Spoilage; and
3. Based on the findings, what recommendations could be suggested to management?
Significance of the Study
The study is conducted in order to identify the various materials cost control practices of selected restaurants in Tagbilaran City. Moreover, the findings generated in this study will not only fulfill the researchers’ purpose but it would also be of great help to the following:
Restaurant Owners. This study on materials cost control practices of restaurants provides useful data to the respondents themselves – the owners and managers of the restaurants, in order to provide them with insights on better practices which they could apply and integrate in their operations and would also be beneficial for them in terms of financial performance in the short run and maybe even in the long run.
Management of Similar Businesses. This study could provide awareness and may encourage owners and managers of other food businesses such as eateries to manage and control costs in their operations.
Researchers. This study enables the research team to apply theoretical concepts to the practical business world and will provide them with additional knowledge and a meaningful learning experience on material cost control.
Future Business Owners. For businessmen wishing to undertake a similar endeavor, this study can help them be aware of the significance of cost control in restaurants. This will give them insight to which practices they may apply that are cost-efficient without compromising product or service quality.
Future Researchers. This study will serve as a guide and reference for future studies involving similar concepts. This can also provide for data which they can use to compare their study.
Scope and Limitations of the Study
This study aims to determine the material cost control practices of restaurants. The respondents are limited only to restaurants situated in Tagbilaran City, Bohol. They will identify current cost control practices being applied and implemented pertaining only to the materials costs of such restaurants. The research does not intend to assess the effectiveness of these practices. The materials specified in this study pertain only to the raw materials and does not include materials such as tools and equipment.
The research will be conducted in the first semester of Academic Year 2018-2019. The success of this research depends on the cooperation of the respondents regarding the material cost control practices applied in their operation. Furthermore, the validity of the results heavily relies on the honesty of the respondents.
This study will utilize the descriptive research design. This method is a fact-finding study with adequate and accurate interpretations of the findings. It describes with emphasis what actually exists such as current practices. Since the study is concerned with the current raw material cost control practices of selected restaurants in Tagbilaran City, Bohol, the descriptive method is the most appropriate method to use. In the research process, necessary data will be gathered and collected through the use of questionnaires answered by the respondents.
The research will be conducted in the City of Tagbilaran, the capital of the Province of Bohol. A third class city belonging to the 2nd income classification per D.O 24-97, Tagbilaran City lies on the southwestern part of Bohol. It is bounded on its north by the town of Cortes, on its northeast side by the town of Corella, on its eastern side by the town of Baclayon and on its western and southwestern sides by 12.2 kilometers of coastline.
It comprises of 15 barangay (9 coastal, 6 inland) with a total municipal land area of 2,920 hectares. According to 2015 Census of Population, the total population of Tagbilaran City was 105,051 as of August 1, 2015.
Having a core advantage of being the main business capital and center of governance of the province of Bohol, the researchers choose Tagbilaran City. It is also the center of education and transportation. Major establishments existing in the city are shopping centers, hotels, restaurants, fast food centers, and banks.
The respondents of the research will be the managers or the person in charge of the operation involving the materials of the corresponding restaurants. The research participants are to be selected according to the researchers’ judgment which is purely based from the restaurant’s accessibility and background as to researchers’ subjective view.
For this study, the researchers will use a self-made questionnaire to gather data from athe respondents. The questionnaire will compose inquiries about the company profile and with emphasis on the material cost control practices that are being applied by the respondents.
Gathering of Data. The researchers will initially send a formal letter of request to the selected restaurants for them to participate in the conduct of the study and be provided with the information needed. The formal letter of request shall contain the signature of the researchers and an endorsement by the researchers’ adviser. The restaurants who will agree to take part in the study will be distributed a questionnaire at the convenience of both parties. The researchers will guide the respondents throughout answering each item in the research tool to ensure the accuracy of the responses. The questionnaires will be retrieved from all the respondents and then the researchers will consolidate and tabulate the results.
The data that will be gathered by the research team will be useful to get information to be used in examining the material cost control practices that are used by the selected restaurants in Tagbilaran City, Bohol. After these, the data that will be gathered by the research team will be recorded, tabulated, and analyzed. The data will be tallied to determine the frequency which will then be interpreted using the mode. The mode of a sample is the element that often occurs in the collection.
Adlington, R. (2016). Cost Control in Food & Beverage: How Technology Can Maximize Profits. Retrieved August 19, 2018, from Oracle: http://www.itbusinessbook.com/admin/downloadpdf.php?file=20805-506903_Cost%20Control%20in%20Food%20And%20Beverage%20How%20Technology.pdf
Ahmad, R., Radha, J., Ideris, M., & Zainol, N. (2017). Examining Food Wastage, Cash Handling and Cost Control Practices: The Case of Food and Beverage Outlets in Malaysia. International Journal of Business and Management 1 (2), 182-188.
Anderson, W., Barnett, M., Bensmiller, D., Chong, F., Christian, R., Clay, D., et al. (2012). Basic Kitchen and Food Service Management. BCCampus.
Annual Survey of Philippine Business and Industry (ASPBI). (2015). Retrieved August 18, 2018, from Philippine Statistics Authority: http://psa.gov.ph/content/2015-annual-survey-philippine-business-and-industry-aspbi-accommodation-and-food-service
Barwa, T. (2015, October). Inventory Control as an Effective Decision-Making Model and Implementations for Company’s Growth. International Journal of Economics, Finance and Management Sciences, 3(5), 465-472. Retrieved from http://article.sciencepublishinggroup.com/html/10.11648.j.ijefm.20150305.18.html
BC Cook Articulation Committee. (2012). Basic Kitchen and Food Service Management. British Columbia, Canada: B.C. Open Textbook Project. Retrieved from http://solr.bccampus.ca:8001/bcc/file/390f5e1a-8ec4-45cf-9caf-b692536add2d/1/Basic-Kitchen-and-Food-Service-Management-1446143180.pdf
Beltis, A. (2017, December 17). Restaurant Cost of Good Sold Calculator: How to Calculate COGS. Retrieved August 18, 2018, from Toast.com: https://pos.toasttab.com/blog/restaurant-cost-of-goods-sold
Bragg, S. (2018, June 30). Spoilage. Retrieved August 2019, 2018, from Accounting Tools: https://www.accountingtools.com/articles/2017/5/16/spoilage
Census of Philippine Business and Industry. (2012). Retrieved July 24, 2018, from Philippine Statistics Authority: http://psa.gov.ph/node/49112
Davis, B., Lockwood, A., Alcott, P., ; Pantelidis, I. S. (2008). Food and Beverage Control. In B. Davis, A. Lockwood, P. Alcott, ; I. S. Pantelidis, Food and Beverage Management (4th ed., pp. 259-316). Oxford, United Kingdom: Elsevier Ltd. Retrieved from https://nscpolteksby.ac.id/ebook/files/Ebook/Hospitality/Food%20and%20Beverage%20Management%20(2008)/Chapter%208%20-%20Food%20and%20Beverage%20Control.pdf
Department of Labor and Employment. (2012). Industry Career Guide: Hotel, Restaurant and Tourism. Manila.
Dittmer, P. R., ; Keefe III, J. (2009). Principles of Food, Beverage, and Labor Cost Control. Hoboken, New Jersey: John Wiley ; Sons, Inc.
Dizon, E. (2018, March 25). Food Crawl: All The Best Places To Eat in Bohol. Retrieved August 17, 2018, from Spot.ph: https://www.spot.ph/eatdrink/the-latest-eat-drink/73254/food-crawl-bohol-a00196-20180325-lfrm2
Food Spoilage. (2018). Retrieved August 19, 2018, from Wikipedia: https://en.wikipedia.org/wiki/Food_spoilage
Georgia Restaurant Association. (2014). Ten Ways to Improve Food Cost. Georgia Restaurant Association Food Cost Tool Box. Atlanta, Georgia. Retrieved from Georgia Restaurant Association: https://www.garestaurants.org/uploads/4/4/5/3/44535221/gra_food_cost_tool_box.pdf
Guerrero, P. P. (2014). Cost Accounting: Principles and Procedural Approach. Manila: GIC Enterprises ; Co., Inc.
Hellström, M. (2017, June 29). Raw material costs for the restaurant. Retrieved August 21, 2018, from startarestaurang: http://startarestaurang.se/ravarukostnader-for-restaurangen/?lang=en
Johnson and Wales University. (2010). Culinary Essentials. California, United States: The McGraw-Hill Companies, Inc. Retrieved from http://chefmccarthy.weebly.com/uploads/5/5/4/4/55444227/culinary_essentials.pdf
Keanne, N. (2017, August 8). Inventory Costing Methods for Restaurants: FIFO vs. LIFO vs. WAC. Retrieved August 18, 2018, from Toast: https://pos.toasttab.com/blog/restaurant-inventory-costing-methods
Kinney, M. A., Raiborn, C. A., ; Carter, W. K. (2012). Cost Accounting. New Tech Park Singapore: Cengage Learning Asia Pte Ltd.
Letchinger, C. (2017, July). Restaurant Cost Control – Part 1: A Nickel-and-Dime Business. Retrieved August 18, 2018, from Menu Cover Depot: https://www.menucoverdepot.com/resource-center/articles/restaurant-cost-control-part-1/
Miller, J. E., Hayes, D. K., ; Dopson, L. R. (2002). Food and Beverage Cost Control Second Edition. New York: John Wiley ; Sons Inc.
Muller, C. C. (2012, Fall). The Restaurant as Hybrid: Lean Manufacturer and Service Provider. Boston Hospitality Review, 1(1), 39-47. Retrieved from https://www.bu.edu/bhr/files/2012/11/v1n1-Restaurant-as-Hybrid.pdf
National Restaurant Association. (2013). Controlling Food Costs in Purchasing. In Controlling Foodservice Costs (pp. 115-141). New York: Pearson. Retrieved from https://www.pearsonhighered.com/assets/samplechapter/0/1/3/2/0132175274.pdf
Ojugo, C. (2010). Monthly Physical Inventory and Monthly Food Cost Calculation. In Practical Food and Beverage Cost Control (p. 221).
Philippine Food Industry. (2018). Retrieved August 17, 2018, from IFEX Philippines: http://www.ifexphilippines.com/en/General-Info/Philippine-Food-Industry
Pilferage. (2018). Retrieved August 21, 2018, from Cambridge English Dictionary: https://dictionary.cambridge.org/dictionary/english/pilferage
Putra, A., ; Gatot, Y. (2013). An Analysis of Inventory Management at MJS Restaurant, Jakarta. Journal of Business and Management.
Restaurant Inventory. (2016). Retrieved August 15, 2018, from Gourmet Marketing: https://www.gourmetmarketing.net/restaurant-essentials/restaurant-inventory/
Spears, M. C. (2000). Foodservice Organizations: A Managerial and Systems Approach 4th edition. New Jersey: Prentice-Hall, Inc.
Spillage. (2018). Retrieved August 19, 2018, from Wikipedia: https://en.wikipedia.org/wiki/Spillage
Spoilage and Spillage. (2015, May 19). Retrieved August 19, 2018, from E Travel Week: https://www.etravelweek.com/topics/spoilage-and-spillage
The Institute of Cost Accountants of India. (2012). Cost Accounting Standards Issued by Cost Accounting Standards Board (CASB). Retrieved June 30, 2018, from http://icmai.in/upload/Students/CAS-1-24-CASB.pdf
Tracey, J. B. (2009). The Eight-Step Approach to Controlling Food. Cornell Hospitality Tools, 12-29.
Walker, J. R. (2016). Restaurant Operations. In J. R. Walker, Exploring the Hospitality Industry (4th ed., pp. 129-148). New York, New York: Pearson Education, Inc. Retrieved from https://www.pearsonhighered.com/assets/samplechapter/0/1/3/4/013474506X.pdf
Webstaurant Store Food Service Equipment and Supply Company. (2018, June 06). Restaurant Inventory Management. Retrieved August 18, 2018, from Webstaurant Store: https://www.webstaurantstore.com/article/138/restaurant-inventory-management.html
Welcome to Bohol. (2018). Retrieved 5 2018, August, from Bohol Tourism: http://www.boholtourismph.com/
Kindly put a checkmark on the practices being employed by the restaurants.
1. We order the following food items from:
Food Item Prime vendor
(trusted or per contract) Various vendors depending on quoted price Nearest market
(local market) Malls or supermarket Local growers (farms) Grow (raise) our own
2. We order the following food items (frequency):
Food items Daily Weekly Monthly Other regular basis (e.g. every two days) As needed (just in time) Not applicable
3. The following food items are stored at (temperature):
Food Items Dry Storage
50°F to 70°F (10°C to 21°C) Refrigerated Storage at or below 41°F (5°C) Freezer
at or below 0°F (18°C)
4. The following food items are stored at (place):
Food Items Chiller Freezer Glass Jar Basket Cool Box Zip lock Bag
5. We authorize access to storage area to the following person/s?
Personnel Yes No Sometimes
6. We employ the following practices:
Practices Strongly Agree Agree Disagree Strongly disagree Never (Not applicable)
We always purchase fresh fruits and vegetables.
We always order fresh meat.
We always order fresh fish.
We buy condiments in bulk.
We buy spices in bulk.
We do daily inventory count of perishables and record quantities on hand.
We have monthly inventory taking.
We use purchase orders for daily purchases.
We use purchase orders for weekly purchases.
We use purchase orders for monthly purchases.
We use purchase orders for bulk purchases.
We base purchase orders on an order guide.
We use leftovers of daily purchases first the next day
We throw spoiled products into separate trash bags
We buy food products immediately when stock out occurs
We establish regular buying quantities for perishables
We purchase products in quantities based on normal usage
We purchase in bulk to avail discount
We avail of credit terms of our vendors
We have our meats pre-cut or pre-trimmed according to specifications
We have our fish deboned or pre-sliced
We purchase because our stock is at its minimum level
We use standardized recipes when setting the purchase quantity
We record quantities on order before goods are received
We use first in, first out system in issuing goods out of storage area.
We use last in, first out system in issuing goods out of storage area.
7. We make sure quality of products received is as specified.
( ) Always
( ) Often
( ) Sometimes
( ) Never
If quality of products received is not as specified, we:
( ) Return items and ask for refund
( ) Return items and ask for replacement
( ) Accept the product delivered
( ) Dispose the items directly
( ) Others __________________
8. We make sure prices are as quoted.
( ) Always
( ) Often
( ) Sometimes
( ) Never
If prices are not as quoted, we
( ) Accept the price billed
( ) Negotiate the price
( ) Pursue the original price
( ) Others __________________
9. We make sure quantity of products received is as specified.
( ) Always
( ) Often
( ) Sometimes
( ) Never
If quantity of products received is not as specified, we:
( ) Accept the excess quantity delivered for later use
( ) Reject the excess quantity delivered
( ) Settle with the quantity delivered even if less than the quantity ordered
( ) Demand for the lacking quantity
( ) Others ______________
Number of years of operation:
Position of Respondent: