What the exam looks like

• About 30 points of multiple choice, true/false and matching. These mostly test concepts from Lectures 12–16 and 21.
• About 20 points of open-ended math problems. These test recipe costing (Lectures 17–18) and menu pricing (Lectures 19–20).
• Readings are tested only at the level of detail covered in class.

Deadlines this week

How to study, in order

1. Menu pricing math. Learn the factor, prime cost and modified actual cost methods, then proportional vs. semi-proportional cost allocation. Start with the Menu pricing guide.
2. Recipe costing math. Practice unit conversions, yields (APQ = EPQ ÷ yield %), Q-factors, portion cost and food cost %. Start with the Recipe costing guide.
3. Work every practice problem on paper with a basic calculator before you look at the answers.
4. Read each lecture page and take its quiz. A green score in the sidebar means you've finished that quiz.
5. Finish with the mixed quiz the night before.

Every lecture on the exam

À la carte vs. prix fixe

• À la carte: each item is priced and ordered separately.
• Table d'hôte (prix fixe): a multiple-course meal with limited choice at one fixed price.
• The menu communicates the operation's philosophy to the guest. Burger King: "quality food, served quickly, in attractive, clean surroundings." Thomas Keller: "One guest at a time."

Menus by segment

Each segment designs its menu around what its guests want.

Menu labeling

• ACA Section 4205 (2010): chains with 20 or more locations must post calories for standard menu items. Other nutrition info must be available in writing on request.
• Cawley, Susskind & Willage (2018): labels cut calories ordered by 3.0%, in appetizers and entrées but not drinks or desserts. Seeing the labels raised support for labeling laws by 9.6%.

Onsite foodservice

• Healthcare: the challenge is making patients feel they're eating there by choice. Menus are regular/house, special/modified (ordered by a physician), or consistency-modified (liquid, puréed).
  • Selective-cycle menu: planned for a period (a week, a month), then repeated, with limited choices.
  • Restaurant-style menu: like room service. The patient calls to order from the same menu every day.
• K–12 schools: highly regulated. The National School Lunch Program is federally assisted, and meals must meet federal nutrition rules.
• Colleges: no regulation beyond normal restaurant rules. Wide variety, a focus on dietary restrictions, eco-friendly practices.
• Turnwall et al. (2019): taste-focused vegetable labels raised selection 29% over health-focused labels and 14% over basic labels.

Sustainability

• Source from renewable sources; buy local, seasonal and organic produce
• Build relationships with suppliers, and consider carbon footprint
• Market the menu accordingly (e.g., Monterey Bay Aquarium Seafood Watch)

The menu planning process

1. Menu planning: identify inputs, then the menu philosophy and categories, then the items in each category. Balance food, preparation, cost/price and organoleptic (taste, texture, look) variety.
2. Menu development: recipe R&D, calculate costs, set prices.
3. Menu design: design the menu card (gaze-motion studies, menu psychology).
4. Menu analysis: margin analysis and menu engineering.

Planning inputs: the guests; production and service capabilities (building, staff skills, equipment); the value chain (distributors, seasonality); and financial targets (COGS, recipe costing, waste).

How many choices?

• Guests often prefer fewer choices: the decision is easier, satisfaction is higher, and food costs fall.
• Johns & Hartwell (2013) surveyed 442 participants. For fine dining, about 5–7 choices per category felt "about right." For limited service, about 6–7 per category.

Ambiance levers

• Sound: volume and tempo control the pace of service
• Light: changing the intensity controls table turns
• Visuals: color and design attract and stimulate guests
• Furniture: attractive, but not too comfortable
• Scent: good smells please people waiting in line

Memory effects

• Serial position effect (primacy and recency): people remember the first and last items in a list best.
• Von Restorff effect: the item that stands out from the rest is the one remembered.

Does menu design actually sell? The four studies

Reach vs. frequency

A marketing executive is accountable for customer traffic and sales. Traffic comes from two places:

• 62% of restaurant sales come from returning guests, but 70% of customers visited only once in the past 6 months. The lesson: build a genuine connection.
• Why customers come back: great service (more important than the food), great food (quality and consistency), cleanliness, the place becoming part of their identity, and a genuine connection.

Market segmentation

• Demographic: who are they?
• Psychographic: what are their attitudes and aspirations?
• Behavioral: what do they do?
• One-to-one: what individual personal information (PII) do we have?

Why restaurant marketing is unique

• Franchising funds growth.
• High frequency: people eat several times a day.
• Geospatial: target customers are nearby.
• Predictable purchase cycle: you can know what customers eat and when.

The US chain industry was built on TV advertising, which made a local business too centralized. Social and mobile media are now disrupting that model.

Media measurement

• TV and radio: gross rating points (GRP) and targeted rating points (TRP), from Nielsen samples. It's hard to tie sales to a specific ad.
• Print, online and outdoor: impressions, clicks, redemptions.

Reaching new customers

1. Target accurately
2. Innovate the product or service (e.g., Burger King's Impossible Whopper)
3. Manage online reputation: keep info consistent and respond to feedback
4. Reach new guests through existing guests

Producing the right amount

Making too much raises COGS and fills storage. Making too little disappoints customers and loses revenue.

• Example (mine, not from class): an item sells for $6.00, costs $1.50, and has no salvage value. Cu = $4.50, Co = $1.50, so CR = 4.50 ÷ 6.00 = 75%. Make more.

Weaknesses of the method

• Ignores labor cost
• Needs more than 60 days of historical and forecasted demand
• Doesn't count the true cost of an unhappy customer (lost future visits, bad word of mouth)
• Ignores shelf life, prep time, and substitution

Menu prep vs. station prep

The goal of prep and production management is to make as much of each dish in advance as possible without hurting quality.

To find the parts of a dish you can prep separately, look for sub-recipes, groups of ingredients, shelf-life cues ("can be made ahead," "marinate overnight"), and past-tense verbs ("chopped," "cooked").

Assigning menu items to stations

• Menu factors: the item's components, the cooking techniques, and what's prepped ahead vs. cooked to order (à la minute)
• Structural factors: each station's capacity, the attendants' skills, expected sales volume, and whether there's a dedicated prep team
• Example, steak frites: steak goes to the grill station, fries to the fry station, haricots verts to the sauté station.

Final production steps

1. Order in: the expeditor calls the order to the stations.
2. Fire: the expeditor tells the stations to start cooking.
3. Plate: the station plates, or passes the item along to be plated.
4. Inspect and garnish: the expeditor checks and finishes each plate.
5. Service: front-of-house staff take it to the guest.

What counts as new product development

• A product the company has never made before, or
• An existing product presented or rebranded in a new form, package or label.

What drives NPD: consumer demand and trends; new technology; competition and the economy; regulation, the environment and society; and the product life cycle (development → introduction → growth → maturity → decline).

Limited time offers (LTOs)

• Boost sales and give a competitive edge
• Let suppliers test new products and concepts
• LTO buyers visit more often and are more valuable customers
• Spark sales before the end of a quarter, or test an item without a permanent menu commitment. If it flops, it disappears. If it's a hit, it can replace a slow seller.

The NPD process

Five stages. After each one, a gate decides go/no-go, or whether to set the idea aside or kill it. The process isn't strictly linear: teams can loop back.

Strategic vs. tactical considerations

Example from class, the Impossible Whopper. Strategic: tastes as good as beef, fits the flexitarian trend, less saturated fat, smaller carbon footprint. Tactical: a premium price, a steady patty supply, separate handling to avoid cross-contact, grill space.

Food trends

From the Datassential Menu Adoption Cycle. These slides were mostly images, so check the deck for exact wording.

1. Inception: appears in fine dining and ethnic independent restaurants
2. Adoption: spreads to casual independents and specialty grocers
3. Proliferation: chains adapt it for mainstream menus
4. Ubiquity: it's everywhere: quick service, grocery, family dining

Key terms

• AP (as purchased): the item the way you buy it. APQ = as-purchased quantity.
• EP (edible portion): the item after trimming or peeling. EPQ = edible portion quantity.
• Yield % = EPQ ÷ APQ. Trim loss = APQ − EPQ.

• 25 lb of carrots trims down to 20.9 lb. Yield = 20.9 ÷ 25 = 83.6%. Trim loss = 4.1 lb.
• To end up with 50 lb of peeled carrots, buy 50 ÷ 0.836 = 59.81 lb.

Q-factor (wrap cost)

A fixed amount or percentage added to a recipe's cost. It covers costs that go with the recipe but aren't controlled by it:

• Free items served with the meal (bread, amuse-bouche, side dishes)
• Condiments or garnishes the guest adds
• Paper goods and containers not meant for carry-out
• Small "to taste" items (salt, pepper)

• Recipe ingredients cost $590.40. With a 3% Q-factor, the total is 590.40 × 1.03 = $608.11.

Dimensional analysis

Multiply by conversion fractions until the units you don't want cancel out.

• 0.0625 gal × (4 qt / 1 gal) × (2 pt / 1 qt) × (2 C / 1 pt) = 1 C
• 4.5 C flour × (1 lb / 3.48 C) × (16 oz / 1 lb) = 20.69 oz

What affects yields

• How the product will be used
• Its quality and condition
• Its size
• The skill and care of the person preparing it
• The equipment used

Yield estimates come from the Book of Yields, culinary texts, or online, but you should confirm them with your own tests.

The template, column by column

1. Standardized recipe: the ingredient, quantity and unit the recipe calls for.
2. Purchasing guide details: what you pay (AP cost) and how much you get (AP quantity and unit).
3. Recipe converted to AP units: the recipe quantity rewritten in the unit you buy in.
4. Yield %: 100% if you use it the way you bought it. Otherwise, the tested yield.
5. Purchase quantity (APQ): converted quantity ÷ yield %.
6. Purchase cost: APQ × (AP cost ÷ AP quantity).

Then the financial summary

• Recipe cost = sum of all purchase costs
• Total cost = recipe cost + Q-factor
• Portion cost = total cost ÷ number of portions
• Food cost % = portion cost ÷ selling price, or selling price = portion cost ÷ target food cost %

Why cost recipes systematically

• Costings are easy to maintain and update
• It takes the guesswork out of product costs and menu pricing
• Culinary administration becomes more efficient and effective
• Every costing system, simple or complex, relies on data inputs, defined relationships, and standard procedures

What to consider when pricing

• Price elasticity of demand
• How guests perceive value
• Competition
• How the menu, prices and sales volume affect each other
• Costs and profit
• Pricing and contribution margins

The pricing approaches

Non-structured pricing just asks "what will the market bear?" The three structured methods:

Cost allocation

The worked in-class example is on the Menu pricing guide.

Vyba Vive: high or low price?

The sample problem, step by step

Food sales $500,000. Food cost 35%. Labor = $100,000 + 5% of sales. Variable costs 15%. Other fixed costs $50,000. Occupancy $22,500. Covers: 50,000. The item's food cost is $3.15.

• Factor price at 35%: 3.15 ÷ 0.35 = $9.00
• Proportional allocation at $9.00: labor 25% = $2.25 · variable 15% = $1.35 · fixed 10% = $0.90 · occupancy 4.5% = $0.405 · profit = $0.945 (10.5%)
• Fixed costs per cover: labor 100,000 ÷ 50,000 = $2.00 · other fixed 50,000 ÷ 50,000 = $1.00 · occupancy 22,500 ÷ 50,000 = $0.45
• MAC price at 12% profit: (3.15 + 2.00 + 1.00 + 0.45) ÷ (1 − (0.15 + 0.05 + 0.12)) = 6.60 ÷ 0.68 = $9.71
• Semi-proportional allocation at $9.71: labor = 2.00 + 5% × 9.71 = $2.49 · variable = 15% × 9.71 = $1.46 · fixed $1.00 · occupancy $0.45 · profit = $1.16 (12%)

Supply chain issues

A supply chain is "the sequence of processes involved in the production and distribution of a commodity." Common problems:

• Economic: shortages and inflation
• Food safety: contaminated ingredients, improper handling, no traceability, adulteration
• Sustainability: environmental harm, transportation, packaging, waste
• Labor: unsafe conditions, child labor, exploitation

Who is responsible?

1. Identify the harm: physical, economic, social, or societal.
2. Decide the degree of responsibility: culpability (you caused it), complicity (from doing nothing to actively helping), capability (you have the power to fix it).

Example, the Fair Food Program: McDonald's joined and paid a small premium for tomatoes from farms that treat workers fairly. Wendy's refused, moved its sourcing, and faced a national boycott from the Coalition of Immokalee Workers.

Four ways a business can respond

Transparency and blockchain

• Why transparency matters: rising foodborne illness, accountability for what you advertise, customer demand, readily available technology, quality assurance, anticipating risk.
• Takeaways: supply chains are complex. Simple doesn't mean safe. Customers want transparency. Blockchain can reduce risk by making products traceable.

The five distribution arrangements

Purchasing

Purchasing means getting the right product, quality, price, time and source. In small restaurants the chef or sous chef does it; large restaurants and hotels have a purchasing department.

Product specifications: these slides were mostly images. A spec describes exactly what you're buying, so every vendor quotes the same thing. Typical details: product name, intended use, grade, size/count/weight, packaging, form (whole, peeled, diced), brand or origin, and delivery temperature.

Invoice receiving

1. Compare the driver's invoice to your purchase order at the dock.
2. Check price and quantity. Weigh items: always use a scale.
3. Check quality against your specs and grades.
4. Check condition: dates, tags, packaging, temperatures.
5. Have the driver initial any discrepancies and sign once credit memos are done.
6. Tell the kitchen about shortages. Date, label and store everything right away. Send the invoice to accounting.

The four scenarios

Formulas

The flow chart, step by step

1. Pick the inventory item that matches the ingredient.
2. If the recipe's unit isn't the purchase unit, convert it. Then find the AP cost per unit.
3. If the recipe needs a different form than you bought, find the yield % and calculate APQ = EPQ ÷ yield %.
4. Ingredient cost = APQ × AP cost per unit.
5. Add up all the ingredient costs to get the recipe subtotal.
6. Add the Q-factor if there is one. That's the total recipe cost.
7. Portion cost = total recipe cost ÷ number of portions.
8. If you know the price, food cost % = portion cost ÷ price. If you don't, price = portion cost ÷ target food cost %.

Unit conversions

Converting volume to weight always needs a product-specific number (e.g., 1 C of diced onion = 3.9 oz). The exam gives you these.

Worked example: carrot soup

From Lectures 17–18. Makes 4 portions of 12 fl oz each.

The three formulas

In-class example (Lecture 19)

Food cost $4.00. Per cover: labor $4.48 (all fixed), other fixed $1.03, occupancy $1.38. Food cost 32%, labor 26%, variable 18%, profit 10.1%.

• Factor: 4.00 ÷ 0.32 = $12.50
• Prime cost: (4.00 + 4.48) ÷ (0.32 + 0.26) = 8.48 ÷ 0.58 = $14.62
• MAC: (4.00 + 4.48 + 1.03 + 1.38) ÷ (1 − (0.18 + 0.101)) = 10.89 ÷ 0.719 = $15.14

Proportional: every line = price × its %. Semi-proportional: fixed lines stay the same dollar amount per cover, and variable lines = price × %.

Recipe costing

Menu pricing

Production

By lecture