Physical Inventory Control and Food Cost Percentage

Understanding how your inventory and food cost are related is exceptionally important. Today most large operations have the luxury of technology however smaller operations and those that have not adopted technology keep a ‘manual’ daily, weekly, or monthly food cost analysis. Many with technology also still do manual food stock takes of inventory each month to check their stock holding and food cost percentage to identify any variances.

Let’s explain how this can be done.

The formula works as follows:

A very simple spreadsheet can be drawn up in Excel (or manually) to calculate the daily, weekly, and monthly food cost:

If your food cost increases above the forecasted, desired food cost then you will soon become aware that you need to look at why there is a variance.

Reflection

How do you think inventory control could (or does) assist you managing costs in your restaurant? Please share this in the comments below.