BEVERAGE COST CONTROL

Problem Analysis You are the new Bar & Beverage Manager of this multi-units food and beverage operation in a Luxury Resort located on a Thai island. After your first morning brief with all Heads of Departments, the Cost Controller, Mr Prasaert, approaches you with the attached Beverage Cost and Sales Report. He tells you that the beverage cost is an issue in your department: As he puts it: … “the beverage cost is way over company standards…”. Mr Prasaert advises you to investigate what may be the causes of this high cost, which has always been an issue at this property. It has become clear to you that solving this problem would secure an “early win”, and set you up for further career advancement...

YOUR JOB:

Read carefully the Beverage Cost and Sales report and familiarize yourself with it. Use the Problem Analysis approach to look for the causes of the problem. Considering the limited information provided to you at this time, propose some directions to

further investigate this issue.

Description the different Food and Beverage Outlets Dining on The Rock: This is the signature restaurant of

this Hotel enjoying great reputation. This open-air restaurant has seven decks, and is only open for dinner. It offers upscale innovative cuisine with an extensive list of over three hundred wines, priced very moderately compared to local competitors of the luxury market. Drink on the Rock: This bar is mainly the service bar of Dining on The Rock restaurant.

Drink on the Hill: This is the main bar of the Hotel. Open all day, it is usually busier after 5:30pm, when guests sit around and enjoy before-dinner cocktails, watching the sunset. This bar is also the service bar of the 3-meal a day restaurant offering a great selection of international cuisine. The restaurant is full for breakfast and is doing well at night. Lunch is usually quiet.

Drink by the Pool: This pool bar is open from 10:00 am to 18:00 pm and services the pool area. The drink list includes beers, sodas and frozen drinks Drink on the Beach: This is a small beach bar located on a small semi-private beach. Open mainly during the day to a few guests. The drink list includes beers, sodas and frozen cocktails.

In-Villa Dining: This hotel has 66 villas; each equipped with a private pool and a terrace with a view. Guest can order food from any menu they like. Mini-Bars: Classic but upscale Mini-Bars. For practical purposes, it is managed by the Housekeeping department. Revenues are allocated to the food and beverage department.

SILA EVASON HIDEAWAY & SPA AT SAMUI DAILY BEVERAGE SALES & COST REPORT 30/11/2006CC: GM,RM,DO F&B, FC , EXEC.CHEF

TODAY'S SALE TODAY'S COSTOUTLET WINE BEER SPIRIT SOFT.DR. OTHER TOTAL WINE BEER SPIRIT SOFT.DR. OTHER TOTAL

DINNING ON HILL 5,325.00 450.00 180.00 950.00 (75.00) 6,830.00 1,987.50 65.34 36.00 155.16 2,244.00 DRINK ON HILL 600.00 2,140.00 2,800.00 (960.00) 4,580.00 93.44 312.58 419.77 825.79 DININING ON ROC 8,000.00 900.00 2,020.00 3,590.00 14,510.00 2,985.00 135.42 416.32 956.15 4,492.89 DRINK ON ROCK - - DRINK BY POOL 120.00 120.00 5.40 5.40 DRINK ON BEACH 720.00 720.00 60.44 60.44 IN VILLA DINING - - MINIBAR 1,250.00 630.00 820.00 2,700.00 550.00 99.28 125.55 774.83

- - - - - -

TOTAL 14,575.00 2,580.00 5,060.00 8,280.00 (1,035.00) 29,460.00 5,522.50 393.48 825.34 1,662.03 - 8,403.35

SALES MONTH TO DATE COST MONTH TO DATEOUTLET WINE BEER SPIRIT SOFT.DR. OTHER TOTAL WINE BEER SPIRIT SOFT.DR. OTHER TOTAL

DINNING ON HILL 285,443.00 38,230.00 23,630.00 72,580.00 (17,462.00) 402,421.00 101,796.97 6,553.27 3,436.54 10,712.92 - 122,499.70 DRINK ON HILL 58,030.00 28,340.00 102,560.00 50,335.00 (13,380.00) 225,885.00 17,304.77 5,642.78 15,621.37 7,951.53 - 46,520.45 DININING ON ROC 719,255.00 18,000.00 39,740.00 144,300.00 (4,919.50) 916,375.50 280,366.88 3,078.68 7,699.06 34,002.64 - 325,147.26 DRINK ON ROCK - - - - - - - - - - - - DRINK BY POOL 11,680.00 5,798.00 10,510.00 33,345.00 (2,345.00) 58,988.00 4,515.50 1,171.65 1,802.77 5,501.94 - 12,991.86 DRINK ON BEACH - 9,360.00 10,760.00 8,280.00 (84.00) 28,316.00 - 2,783.95 1,290.15 1,329.40 - 5,403.50 IN VILLA DINING 85,150.00 8,000.00 3,140.00 15,490.00 (1,574.00) 110,206.00 28,940.20 2,171.00 606.37 2,475.25 - 34,192.82 MINIBAR 11,650.00 38,390.00 6,020.00 39,920.00 - 151,930.00 5,380.00 9,753.56 2,094.63 8,275.86 - 50,684.05

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TOTAL 1,171,208.00 146,118.00 196,360.00 364,250.00 (39,764.50) 1,894,121.50 438,304.32 31,154.89 32,550.89 70,249.54 - 597,439.64 SALE W/OUT WINE 722,913.50 COST W/OUT WINE 159,135.32

TODAY'S COST PERCENT TODAY'S RATIO OF SALEOUTLET WINE BEER SPIRIT SOFT.DR. OTHER TOTAL WINE BEER SPIRIT SOFT.DR. OTHER TOTAL

DINNING ON HILL 37.32% 14.52% 20.00% 16.33% 0.00% 32.86% 77.96% 6.59% 2.64% 13.91% -1.10% 100.00%DRINK ON HILL 0.00% 15.57% 14.61% 14.99% 0.00% 18.03% 0.00% 13.10% 46.72% 61.14% -20.96% 100.00%DININING ON ROC 37.31% 15.05% 20.61% 26.63% 0.00% 30.96% 55.13% 6.20% 13.92% 24.74% 0.00% 100.00%DRINK ON ROCK 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%DRINK BY POOL 0.00% 0.00% 0.00% 4.50% 0.00% 4.50% 0.00% 0.00% 0.00% 100.00% 0.00% 100.00%DRINK ON BEACH 0.00% 0.00% 8.39% 0.00% 0.00% 8.39% 0.00% 0.00% 100.00% 0.00% 0.00% 100.00%IN VILLA DINING 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%MINIBAR 44.00% 15.76% 0.00% 15.31% 0.00% 28.70% 46.30% 23.33% 0.00% 30.37% 0.00% 100.00%

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

TOTAL 37.89% 15.25% 16.31% 20.07% 0.00% 28.52% 49.47% 8.76% 17.18% 28.11% -3.51% 100.00%

MONTH TO DATE COST PERCENTAGE RATIO OF SALE MONTH TO DATEOUTLET WINE BEER SPIRIT SOFT.DR. OTHER TOTAL WINE BEER SPIRIT SOFT.DR. OTHER TOTAL

DINNING ON HILL 35.66% 17.14% 14.54% 14.76% 0.00% 30.44% 70.93% 9.50% 5.87% 18.04% -4.34% 100.00%DRINK ON HILL 29.82% 19.91% 15.23% 15.80% 0.00% 20.59% 25.69% 12.55% 45.40% 22.28% -5.92% 100.00%DININING ON ROC 38.98% 17.10% 19.37% 23.56% 0.00% 35.48% 78.49% 1.96% 4.34% 15.75% -0.54% 100.00%DRINK ON ROCK 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%DRINK BY POOL 38.66% 20.21% 17.15% 16.50% 0.00% 22.02% 19.80% 9.83% 17.82% 56.53% -3.98% 100.00%DRINK ON BEACH 0.00% 29.74% 11.99% 16.06% 0.00% 19.08% 0.00% 33.06% 38.00% 29.24% -0.30% 100.00%IN VILLA DINING 33.99% 27.14% 19.31% 15.98% 0.00% 31.03% 77.26% 7.26% 2.85% 14.06% -1.43% 100.00%MINIBAR 46.18% 25.41% 34.79% 20.73% 0.00% 33.36% 7.67% 25.27% 3.96% 26.28% 0.00% 100.00%

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

TOTAL 37.42% 21.32% 16.58% 19.29% 0.00% 31.54% 61.83% 7.71% 10.37% 19.23% -2.10% 100.00%

Prepared by COST% W/OUT : 22.01% Approved byWINE Cost ControllerCost Officer