OHT 7.1 The effect of price and volume on revenue Table 7.1.
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Transcript of OHT 7.1 The effect of price and volume on revenue Table 7.1.
![Page 1: OHT 7.1 The effect of price and volume on revenue Table 7.1.](https://reader036.fdocuments.us/reader036/viewer/2022070400/56649f0e5503460f94c22ff5/html5/thumbnails/1.jpg)
OHT 7.1
The effect of price and volume on revenue
Table 7.1
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OHT 7.2
Key points of revenue appraisal
Revenue is product of price and volume Appraisal needs to take account of changes in
both price and volume Averages not always accurate and prone to
misinterpretation Allow for inflation and/or price rises Need to compare like with like Incorporate 12-month rolling totals to determine
true trends and performance Revenue cannot be fully appraised by itself
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OHT 7.3
Calculation of change in costs and revenues
Table 7.2
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OHT 7.4
Examples of cost percentages for
foodservice operations
Table 7.3
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OHT 7.5
Key points of cost appraisal Structures vary, and change over time Can be measured in cash or percentages Proportional relationship between costs Relationship between costs and inflation Cross-sectional and time-series analyses useful Incorporate 12-month rolling totals to determine true
trends and performance Operators with the lowest costs perceived as having a
key advantage Allocating indirect costs more complex than direct
costs
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OHT 7.6
Example profit and loss account
Table 7.4
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OHT 7.7
Comparison of gross profits
Table 7.5
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OHT 7.8
Comparison of operating profits
Table 7.6
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OHT 7.9
Yield comparisons
Table 7.7
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OHT 7.10
Relationship between revenue, costs and profits in
foodservice operations
Figure 7.1
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OHT 7.11
Comparison of GP in relation to revenue
Table 7.8
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OHT 7.12
Comparison of GP and GP %
Table 7.9
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OHT 7.13
Sales mix example
Table 7.10
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OHT 7.14
Effect of changed sales mix
Table 7.11
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OHT 7.15
Sales mix example (beverages)
Table 7.12
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OHT 7.16
Example of profitability calculations
Table 7.13
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OHT 7.17
Example of popularity and profitability ranking
Table 7.14
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OHT 7.18
Menu engineering matrix
Figure 7.2Adapted from Kasavana and Smith 1999
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OHT 7.19
Comparison of net operating profit measures
Table 7.15
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OHT 7.20
Key points of profit appraisal
Be clear how profit measures are contrived Compare like with like Appraise against objectives to give value Setting objectives includes subjective judgements Sales mix analysis determines real trends Profit percentages measure efficiency, not profitability Percentages allow for comparison only, cash contribution
is what is being sought Comparison with industry norms can be useful Use rolling 12-month totals to determine true trends and
performance Take account of stakeholders’ priorities
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OHT 7.21
Customer importance/operation achievement matrix
Figure 7.3
Achievement by operation
Imp
ort
ance
to
cu
sto
mer
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OHT 7.22
Customer importance/operation
capability matrix
Figure 7.4
Ability of operation
Imp
ort
ance
to
cu
sto
mer
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OHT 7.23
Customer importance/staff importance matrix
Figure 7.5
Importance to staff
Imp
ort
ance
to
cu
sto
mer
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OHT 7.24
The three levels of strategy and the relationship between
them
Figure 7.7
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OHT 7.25
SWOT matrix
Strengths Weaknesses
List of strengths
List of weaknesses
Opportunities
List of opportunities
1
Strengths to make use of opportunities
2
Weaknesses which prevent exploitation of opportunities
Threats
List of threats
3
Strengths to counter threats
4
Weaknesses which prevent countering threats
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OHT 7.26
Eight possible strategic routes for foodservices operations
Figure 7.9Adapted from Johnson and Scholes 1999
Cost to the customer
Pe
rce
ive
da
dd
ed
va
l ue
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OHT 7.27
Ansoff’s growth matrix with alternative
strategies/directions
Figure 7.11
Products
Ma
rke
ts
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OHT 7.28
Strategic means and assessing options
Strategic means Internal development Mergers and acquisitions Joint development
Assessing options Suitability Feasibility Acceptability