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Menu Engineering

1) To calculate market mix percentage for an item, take the number of that item sold divided by the total items sold, and multiply by 100. 2) To measure popularity, take the average market mix percentage and multiply by 70%. If an item's percentage is below this, its popularity is low. 3) To calculate cost margin, take the selling price minus the cost price for an item or total items. Total cost margin is the sum of (selling price x items sold) - (cost price x items sold). 4) To measure profitability, take the total cost margin for an item and divide by the total number of items. If an item's margin is above this average, its

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Anel Badenhorst
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© Attribution Non-Commercial (BY-NC)
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Download as PPT, PDF, TXT or read online on Scribd
369 views

Menu Engineering

1) To calculate market mix percentage for an item, take the number of that item sold divided by the total items sold, and multiply by 100. 2) To measure popularity, take the average market mix percentage and multiply by 70%. If an item's percentage is below this, its popularity is low. 3) To calculate cost margin, take the selling price minus the cost price for an item or total items. Total cost margin is the sum of (selling price x items sold) - (cost price x items sold). 4) To measure profitability, take the total cost margin for an item and divide by the total number of items. If an item's margin is above this average, its

Uploaded by

Anel Badenhorst
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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MENU ENGINEERING 2

How to calculate Market Mix %


How to measure High/Low Popularity
How to calculate item CM and total CM
How to measure High/Low Profit
IF function
Menu engineering quadrant
MARKET MIX %
Number sold:

Item A – 24
Item B – 32
Item C – 20

TOTAL NO MENU ITEMS: 3 (use count


function)

TOTAL ITEMS SOLD: 76

What is the Market Mix % for Item A?


Market Mix % for Item A
= Number of Item A sold
Total number of items sold

= 24 x 100
76 1

= 31.58%
Measuring Popularity
Count number of items on the menu
E.g. number of items = 3
Calculate average MM% for each item’s share of
the menu

e.g. Average MM% = 100


No. of menu items
Average MM% = ?

What do you multiply the average MM% by to get


your popularity measure ?
Measuring Popularity
- multiply by 70%

Therefore popularity measure = 33.33 x 70%


= 23.33

If MM% < 23.33 then Popularity is LOW


If MM% > 23.33 then Popularity is HIGH
Calculating CM

How do you calculate Item CM???

How do you calculate total CM???


Calculating CM
Item CM = item SP – item CP

Total CM = (item SP x no. items sold) –


(item CP x no. items sold)

Item A SP = R100.00 No. Item A sold = 24


Item A CP = R40.00
Item B SP = R80.00
Item B CP = R35.00 No. Item B sold = 32
Item C SP = R130.00
Item C CP = R50.00

No Item C sold = 20

What is the total CM for each item and


the total CM for the entire menu?
Measuring Profitability
Work out total CM per item
A = R1440
B = R1440
C = R1600
R4480

How do we measure whether CM is LOW


or HIGH?
Measuring Profitability
TOTAL ITEM CM
TOTAL NO. OF ITEMS

 Average Item CM = R185


3
= R61.66

 if total item CM > R61.66


Then the CM category is HIGH (High profitability)

What is a Star, Plowhorse, Puzzle, Dog?


STAR PUZZLE

PLOWHORSE DOG

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