APK09 – MANAGE FINANCE

OPERATION
Menu Engineering

Pertemuan ke 15 dan 16
 Diadopsi dari sumber :

No Judul Pengarang Penerbit Edisi Kota Tahun Jenis

Accounting Essentials for Taylor and
1 Hospitality Manager Guilding, Chris Francis Ltd 3 London 2014 Utama
Jagels, Martin G.
Hospitality Management Dan Coltman, New
2 Accounting Michael M Wiley 9 Jersey 2006 Utama
 Sub-CPMK
• Mahasiswa mampu menganalisa menu yang diukur melalui
menu engineering (C3, A3)

Materi
1. Pricing Menu Items
2. Menu Engineering Worksheet
3. Menu Classification
4. Recap of Menu Engineering
1. Pricing Menu Items
 1.1. Pricing Meals
• Beside cost plus and cost percentage we could pricing a meals based on
bottom up aprroach. Means we calculate how many profit we desired
then we calculate how much revenue we need to gain!
• As we know in Restaurant income statement looks like below:
Food Revenue Rp. 300.000.000
Beverage Revenue Rp. 200.000.000 +
Total Revenue Rp. 500.000.000
Cost of Food Sold Rp. 125.000.000
Controllable Expenses Rp. 75.000.000
Fixed Charge Rp. 150.000.000 -
IBIT Rp. 150.000.000
Income Tax Rp. 50.000.000 -
Net Profit Rp. 100.000.000
 1.2. Steps For Determining The Average Meal
Price At Restaurant
• Determine desired net income by multiplying investment
by desired ROI
• Determine pre-tax profit by dividing the desired net
income by 1 minus income tax profit
• Determine fixed charges and controllable expenses
• Determine food revenue
• Determine meals to be served or total guest by
multiplying days open by number of seat turn over for
the day
• Average Meal Price = total food revenue/total guest
 1.2.1. Data to Calculate Average Pricing
Meals
To know how much price we need to set up in restaurant, we need to calculate, how
much profit we need to gain? How much the suitable price for restaurant offer to
guest for each menu? All of those data could be calculate by using below
information!
• Owner investment: • Controllable
$200.000 Expenses:
• ROI: 12% $500.000
• Funds borrowed: • Cost of Food Sold:
$500.000 40%
• Interest Rate= • Seat Turn Over :2x
10% • Days open= 313
• Tax Rate=30% • Seat capacity= 100
• Fixed Charge=
$100.000
 1.2.2. How To Calculate Average Pricing
Meals to Achieve the Profit wanted?

• Desired net income (Invest x ROI%) = $ 84.000

• Pre tax Profit = $84.000/(1-0.3)= $ 120.000
• Interest Rate = $ 500.000x 10%= $ 50.000
• Other Fixed charged+controllable expenses= $ 600.000
• Total expenses&net income = pretax profit +interest rate + fixed charge+
controllable expenses = $ 770.000
• Total food revenue = Total expense & net income/1-40%= $ 1.283.333
• Total guest = days open x seating capacity x seat turn over= 62.600 seats
• Average meal price = Total food revenue/total guest= $ 20,50
1.2.3. Menu Pricing
1.2.4. Price Placement
1.2.5. Succesfull Menu
2. Menu Engineering
Worksheet
 2.1. Menu Engineering
• Another method of menu analysis, this method use contribution margin of
each menu. Wide variations in contribution margin can arise between
appetizer and main course. Menu engineering focus on the contribution
margin of eanch menu item and combined with its popularity or customer
demand. Menu engineering ignores the food cost percentages.
• Menu engineering means balancing the high and low food cost items, it also
includes strategically featuring promoting items to help reach your targets
• Recap of menu engineering
– Menu engineering concentrates on three variables : customer demand,
analysis of the menu items sales mix to determine the profitability of
individual menu items, and item contribution margin
– Finally a problem with menu engineering is that it is oriented toward
maximizing item contribution margin. High contribution margin items
usually have not only the highest prices but also the highest food cost
percentage. Higher orices can also decrease customer demand and profit.
2.1.1. Picture of Menu Engineering
 2.1.2. Statistic Function in Menu Engineerin

• The statistics provided in a menu analysis have

several uses. For example, the total sold
statistics can be used to predict what future
sales numbers will be. This information is
valuable for ordering supplies and organizing
the kitchen and kitchen staff to produce the
predicted number of items.
2.2. Contribution Margin
2.2. Contribution Margin (Cont’d)
 2.2.1. Profitability
• You want to sell menu items that have a high margin of profitability. The relative
profitability of an item is calculated by comparing its contribution margin to the
average contribution margin (ACM) of all items.
• The contribution margin is the selling price of a menu item minus the standard
food cost of the item. This is the amount that the item contributes to the labour
cost, other costs of doing business, and profit. The ACM equals the total
contribution margin divided by total numbers of items sold. Profitable items have
a contribution margin equal to or higher than the ACM.
• Desserts and appetizers may have lower contribution margins than entrées. This
is because these items generally have lower prices and cannot contribute the same
dollar value of contribution margin, even though their food cost percentage may
be lower than entrée items.
• Desserts may also have a low contribution margin. Often desserts are purchased
ready-made (e.g., cakes and cheesecakes). There may be little labour cost in
serving these items so the overall contribution of the dessert item to profitability
is high.
• Another factor to consider when reviewing
your menus is the popularity of an item.
Popularity is determined by comparing sales
of items to expected popularity. The expected
popularity is the predicted menu mix
(sometimes called the sales mix) if each of the
menu items in a category were equally
popular.
 2.3.1. How to fill it?
• Colomn A: Menu Item Name: List all the items in the menu category
being analyzed
• Column B: Number sold (MM) MM stands for menu mix (sales mix).
This column records the quantitiy of each menu item sold for the period
being analyzed, with the total of all items sold recorded at the bottom of
the column in box N.
• Column C: Menu Mix % Converts the number sold of each menu item
into percentage by used number of food sold divided total all food items.
example:
331 x 100 =11.5%
2873
• Column D: Item food cost: List the food cost for each menu items
• Column E: Item selling price: list the selling price of each menu item
 2.3.1. How to fill it?
• Column F : Item CM (E-D): Records the Contribution Margin of each menu by
deducting its food cost from its selling price. The contribution margin is the
amount of money obtained from each item sold to cover all other costs and the
profit desired by the operation
• Column G: Menu Costs (D X B): List the total cost for each menu item sold. It
is calculated by multiplying the number sold of each menu item by its food cost
• Column H: Menu Revenues ( EXB): Lists the total sales for each menu item
sold by multiplying the number sold of each menu item by selling price
• Box I: Record the total COST of all menu items sold and is the total of column
G
• Box J: Record the total SALES of all menu items sold and is the total of column
H
• Box K: I / J : Food cost percentage for overall food
• Column L: Menu CM (F X B) Records the total contributin margin for each
menu item
 2.3.1. How to Fill It?

• Box M: Records total of Column L

• Box N: N records total column B
• Box O: M/N= Records the average CM for all item sold, by using total CM (M)
divided with total number of item sold (N). The resulting figures in this box is
compared to the contribution margin of each individual menu item to determine
if its contribution margin is higher or lower than the average contribution margin
• Box P: CM Category: compare the CM either High or Low based on individual
CM compare to CM in box O
 2.3.1. How to Fill It?
 Box Q: (100/ITEMS) X average popularity
Records the average popularity of all menu items. In example, supposed to be
100/10 items= 10%.
Box Q = 100 x 10%
10
But based on Kasana and Smith state that it is unreasonable in practice to
expect that every menu items will achieve this minimu level of sales, based on
experienced the minimum should be 70% of the average popularity number. So
the formula will be:
Box Q = 100 X 70% = 7%
10
 2.3.1. How to Fill It?

• Box R= MM % Category. These categories are made by comparing

each menu items menu mix percentage with the average of 7 %
from box Q. The categories will record either High or Low
• Box S= Menu item classification
 Star are items with both higher than average CM and average
Popularity (HH Items)
Plowhorses are item have lower than average CM but higher than
average popularity (LH Items)
Puzzles are items have higher than average CM but lower than
average popularity (HL)
Dogs are items which have both loewer than average CM and
Popularity (LL)
2.3.2.Example of Menu Engineering
Worksheet Filled
3. Menu Classification
 3.1. Klasifikasi 4 Kelas Menu
Menurut Paul Cullen (1997 : 61) kelas menu dapat diklasifikasikan menjadi empat kelas, yaitu :
1. Star (Bintang)
Menu tersebut termasuk popular dan menguntungkan (popular and profitable).
Menu kategori bintang diperoleh dengan rumus :
Star Menu = MM High + CM High
2. Plough Horse (Kuda Bajak)
Menu tersebut termasuk popular tetapi tidak menguntungkan (popular but unprofitable).
Menu kategori kuda bajak diperoleh dengan rumus :
Plow Horse Menu = MM High + CM Low
3. Puzzle (Teka-teki)
Menu tersebut termasuk tidak popular tapi menguntungkan (unpopular but profitable).
Menu kategori teka-teki diperoleh dengan rumus :
Puzzle Menu = MM Low + CM High
4. Dog (Anjing)
Menu tersebut termasuk tidak popular dan tidak menguntungkan (unpopular and
unprofitable).
Menu kategori anjing diperoleh dengan rumus :
Dog Menu = MM Low + CM Low
 3.2. Quadran of Menu Classification
Sales Mix
100

90

80
Plow horse star
70

60

dog Puzzle
50

40

30

20

10

0
3500 4000 4500 5000 5500 6000 6500 7000 7500 8000 8500
4. Recap of Menu Engineering
 4.1. Strategi Untuk Kategori Makanan
• Sebagai tindak lanjut dari analisis menu perlu diambil langkah -langkah yang dapat meningkatkan
potensi makanan tersebut, sehingga makanan yang ditampilkan diminati oleh konsumen dan memberi
kontribusi margin yang optimal. Langkah-langkah yang perlu diambil adalah sebagai berikut (Sudiara,
2000 : 96) :
1. Kategori Star :
a. Mempertahankan kualitas dan harga makanan.
b. Menempatkan menu pada bagian yang paling strategis.
c. Menaikkan harga secara bertahap apabila jumlah permintaan meningkat.
2. Kategori Plow Horse :
a. Mempertahankan kualitas makanan.
b. Mengendalikan harga pokok makanan dengan pengawasan dan pelatihan.
c. Menaikkan harga secara bertahap dengan memperhatikan perkembangan permintaan.
3. Kategori Puzzle :
a. Menjual makanan melalui Special of the Day atau Table d’hote menu.
b. Meletakkan menu pada posisi yang strategis.
c. Menurunkan harga jual untuk memikat konsumen.
4. Kategori Dog :
a. Dihapuskan dari daftar makanan.
b. Kalau menu tersebut memanfaatkan trimming, dapat dipertahankan dan turunkan harga untuk
mencari popularitas.
c. Ganti dengan menu lain yang mengacu pada menu Star, walaupun bahan dasarnya sama.
 4.2. Menu Revisions
• Popular and profitable items are ones you want to maintain on
your menu. Maintain the specifications of the item rigidly.
• Do not change the quality of the product served. Feature the
item in a prominent location on the menu. You want to sell this
item, so make sure that customers see it.
• Have servers suggestively sell the item. For example, when
asked for suggestions, they could say, “You may want to try
our Linguine Chicken. It is very popular. It has a cream sauce
with lots of fresh basil.” Test the possibility of increasing
prices by raising the price slightly.