HBM 384 1st EditionExam 1 Study Guide-List the five major segments of on-site foodservice and briefly describe some of the subtle differences among themoManagement-Interpersonal skills-Passion/Enthusiasm-Honesty/integrity/strong ethics-Organizational skills-Leadership skills-Ability to handle stress-Restaurant experience knowledge and skills-Focus on Customer-Job-related self confidence-Flexibility/creativityoCustomers-All customers are different, depending on what the consumer is looking for or the situation they are in. Ex. A hospital would not be selling hamburgers and hotdogs, and a university might at sport events. -Some places to eat are for leisure, others are for convince, while others are because people have no other choice (prison)oLabor-Labor is also difference in all places.Ex. Colleges have the advantage of having all the students on campus, and a need for food, therefor many employees must be hired to cater to the masses, while also a few general managers are needed for different locationsEx. Work at a healthcare facility and you may or may not do the same type of labor every day, which could include preparing food, or taking orders from patients. Managers want good employees, you will get good employees if you are a good manager. oMenu-Types of menusSelf-OpMade to orderCycle MenuSeasonaloProduction-Different types of production -> work towards efficiency, and quality.-Scratch cooking is a new recent trend… this has pros and many cons.-Describe the various differences between a “fee” and a “P&L” contract.oIn the earliest applications of contact feeding, clients paid the contractor a fixed fee forservice, and the contracted company would try and save money through its systems, or may spend more than given… and no one would be kept accountable. oFee Contract: was a guarantee to arrangements that the outsourced service would not exceed budgetary projections. oProfit & Loss (P&L): Contractor assumes all risks and enjoys all the rewards-Are commonly found in:B&I locations- since the operations are fairly straight forward and clearly definedEducation- but the contracts are more complexHealthcare- upcoming -Define productivity. As part of your answer, provide an example of how you might quantify productivity in onsite foodservice.oProductivity: The effective use of resources to achieve operational goalsoTotal Productivity = Output/input-=(Goods+services)/(labor +materials+energy+capital)oEx. Of productivity, - meals per labor hour, cleaned rooms per labor houroEnhancing productive-Add/upgrade equipment to aid employees-Replace workers with equipment-Replace outmoded methods or rules-Redesign work-Outsource -What prompted the biggest change in prison feeding in the last three decades?oDietary restrictions- people now can have more say over what they eat, do to preferences or dietary restrictions -What are the four criteria that might be used to prioritize items on a capital budget?1. Urgent2. Essential3. Economically desirable4. Generally desirable -How did the National School Lunch Program come into existence?oNational School Lunch Program: is a federally assisted meal program operating in public and nonprofit private schools and residential child care institutions. It provides nutritionally balanced, low-cost or free lunches to children each school day. The program was established in 1946.oAfter the war, America's unemployment rate was very high, and some families were unable to provide lunches for their children while they were at school. So through grants in aid, lunches became administered to children during school -Assuming you had 18.2 FTEs including two management positions, how many non-exempt labor hours would your operation use during a year? (Show your calculation.)oFull Time Equivalent: is a unit that indicates the workload of an employed person (or student) in a way that makes workloads comparable across various contexts. -One of your managers has just submitted his year-end financials to you for review (see income statement on the following page). His account is a straight P&L. What does your analysis suggest? (Be sure to discuss each of the major components—e.g., sales, food cost.)oThere is way to high of a loss in profit in the "Better Managed services Inc."SalesoSales: cafeteria did not make as much profit as they had budgeted for, but they did make more profit in catering than planned, which evens out the over/under estimates. There was a variance of -3.75%, which isn't too far off. They had planned for making $65,267 more dollars in salesoFood Cost: More money was spent on cafeteria and catering than was budgeted for. $47,440 more was spent on food cost than planned… this shows very poor pre planned budgeting or very poor methods of sticking to the budgetoLabor: The labor was budgeted for a total of $851,275, and they actually spent $42,620 less on exempt and non-exempt labor. This is then to their benefit in spending less… unlessit is the cause for lower sales. oDirect Operating Expenses: This segment was budgeted pretty well! There was only $781 dollars more spent on DOE than budgeted for. This is not a high amount!oProfit: budgeted profit was $118,608, actual profit was $47,740, this is a $70,868 or 59.75%difference. oTherefore…. This company did not do a good job at all of sticking to their budget through out the year, or from the start did not know how to accurately make a practical budget to follow. I would hire new management. -Your subordinate just suggested a project that requires capital spending. The project is expected to cost $375,000 but should increase revenue for each of next seven years by $79,000. Your hurdle rate is 13 percent. Do you approve the project? (Justify your answer with related calculations.)oYear 1: $79,000oYear 2: $79,000 +79,000=$ 158,000oYear 3: $158,000+ 79,000=$237,000oYear 4: $237,000 +79,000=$316,000oYear 5: $395,000oYear 6: $474,000oYear 7: $553,000-So by year 7, the revenue made by this project is $553,000.-$553,000 Revenue - $375,000 Cost = $178,000 Profit in year 7-By year 5, the program is only making a profit (have fully paid for cost of project)-$375,000 Cost / $553,000 Revenue = 68%Therefore, there is a 32% rate of return on the project by year 7.oBecause… 32% Rate of Return > 13% Hurdle Rate. Therefore you should approve the project-ORo$375,000 Cost/7 Years =