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Importance of Food and Beverages Sector: Financial Controls and Service System

Introduction

This unit will enable learners to gain understanding of the day-to-day activities and procedures involved in food and beverage operations, whilst also developing a range of practical operational skills. Learners will develop understanding of a range of food and beverage production and service systems. Learners will undertake an investigation of staffing implications for different systems and businesses to inform system comparisons. Learners will study menu planning and recipes suitable for different industry contexts. They will also investigate the importance of financial processes including, purchasing options, costing of raw materials and commodities, and different selling price models.

Learners will develop their understanding of the processes involved in planning and developing recipes and the factors that determine menu compilation for a variety of customer groups. Learning from this unit is demonstrated in the planning, implementation and evaluation of a food and beverages service for a hospitality event. Ultimately, learners will be able to transfer and apply their expertise to different food production and service situations within the hospitality industries.

On Successful completion of this module, students will be able to:

1. Understand different food and beverage production and service systems

2. Understand the financial controls used in food and beverage operations

3. Be able to devise menus for hospitality events

4. Be able to provide food and beverage services for hospitality events.

The Scenario

Students of this course are preparing an event to celebrate Summer Fair in  Valentine’s Park. You have done the necessary preparation and invited all your classmates, their spouses and children. 

Among the 200 guests, 150 of them are adults and 50 children. Subsequently, you also have 20 vegetarians, and 10 guests who suffer from diabetes. Therefore, you ought to consider an appropriate Food & Beverage service to satisfy everyone’s need. 

You should also have exciting options for children to eat and drink. It will be wise to have a selection of dessert/sweets to comfort everyone in the party. 

Your budget is £6000 and should be used to pay for the food, beverage, staff and anything else that would be needed to deliver the event. 

You want the party to be an enjoyable as well as memorable experience. 

Prepare a Food and Beverage menu, suggest the appropriate method of serving as well as entertainment and the services needed to ensure the success of the party.


Task A: Practical Presentation
Learners are required to do a practical presentation using the above scenario. Also include supporting marterial such as PowerPoint and menu. This is a group work you can be in a group of 6 learners maximum. Time limit for each grup-presentation is 30 minutes. The presentation should cover the assessment criterias below:
  1. Discuss the characteristics of food production and food and beverage service systems (ref:1 .1) and apply/justify the suitability of those systems for particular food and beverage outlets (ref: 1.4)
  2. Discuss factors affecting recipes and menus for specific systems (ref: 1.2)
  3. Compare the cost and staffing implications for different systems (ref: 1.3)
  4. Demonstration of the use of cost and pricing processes (ref: 2.2)  
  5. Compile a food and beverage menu for a hospitality event  (ref: 3.1) and justify the selection (ref: 3.2)
  6. Plan a food and beverage service for a hospitality event within an agreed budget (ref: 4.1)
  7. Implement the planned service maintaining standards of quality and health, safety and security. (ref: 4.2)
Task B  Individual report
Based on the Summer Fair in the Valentine Park party, provide a written account demonstrating your understanding of:
  1. Discuss the use of financial statements used in the food and beverage event you have planned (ref: 2.1)
  2. Analyse the purchasing process (ref: 2.3)
  3. Evaluate factors to determine the success of the service, making recommendations for improvement (ref: 4.3)
Word count: for task B. 2000-2500 words


Answer

Introduction:

In this present era, for the maintenance of the effective hospitality sector, it is important to maintain an effective food and beverages services in that sector. The main reason behind that is it helps any hospitality-based organisation to provide better set of services to the customers. Presently, UK has more than 8000 organisations that involved in the food and beverages industry. The present worth of this industry is more than the 113.1 billion euro. In any economy, food and beverages sector provides high level of contribution to increase the GDP. This present assignment is intended to provide a clear knowledge regarding importance of the food and beverages sector along with the brief knowledge regarding financial controls and service systems. This assignment also highlights the importance of the financial statement and provides a brief recommendation at the end.


Task A:

Introduction on food and beverage

1) Characteristics of the food productions along with the food and beverages service system and application of the suitability for the particular food and beverages outlets (1.1 and 14):

Characteristics of the food productions

Food and beverages section became a vital part into everybody’s life/. The main characteristics of the food and beverage sector are it can promote the diversity by creating different types of food cuisines as well as concepts. It is the sector where customers are everything that controlled the overall sectors.

Characteristics of the food and beverage productions

In case of the table services, food is prepared and after that, it is placed on different plates. After that, the food is delivered to customers. On the other hand, in case of the buffet services, food is prepared in advance and then it placed in the containers. In case of the English services, foods are prepared and then it is placed in different dishes. After that, the food is transport to the restaurants and then the food is placed in the table. On the other hand, in case of the silver or Russian service method, food is prepared and then it is placed in the containers that are made of silvers (Davis et al. 2013). In case of the A la Carte, the foods is prepared and served to the customers when they ordered it from the different menu item available in the premises of hotel. In this method, a guest ordered separately and pay for it separately. On the other hand, in Table D hotel, fixed numbers of food is prepared from which customers selected one food and ordered. Here customers are liable to pay for the whole meal at a fixed rate. In the Flambe services, foods are not cooked but it is prepared. The server of the meal puts the portable trolley infront of guests and cooks the food in front of them.

 Tradition food preparation

In the tradition food preparation, foods are purchased in raw and then it is stored, prepared and served among the customers. On the other hand, in cook-chill method involves the normal preparation of the food followed by a rapid chilling method. In case of the centralised food preparation, foods are prepared and then it is outsourced (Lang and Heasman, 2015). On the other hand, sous-vide cooking mainly requires the involvement of the vacuum cooking for the food production.

 Table service method

Table service method is mainly utilised in different restaurants and hotel. Main opportunities of this method are portion control, quality as well as presentation. On the other hand, by following the buffet services is mainly followed in the restaurant, which is also suitable for the banqueting and conference event. This service method is effective to serve huge quantities of individual. This service is effective for the summer fair because it requires less involvement of the staff. On the other hand, English service method requires less amount of demand for the kitchen but it has one disadvantage that is in this method the food distribution can be inconsistent. Silver method should not be followed here because it requires high budget and high skilled labour. On the other hand, A la Carte, table D’Hotel and Flambe method should not be followed because it increases the overall costs and not effective for huge number of customers (Papargyropoulou et al. 2014). On the other hand, traditional method will be appropriate because it requires less cost of food production. On the other hand, it requires to prepare the food on the premises if the event so that customers can get the fresh foods. Thus, this method is more appropriate here than the cook-chill method and sous-vide method. Centralised method is not appropriate here because it requires preparing food for 200 customers. 

2) Different factors that affects the recipes and menus for any specific systems: (1.2)

 Different factors that affects the recipes and menus

For the creation of any successful menu, it is important for the menu to be unique in nature. In order to create food and beverages for 200 guests among them 150 are adults, 50 are children. From the guests, 10 people are suffering from diabetes. In this context, it is very much effective to consider the nutritional value of the food during preparing the menu because, diabetes patient require special nutritional value and food composition. On the other hand, menu must be prepared according to the suitability of the event because different types of menu are appropriate for different events (Lang and Heasman, 2015).

Flavours and appearances of food

 In different times, different flavours and appearances of food are necessary. Therefore, by considering the summer season, the food menu item must be prepared. Different customers have different types of perception; menu must be developed according to the need of customers so that it can generate the positive perception. For the creation of healthy menu, providing all the information during ingredients of food is necessary.

3) Comparison between the staffing and cost implication for different types of systems: (1.3)

Comparison between the staffing and cost implication

Total  budget of the event is £6000 Among it, 45% must be spend for buying raw processed food so that the main menu item can be generated. 20% of the total costs must be spent for hiring and maintaining human resource. Twenty-five percent costs are associated in maintenance of operation. Remaining amount must be spent for equipment of the product. This equipment mainly involves the different washers and food processing equipments.

Comparison between staffing and cost implication

For providing effective services to the customers, it is important for any organisation to hire skilled personnel because providing effective customer services is always important. Non-skilled personnel always generate an ineffective result and create negative perception among the customers. In the food-processing sector, maintaining hygiene and nutritional value of the food is necessary so that hiring effective and skilled staff is necessary to achieve success (Boella and Goss-Turner, 2013). Along with that, to complete the event at the pre-determined costs, hiring an effective and skilled professional is important; otherwise, overhead costs can be increased.

4) Utilisation of the costs as well as pricing process: (2.2)

Utilisation of the costs as well as pricing process

For determining the costs as well as pricing process, it is important to calculate the amount that is spent to purchase any products. Costs or pricing can be calculated by reviewing the lists of menu, dishes or beverages related costs. Moreover, by calculating the direct, indirect, and fixed or variable costs, the total costs can be calculated. Direct costs are costs that are required to buy different materials to cook. For buying raw materials to produce food in the traditional method, direct costs are required. Indirect costs are those that are not part of the production but required in different stages of the production. On the other hand, fixed costs are those that are fixed in nature, for example, the costs regarding the rent of the place. 

utilisation of costs as well as pricing process

During, calculation of the price, discount are also calculated because it helps to calculate the exact costs for arranging any event (Koupaie et al. 2014). Along with that, during the calculation of the pricing, VAT methods are also considered because it incurs on every purchase methods. The current VAT rates are the 20%, therefore, this costing element need to be considered. 

5) Compilation of a food as well as beverages menu for a particular hospitality event (3.1) as well as justification of the selection (3.2):

Compilation of a food as well as beverages menu

For arranging any vent with more success, development of effective menu is important. The menu for the Summer fair is shown above. 

Compilation of a food menu

Menu is selected for this event based on the requirements and nature of the guests. Different guests of different age and food preferences, required different types of food to be consumed. The food preference of adults and diabetes patient should not be same. Therefore, selecting sugar free lemonade, fruit salad and fish items are effective because they require less amount of calorie. On the other hand, children need to consume those foods that have a good nutritional value. 

Compilation of beverages menu

Therefore, deciding fruit juice, ice cream cakes, chicken burger and noodles are the effective food for a child. On the other hand, any vegetarian do not consume non- vegetarian items, therefore, consuming apple and the orange juice, chuck E. Cheese and fruit smoothy is the effective menu for them because these products are not non-vegetarian items. On the other hand, a normal adult can consume any kind of vegetarian and non- vegetarian items, therefore, selecting the above mentioned menu are effective for them.

6) Planning for a food as well as beverages services for any particular hospitality based event (4.1):

Planning for a food as well as beverages services

In order to arrange the event, mainly the buffet system and the traditional food processing items are selected. 

7) Implementation of the planned services by maintaining the standards of the health as well as quality along with the safety and security: (4.2)

Implementation of the planned services

Mainly traditional food production system is considered for conducting the event, whereas the serving method for the event is the buffet method. During preparation of the food for any event, maintenance of the food hygiene and safety is always important. Before and after preparing the food, it must be stored most effectively to make the nutritional value of the food intact. 

Implementation of the planned service

Therefore, maintenance of the food quality is mostly important. Food safety and security act is very strict in UK (Tombs and Whyte, 2013). Therefore, to avoid any kind of legal issues and health related issues of the guests, it must be effectively followed. Along with that, it is important for the host to provide minimum level of the security to the employees that are associated in the food production. The event must involve some entertainment aspects that can provide entertainment to the guests. 

Conclusion of food and beverages

Task B:

1) Utilisation of the financial statements that are utilised in the food as well as beverages system in the planned event: (2.1)

As stated by Pratt (2013), financial statement is the formal record that records different financial activities regarding any person, businesses or other types of business entities. Financial statements mainly records different types of financial data that are represented in the structured manners so that it can be easily understand by others. Some important financial statements that must be considered or recorded during the arrangements of the event are the dish costing statements, operating statements, sales record, cost statements, and variance analysis. 

Financial statements

Figure 1: Financial statements

(Source: Pratt, 2013)

Among those financial data, dish-costing statements mainly record the data regarding the costing of the dishes that are mainly utilised by the chefs to calculate the exact price of the menu items. On the other hand, the cost statements can be defined as the breakdown of the costs that are required to arrange the event that helps the hosts to analyse the total costs along with the direct as well as indirect expenses. Dish costing statement can help to understand the expenses that were spent for buying dishes. Therefore, this statement can be utilised to reduce the overhead expenses regarding the dishes or it can be utilised to complete the event within the budget. Moreover, dish-costing statement can help the event organiser to calculate the exact price of the menu or the exact selling price of the menu items.

Among different financial records, sales records of the company are the mostly valuable source of the marketing information. According to Palepu et al. (2013), sales records mainly involve those information that any organisation have on their customers, which mainly involve the contact information of the customers. Variance analysis also helps the organiser of the event at Valentine’s Park to understand the present costs to organise the event so that future costs can be controlled. Variance analysis can be defined as the differences among the budget, standard or the planned amount and the exact amount regarding the amount of beverages as well as dishes. During the calculation of the financial statement, calculation of different costs is important. Those costs are related to food costs, beverages related costs, overhead costs and labour related costs. Food costs are mainly those costs that are related to the production of different menu items. On the other hand, beverages costs are related to the costs related to production of different drinks. Labour costs for arranging the event in the Valentine’s Park are those costs that are needed to hire the human resource for hiring human resources. On the other hand, overhead costs are related to rent, utilities and the linen.

Generating financial records can help the host of the summer fair event to arrange the event more effectively so that it can be conducted within the stipulated amount of money. Financial statement can help the organiser of the event to get one reliable and effective indication regarding the operating results, financial position and changes in the financial position of the company. Effective financial statement can help the organiser of the event to know about the business and help them to explain different types of the effect of economy on the organiser of the event. Along with that, for the successful conduction of the event, the organiser of the event must generate four different types of operating statements such as balance sheet, statements regarding the cash flows, income statement and the statement regarding the retained earnings. By maintaining the effective balance sheet, the management of the event organiser company can evaluate the assets as well as the liabilities (Abdel-Kader and Luther, 2016). It is mandatory for the event organiser and the accountant to maintain an effective balance sheet for the business because it provides an effective view regarding the financial standing. Through an effective balance sheet, the organiser can effectively track their spending for different things. Effective balance sheet helps to calculate the current as well as non-current liabilities helps to pay different liabilities within time. Therefore, balance sheet decreases the chances of penalty due to the late payment. On the other hand, the cash flow statements help them to understand the sources of the income from which the cash flows are actually generated during the investing, operation as well as the financing. Cash flow statement refers to the movement of the money out or into the business. Therefore, this cash flow statement can help the event organiser to evaluate the money that are available to them and the money that are spent by them. Cash flow statements can help the event organiser in varieties of ways, it helps them to determine different problem associated with the liquidity of the company and it also helps to understand the rate of the value or return. On the other hand, the income statement can help the management of the event organiser to evaluate the profit and loss statement by which the amount of profit as well as loss can easily be understood. An income statement is mainly divided into three different parts such as total expenses, total revenues and the net income. Therefore, income statement can help the organiser of the event to understand the sources of revenue generations and the total amount of revenue that were collected by them. Along with that, it also helps to calculate the net income by calculating the total expenses due to investment in different parts to arrange the event. Along with that, statement regarding the retained earnings can help the organiser of the event to understand the changes in the retained earnings of the event organiser over a fixed reporting period. Retained earnings refer to the part of the net income, which is retained by only the organisation rather than distribution among the stakeholders of the organisation. Therefore, by calculating the retained earnings statement, the event organiser can calculate the total amount of revenue that was actually earned by them.

For arranging the events at the Valentine’s Park, details record regarding different options such as information regarding the suppliers, banks as well as lenders, shareholders and Inland Revenue is required. This is because; this information helps the host to arrange the event with more effectiveness and helps them to reduce the overhead costs (Palepu et al. 2013). Along with that, details record regarding that information can help the host to complete the event within the budget. Any event is mainly organised with the money of the shareholders or investors. Therefore, the event that is organised in the Valentine’s Park is not an exception of this.  In this way, information regarding the shareholders can help the investors to understand how their investments are invested in the event. On the other hand, information regarding the suppliers can help the host of the event to understand the business trade credit while borrowing goods from them. Recording the information regarding the banks or lenders can help the hosts of the event to repay the loans after the conduction of the event. On the other hand, Inland Revenue helps the hosts of the event to understand the tax returns.

2) Analysis of the purchasing process: (2.3)

Purchasing process can be defined as the process of searching, selecting, purchasing, receiving, storing and utilising the commodity according to the catering policy of establishments. Purchasing process mainly involves the employment of any person for purchasing the food as well as beverages for any establishments who are not only involved in the purchasing process but the person is also involved in the storing, receiving as well as issuing all of the commodities to arrange the event. There are different purchase related functions that mainly balances the inventory against the investments. For arranging the event most successfully, it is important to apply different strategies to purchase different product by which fresh seasonal food can be produced (Ivert et al. 2015). The purchasing process related to the arrangement of the event involves different processes such as requisition of the supplies as well as equipment, specifying the purchase process, receiving the purchased goods, generating invoicing and storing the supplies as well as equipment.

The purchasing process

Figure 2: The purchasing process

(Source: Davis et al. 2013)

In case of the food as well as beverages operation, inventory control as well as requisition of the control must be implemented. For facilitating the requisition of the equipments and the supplies, first selecting an appropriate supplier from a list of the suppliers is necessary. After that, it is important to obtain the quote and facilitate the negotiation of the price. Along with that, it is important place the order for the purchase. During this process, it is important to keep different copies of that order in the offices. After the requisition of the supplies and equipments, it is mandatory to generate the purchase specification. As stated by Davis et al. (2013), purchase specification mainly note down the items that are required, amount of the item, along with size and weight of the items. During the purchasing of the food and beverages item,. The hosts of the event arranger must utilise the specification regarding the purchase during buying nay products. However, the purchase specification regarding the beverages is simpler than the food related products. The main reason behind that are beverages items mainly purchased under the label of the brand name of any products that have a consistent level of quantity as well as quality. However, the receiving systems vary among different companies but receipt of every organisation mainly involves the inspection regarding the quantity, inspection regarding the quality and different clerical process. After generating the receipts of the product, the organiser of the event must generate the invoice sleep so that they can check that the supplied material meets their needs or not. Invoicing is one of the processes that help any accountant to easily maintain the exceptional quantity of the money in any month. As stated by Lang and Heasman (2015), generating an effective invoice and pay the adequate amount of money to the supplier always helps any people to maintain healthy relationship. Therefore, for arranging the next event with more success, the event organiser must generate the correct invoice and pay the adequate money to their supplier so that they can create any future event of them with more success. After generating the invoice for the raw materials that they have received from the supplier of any material such as chair, chemicals, dishes and fresh or frozen food item etcetera it is important to store the raw material at the premises of the Valentine’s Park with more technical process. This process will decrease the number of wastages and the overhead costs for the event. During storing of any food related raw materials, three different points need to be considered such as space, stocktaking and the clerical procedures. The organiser of the event must divide their food storing facilities in different parts such as storing system for dry goods (such as cans, flour, jars etcetera)., items for the freezing (such as ice cream or ice cubes) and items for the refrigeration (such as meat, dairy related products etcetera). The dry food must be stored in the place where the humidity is less. The proper environment for storing the dry food is the place where the temperature is less and the environment is dry and dark. Cool temperature increases the shelf life of dry food. On the other hand, dark and dry environment ensures the taste and colour of the food. On the other hand, the refrigerated product must be stored in the environment where spoilage microorganisms can be destroyed. For storing the refrigerated item, the maintenance of the temperature among the 34 degree to 40 degree temperature is important. For storing the freezing items, it is important to maintain a very low temperature and low humidity environment.

3) Different factors that determines the success in the services and recommendations for the improvements: (4.3)

According to Ivert et al. (2015), management of any company mainly determines success of any event. Thus, in this case, the organiser of the summer fair event mainly judges the success of the event at the Valentine’s Park. The management must judge the cooking style, storing of the food and the beverages, controlling of the deliveries and the food services. Different factors by which the success in the services can be judged are the satisfaction level among the customers, selling standards, effectiveness in costs as well as time, maintaining the quality assurance and the effectiveness in the planning and organising the event. If it has been observed that the clients are highly satisfied then it can be assumed that event is successful by providing effective services to customers. In case of arranging the event within time and completing the event within the stipulated costs, it can be assumed that the event is effectively completed. If it has been observed that effective quality standards are maintained or an effective selling standard is followed by the event organiser then it can be said that the event is organised with effectiveness.

Recommendations:

For improving the quality assurance, the event organiser should purchase the food from only a good supplier. After that, it is also important to provide effective training to the staff for maintaining an effective standard in producing food and handling the beverages. It is also recommended to follow the health as well as safety standards. For increasing the effectiveness in the costs and time, it is important to negotiate with all of the suppliers. along with that, creating and maintaining an effective and good relationship with different local businesses is very much important. For satisfying the customers with highest extent, it is very much important provide personal attention to all of the customers. Moreover, it is also important to provide an excellent service to customers so that a positive attitude can be created among them. On the other hand, for the improvement of the planning and organising the management, it is important to communicate the customers with more effectiveness. Moreover, it is also important to maintain the safety standards and hygiene in the food and beverages section so that it do not cause any kind of food poisoning. For providing delicious taste of different foods, it is very much important to maintain different standards regarding the food as well as beverages departments.

Conclusion:

From the above discussion, it can be effectively conclude that for the achievement of the huge success in arranging any events, it is highly important to provide a clear focus on the service or menu style. This is because; effective menu or service style can help any event organiser to satisfy the needs of the customers. For the successful arrangements of any event, it is also important to maintain an effective purchase process along with the effective record regarding the costs. This is because it helps to maintain transparency that increases the brand image of any organisation. From the above discussion the utilisation of the different financial statements has been learned. Moreover, the importance of maintenance of an effective invoice is understood. Along with that, different factors that affect the menu ort recipe item is understood and then this assignment helps to understand different factors that can create a successful menu for a successful event.

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