CHAPTER 3

Sales History and Forecasting

Developing Sales History Is no more than the systematic record of all sales
achieved during a given period of time. In the restaurant business, sales are generally
recorded in terms of peso sales and customers served.

A Sales History is a written record of the number of portions of each menu item
sold every time that item appears on the menu. It is a summary of portion sales. In
some food service establishments, sales histories are maintained for every item on the
menu, from appetizers to desserts. In others, the only records are only for those items
which are being tracked like for instance new product launched and the existing similar
products for comparison. Sales history is very necessary in tracking down the sales
performance of a particular product and is, therefore; used in predicting future sales or
the forecasting and or the Popularity Index.

Popularity Index = Sales for Item / Total Portion Sales for all Menu items
x 100

Predicting Future Sales

Sales to date is the cumulative total of sales reported in the unit. It is also the
number we get when we add today's sales to the sales of all prior days in the reporting
period.

Tues Wed Thurs Fri

Menu 1 94 38 91 89 96

Menu 2 62 67 47 67 95

Menu3 109 102 107 101 64

It is important to know that from the vertical analysis of the data, menu I to 3 are
at its peak on Monday, while in a horizontal analysis it is menu 3 which gives the
highest sales contribution. From this point of view, a business operator may already use
this as a basis in preparing the following:

a. Extra amount of ingredients for menu 3 should be made available

b. and higher than the other 2 menus.
c. A marketing strategy may be made for menu 2 since it gives the lowest sales
contribution.
d. Manpower plotting must be adjusted to oversee the preparation of menu.
 After an accurate sales history system has been established, a business operator
may begin to see whether the operation experiences some level of sale variation. This
Sales Variances or changes from previously experienced sales level gives an indication
of whether sales are improving, declining or staying the same.

Many operators use the Significant variation to determine whether a cost is

managed or not. A significant variation is any variation in expected cost that
management feels is a case for concern. This variation can be in costs that were neither
higher nor lower than the normal standard amount that was expected.

Formula for Variance Computation:

Variance = Sales this year - Sales last year

Sales this year - Sales last year x 100

% Variance = ________________________________________ x 100
Sales Last Year

Variance
% Variance = _________________________ x 100
Sales Last Year

Example:

Sales This Year Sales Last Year Variance Variance %

87345.23 89456.23
79345.54 83218.68
81234.67 81234.67
157234.23 80345.22

Comparative Study:

This pertains to comparison of data out of the gather figure drawn from the
history of one particular establishment.

Variance = Sales this year - Sales Target

Sales this year - Sales Target

% Variance = ___________________________________x 100
Sales Target
 Variance
% Variance = ___________________________x IOO
Sales Target

Sales History, Variance & Percentage Variance

Sales This Sales Last

Sales Target Variance Variance % Variance Variance %
Year Year

Jan 23456 20000 25000

Feb 56789 58000 54000
Mar 57888 55000 60000
Apr 44250 45000 47000
May 33650 40000 37000
Jun 63457 65000 60000
Jul 48650 46000 49000
Aug 49232 48000 47000
Sep 52350 55000 50000
Oct 47500 44000 48000
Nov 58400 59000 55000
Dec 68320 65000 63000

When significant Variation exists, the following must be undertaken by the

management.

1. Define the Problem

2. Determine the Cause
3. Take corrective action

Computing Averages

Average is defined as the value arrived at by adding the quantities in a series

and then dividing the sum by the number of items in the series.

Two major types of Averages used in the Food Service.

a. Fixed Average. An average in which you determine at specific time period.

b. Rolling Average. The average amount of sales over a changing time period.
 Fixed Average

Mon Tues Wed Thurs Fri

1 14 18 14 12 14
2 16 12 15 15 15
3 13 15 17 17 5
4 11 17 17 18 23
5 14 14 12 13 20
Fixed Average