Prepared with the very finest of ingredients

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Reference no: EM133861159

Question

Jennifer Tye is the manager of a fine dining restaurant chain that serves its guests a variety of traditional Southern dishes prepared with the very finest of ingredients. It is most famous for its upscale version of Chicken Fried Steak. At Jennifer's restaurant, this dish (beef steak, seasoned, breaded, and then pan fried) is prepared using USDA Choice Rib-eye Steak. As the price of rib-eye has increased, Jennifer's food cost percentage on this item has risen dramatically. Currently, Jennifer is considering whether the selling price of this dish should be increased significantly or if she should take other steps to help reduce her overall product cost percentage.

1. What issues should Jennifer consider prior to making this decision?

2. What alternatives to raising prices do you think are available to Jennifer?

3. What would you advise Jennifer to do

For Your Consideration

1. In most cases, managers who buy fresh fruits, vegetables, and meat products that have been cleaned, trimmed, chopped, portioned, sliced, or in other ways preprocessed, will pay more per purchase unit than managers who do their own on-site processing of these items. What key information do you think managers must possess to best determine whether it is better to buy preprocessed products or to do their own processing of such products on-site?

2. Why is a thorough understanding of the relationship between sales mix and overall product cost ratios so important to a manager's cost control efforts?

3. The best managers compare their actual cost performance to their attainable performance. Why is this comparison especially valuable for their future cost control-related decision making?

Reference no: EM133861159

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