show me the money case study show me the money.pdf (1 page) Q Search bola Show Me the Money! Inmugazt foarte How Worksheet 13: Management of Financial Resources (See Hospital Foodservice Scenario) Moto As Jim Hennessey, foodservice director, thinks back over the past few months he is pleased to see the improvement the Memorial Hospital Food and Nutrition Services is finally beginning to show on Press Ganey scores for patient feeding. Now it is time to turn his attention and focus to the staff/visitor cafeteria. Jim reviews his profit and loss statement and sees that food costs for the past two months have increased from 40 percent of revenue (his guideline) to 42.5 percent. One recommendation made by Chef Ralph Jeffries is to offer rotisserie chicken to increase sales in the cafeteria. Ralph would purchase five-pound broilers (at $1.08 per pound) and prepare them in a rotisserie placed directly on the serving line in the cafeteria. The cook would quarter the chickens right in front of the customer who would be enticed by both the sight and smell. Ralph estimates they could sell eighty portions a day. Average labor cost is $16.00 per hour; Ralph calculates it would take about one hour of prep time for every batch of twenty chickens, which would include prepping the chicken and loading and cleaning the rotisserie. In addition, he approximates another two minutes of labor por chicken quarter to remove it from the rotisserie, portion it, and serve it. Using an operating margin of 52 percent, Ralph would like to charge $4.00 por portion. Jim is questioning the price since they usually use the markup factor to determine price and this would be quite different. More so, he wonders it spending $12,500 on a new rotisserie would really give him a return on his money. As he's mulling this over Jim attends his regular meeting with Linda Bolton, clinical nutrition manager. Like Jim, Linda is pleased that Press Ganey scores are increasing for patient food services but continues to look for ways to increase food quality, especially for patients on modified diets. She's just completed a nutritional analysis of the current heart healthy prudent menu and finds that it only provides 23 percent calories from fat, inconsistent with the current ATP Ill guidelines and also the recommendation to Increase MUFAS. The diet is also very low in fiber at 20 grams. Linda recommends a change to olive oil in loedondonandaninchinashondenatakia salestinsim.csendenhaking his head nous eighty portions a day. wort ben ob som ad loungo boog tobru od onoga isho Average labor cost is $16.00 per hour; Ralph calculates it would take about one hour of prep time for every batch of twenty chickens, which would include prepping the chicken and loading and cleaning the rotisserie. In addition, he approximates another two minutes of labor per chicken quarter to remove it from the rotisserie, portion it, and serve it. Using an operating margin of 52 percent, Ralph would like to charge $4.00 per portion. Jim is questioning the price since they usually use the markup factor to determine price and this would be quite different. More so, he wonders if spending $12,500 on a new rotisserie would really give him a return on his money. As he's mulling this over Jim attends his regular meeting with Linda Bolton, clinical nutrition manager. Like Jim, Linda is pleased that Press Ganey scores are increasing for patient food services but continues to look for ways to increase food quality, especially for patients on modified diets. She's just completed a nutritional analysis of the current heart healthy/prudent menu and finds that it only provides 23 percent calories from fat, inconsistent with the current ATP III guidelines and also the recommendation to Increase MUFAs. The diet is also very low in fiber at 20 grams. Linda recommends a change to olive oil in all food preparation and an increase in fresh fruit and vegetable selections. Jim responds shaking his head, "Show me the money!" 1. What would be the effect of pricing all items using prime cost verus the factor method? 2. Calculate the NPV and payback period for the rotisserie cooker. The cost of capital is assumed to be 8 percent. The useful life of the machine is ten years. 3. What is the impact on the financial outcome of an increased food cost? 4. Can increasing revenue overcome an increase in the percentage of food cost? 5. What financial impact could Linda's dietary recommendations have upon food costs? How can hospital foodservice balance nutrition and cost concerns? of the cost issues presented, to which should Jim address his efforts? stv show me the money case study show me the money.pdf (1 page) Q Search bola Show Me the Money! Inmugazt foarte How Worksheet 13: Management of Financial Resources (See Hospital Foodservice Scenario) Moto As Jim Hennessey, foodservice director, thinks back over the past few months he is pleased to see the improvement the Memorial Hospital Food and Nutrition Services is finally beginning to show on Press Ganey scores for patient feeding. Now it is time to turn his attention and focus to the staff/visitor cafeteria. Jim reviews his profit and loss statement and sees that food costs for the past two months have increased from 40 percent of revenue (his guideline) to 42.5 percent. One recommendation made by Chef Ralph Jeffries is to offer rotisserie chicken to increase sales in the cafeteria. Ralph would purchase five-pound broilers (at $1.08 per pound) and prepare them in a rotisserie placed directly on the serving line in the cafeteria. The cook would quarter the chickens right in front of the customer who would be enticed by both the sight and smell. Ralph estimates they could sell eighty portions a day. Average labor cost is $16.00 per hour; Ralph calculates it would take about one hour of prep time for every batch of twenty chickens, which would include prepping the chicken and loading and cleaning the rotisserie. In addition, he approximates another two minutes of labor por chicken quarter to remove it from the rotisserie, portion it, and serve it. Using an operating margin of 52 percent, Ralph would like to charge $4.00 por portion. Jim is questioning the price since they usually use the markup factor to determine price and this would be quite different. More so, he wonders it spending $12,500 on a new rotisserie would really give him a return on his money. As he's mulling this over Jim attends his regular meeting with Linda Bolton, clinical nutrition manager. Like Jim, Linda is pleased that Press Ganey scores are increasing for patient food services but continues to look for ways to increase food quality, especially for patients on modified diets. She's just completed a nutritional analysis of the current heart healthy prudent menu and finds that it only provides 23 percent calories from fat, inconsistent with the current ATP Ill guidelines and also the recommendation to Increase MUFAS. The diet is also very low in fiber at 20 grams. Linda recommends a change to olive oil in loedondonandaninchinashondenatakia salestinsim.csendenhaking his head nous eighty portions a day. wort ben ob som ad loungo boog tobru od onoga isho Average labor cost is $16.00 per hour; Ralph calculates it would take about one hour of prep time for every batch of twenty chickens, which would include prepping the chicken and loading and cleaning the rotisserie. In addition, he approximates another two minutes of labor per chicken quarter to remove it from the rotisserie, portion it, and serve it. Using an operating margin of 52 percent, Ralph would like to charge $4.00 per portion. Jim is questioning the price since they usually use the markup factor to determine price and this would be quite different. More so, he wonders if spending $12,500 on a new rotisserie would really give him a return on his money. As he's mulling this over Jim attends his regular meeting with Linda Bolton, clinical nutrition manager. Like Jim, Linda is pleased that Press Ganey scores are increasing for patient food services but continues to look for ways to increase food quality, especially for patients on modified diets. She's just completed a nutritional analysis of the current heart healthy/prudent menu and finds that it only provides 23 percent calories from fat, inconsistent with the current ATP III guidelines and also the recommendation to Increase MUFAs. The diet is also very low in fiber at 20 grams. Linda recommends a change to olive oil in all food preparation and an increase in fresh fruit and vegetable selections. Jim responds shaking his head, "Show me the money!" 1. What would be the effect of pricing all items using prime cost verus the factor method? 2. Calculate the NPV and payback period for the rotisserie cooker. The cost of capital is assumed to be 8 percent. The useful life of the machine is ten years. 3. What is the impact on the financial outcome of an increased food cost? 4. Can increasing revenue overcome an increase in the percentage of food cost? 5. What financial impact could Linda's dietary recommendations have upon food costs? How can hospital foodservice balance nutrition and cost concerns? of the cost issues presented, to which should Jim address his efforts? stv