Deciding What Comes Off

Prerequisites: Modules 47, 48.

The sequence

Rank by contribution in dollars.

Check the room's role for each item.

Model the removal.

And try the cheaper fixes first.

The decisions

Whether to remove or to fix. Removal is the crudest available intervention and it is usually reached for first, per Module 47.

Reprice, re-portion, re-spec the expensive component, cross-utilize the ingredient. All of those come before deletion.

And whether the item does something the report cannot see. Three questions — multi-cover table, named when describing the room, extends the stay. Any yes means model the beverage effect.

Because cutting the worst-percentage item improves the percentage exactly as predicted and can lower total profit — and no food report will ever show why.

What you are reading

Contribution, not percentage.

And the item's role.

What goes wrong here

Cut on percentage.

And the beverage effect valued at zero.

Verification

Model it in dollars before doing it.

The boundary

Financial analysis belongs with a CPA.