Apicbase Glossary

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food and beverage industry glossary



Yield management is a fundamental concept for any business operating in the hospitality industry – particularly hotels. It involves pricing strategies which aim to maximize revenue by selling the right room to the right customer at the right time and price. In other words, it refers to maximizing yield (i.e., total revenue generated).

In the culinary world, yield also plays an important role. It indicates how much of a finished or processed product can be produced from a given quantity of raw materials. For example, if you start with 1 kilogram of potatoes, you may expect to end up with 800 grams after peeling them. The same principle applies to recipes; for instance, a soup recipe may yield 10 liters. This makes yield management for restaurants an essential part of food cost control; the goal is to maximize yields while keeping costs under control. In other words, it’s all about making sure you get the most out of your ingredients in terms of quantity and quality. By understanding how much yield can be expected from certain recipes and raw materials, it is possible to optimize purchasing decisions and make sure that you are maximizing the value of each ingredient. With careful yield management, restaurants can ensure they are meeting their budget goals while providing delicious, consistent dishes.

The key to effective yield management for F&B businesses is to have the right business tools and processes in place. A good ERP system that includes features such as inventory management, recipe costing, production planning and forecasting can help a business accurately track product costs and usage across multiple menu items. This will enable the business to compare actual product yields to expected yields, identify areas of wastage and loss, and develop corrective actions accordingly. Additionally, regular reviews of recipes and supplier costs can help a business stay up to date on the best market rates for ingredients and other supplies. Finally, having an experienced team leader or manager who is knowledgeable about production principles can ensure that all processes are properly followed and monitored. With these tools and processes in place, F&B businesses can effectively manage yield to drive efficiency, cost savings, and improved profitability.

There are various mistakes that could potentially happen when calculating yield. The first common mistake that is made when calculating yield is miscalculating the cost of the raw material. This can lead to an incorrect calculation of the amount of product obtained from a given quantity of input. Additionally, miscalculating labor costs or other costs associated with production can also have an effect on the yield calculation. Another mistake is not taking into account any losses that may occur during production, such as waste or spoilage of materials. Finally, not properly factoring in the time value of money when calculating yield can lead to inaccurate results. By understanding these common mistakes and taking steps to avoid them, businesses can ensure they have an accurate calculation of their yields.

Important factors in yield management are diligent control of food waste and inventory management. Keep those two in check to boost your bottom line.

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