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This articles provides insight and investigation tips to cost and variance product growth.

What does N/A mean in the Days on Hand column of the Cost and Variance report?

When Actual Usage is negative, this indicates that you have grown the product.

• Beg Inv + Purchases – End Inv

When Days on Hand

is calculated using negative Actual Usage Units, the result would be negative.

Instead, it is

displayed as N/A.

• End Inv / ( Actual Usage in Ending Inventory Week / Days in Ending Inventory Week )

What is Product Growth?

Definition

Simply put, product growth is negative usage; when the difference of ending and beginning quantities for any given period is greater than the amount of product received in purchases for the same time period. This is in contrast to the usually expected positive usage where the difference between inventories is covered by purchased quantities.

Calculation

See below for examples of how the Cost of Goods Sold calculation can end in negative usage

Where would I see this in reporting?

Cost and Variance

• – Actual Units

• (Actual $)

• – Days on Hand

  • End Inv / (Actual Units in Inventory Week / Days in Inventory Week)

  • When Actual Usage is negative, Days on Hand will be negative, and the report will display “N/A” (not available).

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IvA

All Food IvA and Beverage IvA will show Actual Usage in the Product Detail drill-down. The overview/summary pages will not show actual product usage, but rather the difference (variance) between actual usage and ideal usage.

When comparing Actual Usage to Ideal Usage, negative variance indicates that less product was actually used (based on inventoried quantities and purchases) in contrast to menu item recipe usage (based on menu mix sales and recipe ingredient amounts)

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Product Details Example

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TvA

The TvA Store Summary will display Actual Usage by Category in the Summary view and by Product in the Detail drill-down.

Theoretical Usage only truly exists for products used in recipes. Actual Usage is used for Non-Recipe Costs and Non-Inventoried Purchases in TvA reporting.

When comparing Actual Usage to Theoretical Usage, negative variance indicates that less product was actually used (based on inventoried cost and purchase costs) in contrast to menu item recipe usage (based on menu mix sales and recipe ingredient costs).

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How can I correct this?

The first step is to identify the cause of the growth.

Consider the variables being factored in the calculation:

• Inventories - Beginning and Ending

  • Ingredients

  • Prepped items

• Purchases

  • Ingredient Mapping

  • Order Received Date

  • Inventory Units / Case Quantity

  • Transfers (IUTs)

  • Credits

Inventory

Here are some ways to investigate and resolve:

Review Posted Inventories

• Ensure that the Inventories for the selected date are posted.

• Ensure that the Inventories were entered for the correct Inventory Dates

• Using the keyboard shortcut Ctrl + F / Cmd + F will help quickly jump to items

• Check for unusually high or low quantities compared to previous inventories

• If the item in question exists in more than one inventory location, ensure that it wasn’t double-counted in one of them.

• When values are keyed into the website while referencing pencil-and-paper counts, it is easy to skip a line and shift a lot of values to the incorrect ingredients.

Prepped Item Conversions

• Compare Inventory Counts of Prepped Items to IvA Product Detail

• The prepped items quantities are converted to the base ingredient quantities in the Beginning Inventory and Ending Inventory sections

  • For example, the recipe for Prepped Item “P-Special Sauce” is 1 gallon Mayo, 1 gallon Mustard
    Inventory Count for P-Special Sauce is 2 gallons
    The IvA Product Detail page for Mayo should show the quantity 1 gallon

• If the expected conversion appears incorrect the Decision Logic Administrator may need to make an adjustment or advise recipe procedures.

Changing an Inventory Count

Depending on your user permissions and what needs to be changed, your above-store manager or Decision Logic Administrator may need to assist in changing Inventory counts through the following Inventory Home functions:

• Change Request

  • This is advised for most inventory changes

  • A reason must be provided for the change

  • The change must be approved from the Change Approval page

  • These changes can be tracked to identify items/operations that can be optimized to reduce errors

• Edit

  • This only advised for obvious miskeys

    • For example, 175 was entered instead of 1.75

• Open

  • This is recommended for large changes

  • One or more Inventory Locations were skipped

  • One or more Inventory Locations were not synced via Manager’s Toolbox before posting

  • A large number of quantities entered were one line off

Skipped Inventories

If an Inventory week is neglected for any reason (temporary closure, holiday, illness, etc), Inventory Counts will have NULL values and calculations will assume zeros for COGS Actual and Ideal/Theoretical usage calculations.

• For store closures, we advise as Best Practice to post the same quantities as the prior week, less any waste/spoilage.

• When viewing reporting after any skipped inventory(s) we advise choosing the last dates with beginning and ending inventory entries.

Purchases

Here are some ways to investigate and resolve:

Received Orders

• Date Received

  • The most common cause of growth caused by low purchase amounts is an incorrect or changed Received Date

  • Ensure that all Orders Received in the date range are accounted for

  • The Order History, Cost of Goods Sold, and IvA or Cost & Variance Product Detail pages are the most useful

  • Go to Ordering Home > Manual Receive > From E-Invoice for Electronic Distributors to find E-Invoices that are not received on an order

  • Increase reporting date ranges to search for orders mistakenly received in previous or future weeks

  • Use the COGS Reconciliation by Invoice Date to find any order-invoice discrepancies

    • Any differences can be investigated by comparing COGS Purchases to Invoice Summary and viewed per item using Orders History and PPC Invoice Detail Exports

• Quantity Received

  • Viewing a received order from Ordering Home > Order History, compare ordered quantities to received quantities

  • Review the Purchases section of IvA Product Detail to ensure the correct Inventoried Quantity per Case was received

    • Ensure that Catchweight and Broken Case items have the correct multipliers applied

  • The Received Prices report will display Bid File vs Received $Price. Large differences between the two are often signs that something we awry

• Transfers

  • Use the Ordering Home IUT page to check that all store-to-store product transfers have an IUT created and received

  • Check that the stores, dates, products, and amounts are correct

  • Make sure the transfer is going the right direction

    • If a store is transferring a product out it will show as a negative quantity for the sending store

Bid File Multipliers

If the expected multipliers are not applied to a received order, the Decision Logic Administrator may need to make an adjustment or advise how to receive certain items correctly. Common ways to identify this through the aforementioned pages may reveal discrepancies in

• $ Cost per Case Quantity

• $ Cost per Inventory Unit

• Inventory Units per Case

Waste

Waste Sheet Entries are not included in the Actual Usage calculation and do not cause product growth.

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