FAQ Variance Investigation

How can I research Variance Issues?

When reviewing variance reporting it is best to research as soon as possible after an inventory is recorded and entered into Decision Logic. 

When users find items with a large variance take the following steps to help find a solution:

  • Find high variance items in Decision Logic 
  • Confirm both beginning inventory and ending inventory values are correct 
  • Review purchases to be sure all product was received at the correct quantities and price
  • Review ideal usage to be sure all product is depleting at the correct quantities (reminder: ideal usage is calculated directly from product mix reporting that is pulled from the POS System, depletion quantities are entered into menu maintenance in DL)
  • If all data entered into Decision Logic is correct and all values are depleting properly take into consideration the following:
    • over portioning
    • under portioning
    • theft
    • waste issues

Below are three frequently asked questions that will help you in investigating Variance.

Why is my Actual Usage higher than Ideal usage resulting in a large variance in units and $?

A large variance indicates either there is an issue with the data that was entered into Decision Logic on one or many of the major data points OR that the stores are over-portioning, incorrectly handling the product, or incorrectly entering inventory and receives.

After validating the data is correct with the steps below, if a large variance persists this is a strong indication of the need for store training on controlling the product prep methods, recording purchasing and inventorying.

  • Are inventory and purchases entered correctly from the entry pages?
  • Are the inventoried and purchased qty converting using the correct multipliers from the Bid File
  • Is the Bid File set up properly?

To solve data issues:

  • Correct any errors in Inventory or Orders Received 
  • Run Updates from DL Updates web page for IVA and TVA on both the beginning and ending inventory weeks.
  • Run COGS update for the current week to address bid file changes at the purchases level for the current week only

(star)Any bid file corrections to MX or Price that need to be applied to purchases beyond the current week require you to request a COGS update by submitting a support ticket with the help desk by visiting our Customer Support Portal or emailing us directly at helpdesk@decisionlogic.co

Why is my Ideal Usage is higher than Actual Usage? 

  • Check that recipe portions are set up to deplete the correct quantity of the ingredient used in the recipe for the menu item.
  • Verify that the quantity sold matches the quantity sold from the POS? 
    Qty sold can be incorrect if you have a store on two menu sets where the menu item exists on both sets. A menu item should only exist on 1 menu set for the store.
    • Navigate to Menu Maintenance to edit menu item
    • Remove the store from the duplicating menu set 
    • Or remove the menu item from one of the menu sets the store is assigned. 

Why is TVA $ significantly off compared to the IVA variance $

This is typically a result of the TVA report being updated for historical weeks via the DL Updates page before a COGS update was made. The TVA report calculates price either off FIFO or Market Value accounting method that is set up for your Cost of Goods calculations. If you change the bid file in a way that impacts how price extends on a product and do not update COGS for previous weeks, the TVA report will calculate incorrectly as it uses the same prices stored in the COGS report.

Best Practice for updating Historical pricing across all Supply Chain reporting:

(star)If you change a bid do not request a historical Cogs update but run a DL Update for your COGS for the current week, followed by running a DL Update for your IVA and TVA update for the weeks prior so that you may correct data in the reports.

(star)We do not recommend running IVA/TVA updates for historical weeks unless you are aware of the changes that have been made at the bid file level. 

(star)Please also see  FIFO Steps for Validation The TvA Theoretical cost should match the IvA Ideal from the above equation.

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For additional questions or assistance please submit a support ticket by visiting the Decision Logic Help Center.