Managing food service operations to achieve a specific food cost percentage has long been a fundamental principle of the restaurant business. Management bonuses and other rewards are often based on achieving these predetermined goals. Available tools such as menu engineering and contribution margin, although sound in theory, are not frequently used. Demonstrates the use of menu engineering and contribution margin concepts in terms of customers served. Concludes that the goal of any restaurant should be to apply marketing techniques based on menu engineering and contribution margin concepts in order to achieve the highest possible financial results.

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The basic concept of yield management is determining which business will bring in the most revenue on a given date. This requires keeping records of past business as an indication of future business-for example, the likelihood of selling out on a given date, guests' lengths of stay, and the number of rooms a given client plans to book. Shifting some demand from busy dates to slack times can increase revenue, as can eliminating discount categories for sellout dates. Hoteliers can also manipulate groups' minimumstay requirements rather than dicker on room rate alone to maximize revenue. Selling fewer rooms to a group at a great discount at a slack time, for instance, might net greater revenue than selling more rooms at a small discount at a busy time-if the group displaces potential rack-rate business.

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