Assess production and operational costs in a food and drink business
Overview
This standard is about the skills and knowledge needed to assess production and operational costs in a food and drink business. New products, changes to existing products, new technology and the availability of ingredients, materials and resources can all have an impact on the operational costs in a food and drink business. Calculating these costs is essential in ensuring profit margins are maintained and the food and drink business achieves financial success. You will need the skills and knowledge to determine the optimum method of achieving the operational objective and total costs for the product or service. This standard also covers assessing the direct and indirect requirements for resources and materials and calculating the total costs to the food and drink business. This standard is for you if you work in food and drink manufacture and/or supply operations and are involved in assessing production and operational costs in a food and drink business.
Performance criteria
You must be able to:
Determine operational requirements
confirm the objective and specification of the operational
requirements
determine a method for achieving the required operational
objective
identify innovative alternatives to achieving the objective when
problems arise
liaise with colleagues to confirm the preferred method of achieving
the operational objective
check the availability of direct and indirect resources and their
capacity to achieve the required objective to the required
specification
Assess operational requirements
determine the specific requirements for materials and resources
consult information sources to establish and confirm current and
future availability of materials and resources to check continuity
adhere to organisational procedures for the sourcing of materials
and resources if new materials or resources need to be procured
adhere to organisational procedures for the sourcing of quotations
for the procurement of materials and resources
liaise with colleagues to determine the most suitable material or
resource accounting for cost, quality, availability and other factors
important to your food business
Establish costs
calculate the direct cost of carrying out the operational objective to
the required specification
determine and calculate any indirect costs relating to the material
or production process
report costs to relevant people in the food business
provide support and feedback to those responsible for evaluation
and management of costs
Knowledge and Understanding
You need to know and understand:
why it is important to confirm the objective and specification for
the production requirements and how to do this
- how to develop the best operational method of achieving the
required objective and specification
- the importance of adhering to specification requirements and how
to do this
- why it is important to build in some contingency planning when
you are determining operational requirements and calculating
costs
- the methods of communication and information technology
available in your organisation and how to make best use of them
- how to determine the specific direct and indirect costs applicable
to an operational objective
- how to determine the specific requirements for materials and
resources
- the sources of information available on availability and
specification of materials and resources
- the organisational procedures for the sourcing and procuring of
materials and resources, how to adhere to them and why it is
important to do so
- the factors to be considered when determining the suitability of a
material or resource
- how to calculate the total cost of carrying out an operational
objective to a specification
- the areas of the food business operational costs should be
supplied to and how to do this