Forecasting is an art and science of estimating events in the future and provides the database for decision making and planning. The art of forecasting is the intuition of the forecaster, and the science is the use of past data in a tested model. Both are required to estimate future needs. Forecasting is described as a function of production and constitutes the basis for procurement. Computerized systems often are used to facilitate the forecasting process.
Forecasting not only is a function of production but also is needed for procurement. Food products must be available for producing menu items for customers. The primary result of forecasting should be customer satisfaction; customers expect to receive what they ordered. In addition, the foodservice manager is concerned with food cost; both overproduction and underproduction affect the bottom line.
Overproduction, the production of more food than is needed for service, generates extra costs because the salvage of excess food items is not always feasible. Leftover prepared food spoils easily and requires extreme care in handling and storage. Even though some leftover foods might be salvageable by refrigeration, certain foods may break down and lose quality. An example is re-using chopped tomatoes or chopped lettuce from an earlier production shift. Policies and procedures for the storage of overproduced food items should be well defined and rigorously enforced.
Attempts to reduce overproduction costs by using a leftover high-priced food as an ingredient in a low-cost menu item reduce profits. For example, using leftover rib roast in beef stew, soup stock, or beef hash, all of which could be prepared with less expensive fresh meat, is difficult t justify. In addition to the higher food cost, planning and carrying out these salvage efforts incurs higher labor costs that could have been avoided had overproduction not occurred. Customers often suspect that leftovers are being used, which can be damaging to the image of a foodservice operation.
Underproduction, the production of less food than is needed for service, can increase costs as much as overproduction. Customers will be disappointed if the menu item is unavailable, and they often have difficulty in making another selection. Furthermore, underproduction may involve both additional labor costs and often the substitution of a higher-priced item.
A wise manager will insist that a similar backup item be available when underproduction occurs. For example, in a university residence hall foodservice, if the grilled meat patties run out, an excellent replacement would be frozen minute steaks, quickly grilled. Such a substitution certainly would increase customer satisfaction even though it hurts the bottom line.