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Updated on 11/23/2018
Direct link to topic in this publication:
iikoOffice 6.2
"What If" Analysis

The “What If” analysis is designed to assess how prices of goods and items influence your profit. For this analysis, the volume of sales as of the selected period is used.

Profit change is the change in the cost of goods plus change in the items revenue.

The cost change is calculated according to the following formula:  
(New Price * Number of sales in survey period) - Cost in survey period

If an outlet operates with VAT separated, then a new price is given without VAT in calculations.

The items revenue is calculated according to the following formula: 
(New Price - Current Price) * Number of sales in survey period

The analysis helps you make important decisions: should you change a supplier or not, should new supply terms be agreed upon, should a meal be discontinued, or an ingredient replaced.

Where Current Prices Come From

In the “What If” analysis, new prices of goods are compared with the currents ones, at which you have bought them. 

Any of the following may be the source of current prices:

  • Price lists. Prices are imported from supplier price lists the validity of which is within the specified period.
  • Purchase invoices. If you do not maintain supplier price lists, you can use purchase invoices registered in iiko as a source. The table shows only the lowest prices.
  • Price lists and purchase invoices. Combines two previous paragraphs.

What Sales Are Analyzed

Iiko analyzes sales in the selected Period based on the following documents: automatic and manual sales records and expenditure invoices.

For the analysis, you can use all of these documents or exclude some of them in the Data source field.

Profit Analysis

Let’s take a closer look at the profit change in terms of the following indicators:

New Prices Of Goods

Suppose a supplier that you regularly purchase food from raises prices.

To learn how your profit would change due to the price rise and make a decision in this regard, follow this:

  1. Go to Reports > “What If” analysis.
  2. Specify the Period you are interested in.
  3. Specify the Source of current prices and their validity period.
  4. In the Data source field, select the documents for the sales analysis.
  5. Uncheck New item prices and markups. The New ingredient prices field remains checked. 
  6. Add items with increased prices to the table. 
    Select them one by one from the list or specify Sales group and click Add
  7. Click Update.  
    The table will have the Current supplier and Sales volume columns populated.
  8. Enter the prices proposed by the supplier in the New price column. 
    The Cost change per each product and overall Profit change would be estimated automatically. 

 
Profit change due to increase in supply prices

Another Supplier Prices

Suppose a new supplier has made a food supply offer. Some prices may be better and some worse as compared to your current supplier. 

To assess your new supplier and decide whether you should purchase from it or not:

  1. Register the supplier in iiko and create its price list. 
    For how to do it, refer to the Supplier Price Lists article.
  2. Go to Reports > “What If” analysis
  3. Specify the Period you are interested in.
  4. Specify the Source of current and lowest prices and their validity period.
  5. Select a new supplier in the Apply list prices field and click Apply. The New prices column will be populated.
  6. Click Update
    The Cost change per each product and overall Profit change would be estimated automatically.

 
Profit change in case you purchase food from another supplier

New Prices Of Items

To check what effect you could possibly gain if you change the prices of your items:

  1. Go to Reports > “What If” analysis.
  2. Specify the Period you are interested in.
  3. Specify the Source of current prices and their validity period.
  4. In the Data source field, select the documents for the sales analysis.
  5. Uncheck the New ingredient prices field. The New item prices and markups field remains unchecked. 
  6. Add items to the table.  
    Select them one by one from the list or specify Sales group and click Add
  7. Click Update
    The table will have the Current and Sales volume columns populated.
  8. Enter the prices of your menu items in the New price column. 
    The Revenue change per each product and overall Profit change would be estimated automatically.

Similarly, you can assess the effect a new item markup has on your profit.

 
Profit change in case you raise item prices

New Prices Of Goods & Items

Suppose a supplier raises product prices. This may cause an increase in prices of the menu items that you cook from these products. 

To learn how such an increase in both food cost and item prices affects your revenue, follow this:

  1. Go to Reports > “What If” analysis.
  2. Specify the Period you are interested in.
  3. Specify the Source of current prices and their validity period.
  4. In the Data source field, select the documents for the sales analysis.
  5. Check the New item prices and markups and New ingredient prices fields. 
  6. Add goods.  
  7. To add menu items that include selected goods as ingredients, click Add dependent items to the table of prices and markups in the short-cut menu.
  8. Click Update.  
  9. Enter New prices of goods and items.  
    Overall Profit change will be estimated automatically, as well as food cost change and revenue change.

 
Profit change in case food cost and item prices rise

You Could Have Saved

On the You could have saved tab, the system estimates how much your venue could have saved if you had chosen the recommended suppliers in the past period.

In the reference period, the system defines a supplier who offers the lowest product price and remembers it as a recommended supplier. If such a supplier still offers the lowest price, it will be used to calculate the cost of product in the survey period.

As a result, the table shows the goods you could have saved on, as well as provides a comparison of actual overall costs and estimated costs subject to the recommended prices.