Cost Of Goods Sold (COGS) Case Study Report

Assessment Task

You are the food and beverage manager at the Clifftop Bar and Grill and you have noticed that your profit is less than expected in recent months.

You engage an inventory consultant to investigate whether the cause could be a stock control issue. The consultant notices that the cost of goods sold (COGS) report for the month of January 2018 indicates discrepancies between the value of inventory captured in records and the actual inventory value. She advises you that the total value of the missing items has increased every week, with a total loss of $2320.00 for the two months.

The inventory consultant looked at the inventory records in more detail and was able to identify that some stock items were not accounted for — according to the records they should be on hand, but they are not to be found anywhere in storage areas.

The items are frozen meat items and imported cheeses. These items are kept in inventory, based on the par levels desired (the quantity of products a restaurant desires to keep on hand at all times).

Based on this information, write a report to the owner of the business that:

1. Provides the background of the situation
2. Identifies the actual and potential risks and their impacts on profitability
3. Indicates how the risks of internal threats to stock control can be mitigated
4. Recommends a technology system for tracking inventory levels, orders, sales and deliveries.
5. Explain how it would improve revenue security.

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