Theoretical Usage & On-Hand - FAQs
Overview:
Theoretical Usage calculates the quantity of an Item that should have been used based on the sales or production of the Recipe Items where it is used as an ingredient. COGS-Well can provide theoretical usage calculations for Inventory Items and any Combined, Recipe or Production Items that are counted.
Theoretical On-Hand calculates the quantity of an Item that should be on hand (or in stock) based on its transaction activity since the last time it was counted. COGS-Well can provide theoretical on-hand calculations for Inventory Items and any Combined, Recipe, or Production Items that are counted.
Theoretical Usage and Theoretical On-Hand are referred to collectively as "Theoreticals".
What are "Theoreticals" Used For?
Theoretical On-Hand can be used to assist with ordering decisions. It can also be used to check if there is a variance between the inventory quantity that should be on hand versus the quantity that is actually on hand.
Theoretical Usage is used to determine any variance between the quantity of an Item that should have been used (based on the recipes it is used in and sales), and the quantity that was actually used (based on inventory counts, invoice receipts, and any transfers.
The Theoretical Usage Calculation:
Theoretical Usage is also known as "Usage from Sales". Usage from sales for an item is calculated by finding the Recipe Items it is used in, then multiplying the portion size by the number of times each Recipe Item was sold, for the date range selected. In the below example, the theoretical usage for 3-1 Hamburger Patties is 140 patties:
The Theoretical On-Hand Calculation:
The basic formula for calculating the Theoretical On-Hand is the beginning quantity (your last count entry), + receiving, +/- transfers, - usage from sales (theoretical usage) = Theoretical On-Hand. In the below example, the theoretical on-hand quantity for Tenderloin is 26 pounds.
If you are entering Production or entering Waste counts into COGS-Well, then adjustments for Production and Waste will be included in the Theoretical On-Hand formula:
Ordering, Transfer Requests, and Production Features:
If you are using Ordering with Par Levels or Suggested Quantity Types, COGS-Well calculates a Theoretical On-Hand (Calculated On-Hand) quantity for each item and suggests a quantity to reorder.
If you are using Transfer Requests with Suggested Quantity Types, COGS-Well calculates a Theoretical On-Hand (Calculated On-Hand) quantity for each item and suggests a quantity to request.
If you are using Production with Suggested Quantity Types, COGS-Well calculates a Theoretical On-Hand (Calculated On-Hand) quantity for each item and suggests a quantity to produce.
Reports:
Theoretical On-Hand Report: The Theoretical On-Hand Report reports the theoretical (calculated) quantities on hand for Inventory Items, and for Combined, Recipe, or Production Items that are counted, for a selected Site, and a selected date:
Usage Variance Report: The Usage Variance Report calculates actual inventory usage, theoretical inventory usage, and the variance between the two, over a requested date range. Variances are reported in quantity and dollars:
