New Meal Plan Structure - FAQs
Responses to your questions about the new "Base Cost Reduction" debit meal plan structure
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Documents from spring 2013:
Q: Why is the "base cost" for all meal plans the same?
A: The "base cost" is spread across all students on meal plans because the items reflected in the base cost do not markedly vary with the frequency of visits or level of purchases. For instance, Campus Dining's costs for equipment, maintenance, technology, employee uniforms, non-disposable supplies, administrative support, insurance, labor and benefits, and even utilities would not be appreciatively more for a student on A than for a student on D.
In researching debit meal plans, the Meal Plan Advisory Committee looked at nearly 20 debit dining schools. About half of these had plans like Oxy's (then) existing plans, the other half had a set base cost across all plans, like Oxy's new plans. None that we found had a base cost that was on a sliding scale. Schools with a base cost reduction (including those that switched from plans similar to Oxy's) reported overall better understanding of their meal plan system. Below are three schools with meal plan structures comparable to Oxy's new system:
A: Meal plan C has proportionately more buying power than plan D, in that it costs 11% more, but yields 26% more buying power. NOTE: Vending is included in the calculation - you may always choose to use vending at face value in the machines, or with a 50% discount in the dining facilities.
Q: What prices do rollover accounts pay in the dining facilities?
A: Rollover accounts fall into two categories:
1. Prior Years’ Rollover Funds: Are spendable at posted prices. These are funds from any prior academic year. The Oxy academic year runs from July 1 through June 30 of the following calendar year.
2. Current Year’s Rollover Funds: Are spendable at the 50% discount. These are qualified funds from plan A or B of fall of the current academic year that roll over to the spring of the current academic year.
Q: What is the financial impact of the proposal?
A: The overall financial impact for the student body and the College is designed to be net neutral. Individual students may be affected differently by the change.
Q: Then why do it?
A: Via a customer satisfaction survey in fall of 2010, Oxy students gave their dining service high marks for food and service quality, but relatively low marks for meal plan value. The Meal Plan Advisory Committee was formed to address the issue. Over the course of the Meal Plan Advisory Committee's research and analysis it became evident that a system of an up-front fee with corresponding discounts on every purchase would be better accepted than the existing system. For a more detailed description of the research and analysis the committee performed, see the link to the full proposal (above). We believe this new system promotes a clearer understanding of the costs involved in college dining services, and creates a meal plan structure that is more transparent and understandable to students and families.
Q: Why are first year students ineligible for meal plan D?
A: First, please keep in mind that the overall costs of an Oxy education - as well as financial aid packages - are based on the cost of meal plan B. Dining together is an important part of the overall co-curricular experience that helps define Occidental’s highly residential community. In the first year students develop their social networks, and much of this process occurs while dining. On the larger plans students are able to try out all dining venues and establish the dining pattern that best suits them. Meal Plan D is designed for students who eat a good portion of their meals off campus - first years are not expected or encouraged to do this.
Q: How much are food items marked up in the dining facilities?
A: Campus Dining is budgeted for a 38% Cost of Goods Sold (COGS). This means that for every dollar taken in, Campus Dining may spend 38 cents on food and disposable supplies. This translates to a markup of 2.632 (263.2%). These are the posted prices, not discounted prices. For a more detailed description of the Campus Dining budget, see the link to the full proposal (above).
Q: How does this markup compare to other college dining services?
A: Oxy's markup is considerably lower than average, many schools run a COGS percentage of 25% - 33%, which translates to markups of 300% - 400%.
Q: I find this a bit confusing, because if the students on meal plan A have more money it would stand to reason the are purchasing more food, thus more labor goes into preparing and serving their food, more utilities go to storing and preparing the food they will purchase and more non-disposable supplies are used on food they will eat. So please explain to me why we should all pay the same base cost
A: There are many facets to your question, and many possible examples. Labor costs are a key factor. Labor comprises 40% of all Campus Dining costs and 65% of all fixed costs. Students who have more money to spend may or may not incur more labor costs. Frequency of purchases is one element, but price of purchases and the labor involved is another. For instance a student buying sushi incurs a high price at the cash register, but there is much less labor and other fixed costs associated with that product, because it is purchased from an outside supplier. Conversely, a student on plan D may purchase very frugally - homestyle at most meals - but homestyle preparation has a high labor cost. Another aspect of labor involves the hours of dining facility operations. Peak time labor is the most productive labor, in that each employee serves many customers. Labor at off-peak hours is a service primarily to residents, and we feel it makes sense to spread labor costs equally among everyone who enjoys those dining opportunities.
Q: Why is college dining so expensive?
A: College dining services (especially union employers like Oxy) offer better wages and benefits than the overwhelming majority of food service operations. Hours of operation and services are also extended to beyond what retail food outlets would be able to offer and stay in business. In addition, since student customers are residential, college dining services must offer a wider variety of food and beverage options, which increases costs of labor, equipment and storage compared to non-residential food service operations.
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