Chapter 4 Food Purchasing and Receiving Control Principles of Food, Beverage, and Labour Cost Controls, Canadian Edition

Learning Objectives 4.1 Describe how quality & quantity food purchase standards are established. 4.2 List six reasons that standard purchase specifications are important, provide examples of specifications for both a perishable and nonperishable food item. 4.3 Describe the process used to determine the quantity of perishable and nonperishable food to be purchased. 4.4 Determine order quantities using the periodic and perpetual order methods. 4.5 Describe the procedures for purchasing perishable and nonperishable foods at the most favourable prices. 4.6 Describe the various purchasing methods. 4.7 Describe the duties of a receiving clerk, and outline the essential equipment and supplies needed for proper receiving. 4.8 Describe the steps in a standard receiving procedure. 4.9 List the information contained in the receiving clerk’s daily report, and explain the report’s function. 4.10 Explain the difference between directs and stores, and provide examples of each. Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Responsibility for Purchasing Who does the purchasing? Owners Managers Chef Purchaser Steward One person responsible so they can be held accountable Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Perishables & Non-perishables Perishables: those items that are typically fresh foods, relatively short shelf life Non-perishables: longer shelf life Groceries Staples Storeroom items Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Developing Standards and Standard Procedures for Purchasing Quality Quantity Price Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Quality Standards Standard Purchase Specifications: Force to determine exact requirements Useful in menu preparation Eliminate misunderstandings Allows for true competitive bidding Eliminates verbal descriptions each order Facilitate checking food when received Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Food Specifications Sample Black Angus Strip Loin, short cut IMPS number 180 Boneless 25 cm trim Canada AAA Range #2, minimum 5.5 kg, maximum 6.5 kg 1.0 to 2.0 cm fat, except for seam fat Chilled upon delivery Free from objectionable odours, no evidence of freezing Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Quantity Standards- Perishables Market quotation list: a form often used as a tool by food purchasers for Taking daily inventory of perishables Determining suitable order quantities Recording market quotations Selecting vendors Par stock: maximum quantity that should be on hand at any given time Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Quantity Standards- Nonperishables Periodic order method: Amount required for the upcoming period - Amount presently on hand + Amount wanted on hand at the end of the period to last until the next delivery = Amount to order Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Periodic Order Method Periodic order method example: - 9 cans on hand 14 cans required - 9 cans on hand + 10 cans to be left at the end of the period (desired ending inventory) =15 cans to be ordered on this date Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Desired Ending Inventory (DEI) The quantity sufficient to last until the next delivery is received Daily Usage X Number of days in delivery period = Normal usage 2 cans per day X 5 days in delivery period = 10 cans normal usage Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition 10 cans normal usage + 50% safety factor = 15 cans DEI

Perpetual Inventory Method Par stock - Reorder point = Subtotal + Normal usage until delivery = Reorder quantity Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Perpetual Inventory Method Perpetual inventory method example: 20 par stock - 15 reorder point = 5 subtotal + 10 normal usage until delivery = 15 reorder quantity Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Determinants for Maximum Quantity of Perishables on Hand Storage space Limits on total value of inventory prescribed by management Desired frequency of ordering Usage Purveyors’ minimum order requirements Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Suppliers to Foodservice Operators Wholesalers Local Producers Manufacturers Packers Local farmers Retailers Cooperative associations Internet suppliers Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Means of Obtaining Price Quotes Internet/Email Telephone Quotation sheets obtained by mail Information supplied by salespersons Direct computer links with purveyors via the internet or dedicated telephone line Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Centralized Purchasing Advantages: Purchase at lower prices because of volume Desired quality can be obtained, a greater choice of markets Larger inventories, ensuring reliable supply Reduce dishonest purchasing in individual units Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Centralized Purchasing Disadvantages: Each unit must accept the standard item in stock and has little freedom to purchase for its own particular needs Units can’t take advantage of local specials Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Written Purchase Order Advantages include the following: Written verification of quoted price Written verification of quantity ordered Written verification of all goods ordered Written and special instructions to the receiving clerk, as needed Written verification of conformance to product specification Written authorization to prepare vendor invoice for payment Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Written Purchase Order The written Purchase Order form should contain space for the following information: Item Name Spec #, if appropriate Quantity Ordered Quoted Price Extension Price Total Price of Order Vendor Information Purchase Order Number Date Ordered Delivery Date Ordered by____ Received by_______ Delivery Instructions Comments Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Purchasing Methods One-Stop Shopping (One Purveyor) Open Bid Cost Plus Contract Purchasing Food Brokers Standing Orders Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Receiving Standards The quantity delivered same as the quantity on the Market Quotation List and invoice The quality delivered meets establishment’s standard specifications The prices on the invoice match the Market Quotation List The goods are received at the time specified Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Sample Invoice Market Price Meat Co. 300 Market St. Calgary, Alberta To: Bistro Quatre Date: October 3, 20XX Quantity Unit Description Unit Price Amount 13.6 kg Tri-tip;IMPS 185C 22.99 312.66 4.54 kg Veal striploin 344A 27.17 123.35 $436.01 Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Receiving Procedures Verify the quantity, quality, and price for each item Verify invoice with invoice stamp List foods delivered on the Clerk’s Daily Report for that day Forward paperwork to proper personnel Move food to storage or production areas Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

The Invoice Stamp The invoice stamp provides for: Date food received Signature of the receiving clerk Steward’s signature, acknowledging delivery Controller’s verification of calculations on invoice Signatory approval of the bill for payment Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Receiving Clerk’s Daily Report Directs: foods that extremely perishable by nature, purchased daily. For immediate use Considered to be issued on delivery Go directly onto today’s food cost Stores: perishable but have a relatively longer shelf life. Not for immediate use Included on food cost when they are issued Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Training for Receiving The great problem in employing receiving personnel is with the vast amount of knowledge of foods these workers require This may explain why some restaurants do not require quality checks upon delivery Someone has to do it!!! If not your customers will!!! Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Key Terms Bin card, p. 104 Par stock, p. 100 Centralized purchasing, p. 114 Periodic order method, p. 103 Contract purchasing, p. 115 Perishable foods, p. 96 Cost plus, p. 115 Perpetual inventory card, p. 106 Desired ending inventory (DEI), p. 105 Perpetual inventory method, p. 106 Directs, p. 120 Purchase Journal Distribution, p. 121 Food brokers, p. 115 Purchase order, p. 114 Invoice, p. 117 Receiving Clerk’s Daily Report, p. 120 Invoice stamp, p. 119 Reorder point, p. 107 Market Quotation List, p. 100 Reorder quantity, p. 108 Nonperishable foods, p. 96 Standard purchase specifications, p. 98 One-supplier buying, p. 115 Standing orders, p. 115 Open bid, p. 115 Stores, p. 121 Par, p. 100 Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

Chapter Web Links NCR- Aloha POS software http://www.ncr.com/products/restaurant/pos-software Micros POS software www.micros.com/AboutUs/Locations/Offices.aspx?country=Canada Canadian Food Inspection Agency: www.inspection.gc.ca/english/toce.shtml Canadian Meat Business: www.meatbusiness.ca/ Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

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