Chapter 8 Purchasing and Recieving

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Objectives Describe the role of the purchaser. List the five main tasks of purchasing. Explain the purpose of a specification. Outline the process of selecting a supplier. Relate how a purchase order is used. Describe the three tasks of receiving. continued

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Objectives Determine why proper storage is important in restaurants. Describe the two main tasks of inventory.

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Purchasing and Receiving Purchasing is the buying of goods and services for use in a business Receiving is the process of making sure the items delivered are the items ordered Storage is a safe, secure place in which items are placed until they are needed Inventory is the process of counting and keeping of all items in storage

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Staff In small operations, the owner or manager handles the purchasing In larger operations, purchasing is assigned to individual department heads The purchaser must make sure the operation –has everything it needs –has it in the right amounts –has it at the right time

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Purchasing The five main tasks of purchasing are –developing specifications –determining quality –determining quantity –selecting suppliers –ordering

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Developing Specifications A specification (spec) is a detailed description of a product To develop specifications, the purchaser works with the person or department that needs the product Detailed, accurate specs ensure that the product is the exact item that is needed

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Determining Quality The U.S. Grade Standards provide a common language for describing the quality of food The standards are voluntary Grade A is the top grade All grade levels are wholesome and safe to eat The grade of product needed depends on the intended use

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Determining Quantity Many businesses use a par stock and reorder point system –In stock means on hand in the kitchen or storeroom –Par stock is the maximum amount of a product allowed to be in storage at one time –The reorder point is the minimum amount of a product in storage; when the supply reaches this amount, the product must be reordered

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Perishability Businesses want to keep just enough product on hand to meet customer demand If a product is ordered frequently, smaller quantities may be bought Some suppliers deliver only at certain times Perishable products must be bought in quantities that can be used before they spoil

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Cost-Effective Buying Cost-effective buying is buying the most products at the best quality for the least amount of money –Suppliers may offer discounts for buying larger amounts, but consider shelf life and storage –Buy food in season –Consider delivery costs

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Selecting Suppliers Suppliers are often selected through a bidding process –The purchaser gives product specifications to several suppliers –Each supplier submits a bid, which states what the supplier will charge for the product and any other services the supplier will offer –The purchaser evaluates the bids and selects the best one

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Ordering An order is a list of products that a business wants to purchase A purchase order contains detailed information about the amount, delivery date, and price of the item being purchased A standing order is an order that does not change and should be filled at regular intervals In contract buying, the contract specifies products to be delivered at a guaranteed price

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Receiving Deliveries are received on a receiving dock, unloaded from the truck, and placed in the receiving area During unloading of the shipment, products are checked to make sure they match what was ordered and are in good condition Documentation such as invoices, delivery slips, and credit memorandums are sent to accounting

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Storage Products should be stored as soon as the receiving process is completed Three basic types of storage facilities: –refrigerators –freezers –storerooms

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Storage Facilities All products should be –kept in a clean area –stored at the proper temperature –protected from contamination Repackaged foods must be properly packaged and labeled carefully repackaged for storage Food items should be used in the order they were received (FIFO)

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Reducing Theft To reduce opportunities for theft, –move items from the receiving area to locked storage as soon as possible –restrict access to storerooms

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Inventory Items are made available to employees as they need them, which is called issuing or requisitioning –The employee who needs the items prepares a requisition form –A manager approves the form –The form is given to the storeroom clerk –The clerk issues the items to the employee continued

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Inventory Inventory control is keeping track of the items used –Physical inventory is going into storage areas and counting every item –Perpetual inventory is using computer systems to keep records of the items received and issued

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Relationships with Suppliers Purchasers need to create good relationships with suppliers they can trust and depend on –Establish ground rules for the business relationship with each supplier –Follow business ethical standards

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. The _____ must make sure the operation has everything it needs in the right amounts at the right time. –purchaser Why do specifications need to be detailed and accurate? –to ensure that the product is the exact item that is needed Chapter 8 Review continued

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. _____-_____ _____ means buying the most products at the best quality for the least amount of money. –Cost-effective buying Name three methods of ordering products from suppliers. –purchase order, standing order, contract buying Chapter 8 Review continued

Permission granted to reproduce for educational use only.© Goodheart-Willcox Co., Inc. Products should be stored as soon as the _____ process is completed. –receiving What is the difference between a physical inventory and a perpetual inventory? –A physical inventory requires going into storage areas and counting every item. With perpetual inventory, records are kept on a computer system. Chapter 8 Review