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

2. Learning Objectives After reading this chapter, you should be able to:
4.1 Describe how quality and quantity standards for food purchases are established.
4.2 List six reasons that standard purchase specifications are important and provide examples of specifications for both a perishable and a 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.

3. Responsibility for Purchasing
Who does the purchasing?
Owners
Managers
Chef
Steward
One person responsible so they can be held accountable

4. Perishables & Non-perishables
Perishables: those items that are typically fresh foods, and have a relatively short shelf life
Non-perishables: those food items that have a relatively longer shelf life
Groceries
Staples
Storeroom items

5. Developing Standards and Standard Procedures for Purchasing
Quality of food purchased
Quantity of food purchased
Prices at which food is purchased

6. Standard Purchase Specifications
They force owners or managers to determine exact requirements in advance
They are often useful in menu preparation
They eliminate misunderstandings between stewards and purveyors
Allows for true competitive bidding
Eliminates need for detailed verbal descriptions
They facilitate checking food as it is received

7. 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

8. Market Quotation List
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

9. Periodic Order Method 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

10. 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

11. 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
10 cans normal usage +
50% safety factor =
15 cans DEI

12. Perpetual Inventory Method
Par stock
- Reorder point
= Subtotal
+ Normal usage until delivery
= Reorder quantity

13. Perpetual Inventory Method
Perpetual inventory method example:
20 par stock
- 15 reorder point
= 5 subtotal
+ 10 normal usage until delivery
= 15 reorder quantity

14. 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

15. Suppliers to Foodservice Operators
Wholesalers
Local Producers
Manufacturers
Packers
Local farmers
Retailers
Cooperative associations

16. Means of Obtaining Price Quotes
Telephone
Fax
Quotation sheets obtained by mail
Fax modem
Information supplied by salespersons
Direct computer links with purveyors via the internet or dedicated telephone line

17. Centralized Purchasing
Advantages:
Foods and beverages can be purchased at lower prices because of volume
Desired quality can be obtained more readily because the steward has a greater choice of markets
Foods can be obtained that meet specs
Larger inventories can be maintained, ensuring reliable supply to individual units
Possibility of dishonest purchasing in individual units are greatly reduced

18. 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
Menus are ordinarily standardized, limiting the individual unit managers’ freedom

19. Written Purchase Order
Advantages include the following:
Written verification of quoted price
Written verification of quantity ordered
Written verification of the receipt 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

20. 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

21. Purchasing Methods One-Stop Shopping (One Purveyor) Open Bid Cost Plus
Contract Purchasing
Food Brokers
Standing Orders

22. Receiving Standards
The quantity delivered should be the same as the quantity listed on the Market Quotation List and the invoice
The quality delivered should conform to the establishment’s standard specifications
The prices on the invoice should match those circled on the Market Quotation List
The goods are received at the time specified

23. Sample Invoice
Meats R’ Us 777 Cow Pasture Way Calgary, Alberta To: Bistro Quatre Date: October 3, 20XX Quantity Unit Description Unit Price Amount 20 lbs. Beef tenderloin lbs. Leg of lamb $432.00

24. Inventory Control
Regardless of the methods used by employees to requisition food and beverage products, or management to issue these, inventory levels will be affected.
It will be your responsibility and that of your purchasing agent to monitor this movement and purchase additional products, as needed.
Re-stocking the inventory is critical if product shortages are to be avoided and if product necessary for menu item preparation is to be available.

25. Inventory Control
Operators must be careful not to overload storage capacity. Increased inventory of items generally leads to greater spoilage and loss due to theft.
 Shelf life is the amount of time a food item retains its maximum freshness, flavour, and quality while in storage. The shelf life of food products varies greatly.
 The cost to the vendor for frequent deliveries will be reflected in the cost of the goods to the operator.

26. Determination of Inventory Levels
Storage capacity
Item perishability
Vendor delivery schedule
Potential savings from increased purchase size
Operating calendar
Relative importance of stock outages
Value of inventory dollars to the operator

27. Receiving Procedures
Verify the quantity, quality, and price for each item conforms exactly to the order placed
Verify invoice with rubber invoice stamp
List foods delivered each day on the receiving Clerk’s Daily Report for that day
Forward paperwork to proper personnel
Move food to appropriate storage areas

28. The Invoice Stamp The invoice stamp provides for:
Verification of the date food received
Signature of the receiving clerk who vouches for the accuracy of the order
Steward’s signature, acknowledging delivery of food items
Food controller’s verification calculations are correct on the invoice
Signatory approval of the bill for payment by an authorized individual before a check is drawn

29. 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

30. 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!!!

31. Key Terms Bin card, p. 105 Par stock, p. 101
Centralized purchasing, p. 115
Periodic order method, p. 104
Contract purchasing, p. 117
Perishable foods, p. 96
Cost plus, p. 117
Perpetual inventory card, p. 108
Desired ending inventory (DEI), p. 106
Perpetual inventory method, p. 107
Directs, p. 122
Purchase Journal Distribution, p. 124
Food brokers, p. 117
Purchase order, p. 116
Invoice stamp, p. 122
Receiving Clerk’s Daily Report, p. 122
Invoice, p. 119
Reorder point, p. 108
Market Quotation List, p. 101
Reorder quantity, p. 110
Nonperishable foods, p. 97
Standard purchase specifications, p. 99
One purveyor buying, p. 116
Standing orders, p. 117
Open bid, p. 117
Stores, p. 123
Par, p. 101

32. Chapter Web Links
Comtrex POS software:
Restaurant Plus:
Canadian Food Inspection Agency:
Canadian Meat Business:

33. Copyright
Copyright © 2010 John Wiley & Sons Canada, Ltd. All rights reserved. Reproduction or translation of this work beyond that permitted by Access Copyright (The Canadian Copyright Licensing Agency) is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons Canada, Ltd. The purchaser may make back-up copies for his or her own use only and not for distribution or resale. The author and the publisher assume no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information contained herein.