1. © 2011 John Wiley and Sons, Inc. All Rights Reserved Selection and Procurement for the Hospitality Industry Purchasing ANDREW HALE FEINSTEIN AND JOHN M. STEFANELLI E i g h t h E d i t i o n

2. © 2011 John Wiley and Sons, Inc. All Rights Reserved CHAPTER Typical Ordering Procedures 13

3. © 2011 John Wiley and Sons, Inc. All Rights Reserved YOU SHOULD BE ABLE TO: Explain the objectives of storage. Describe the factors needed to achieve storage objectives. Illustrate the process of managing inventory and storage facilities. Generate a stock requisition and describe its use. List important storage-management practices that small hospitality operators should follow.

4. © 2011 John Wiley and Sons, Inc. All Rights Reserved A BUYER’S CONCERNS Obtaining the Right amount At the right time With the right supplier services For the right EP Cost

5. © 2011 John Wiley and Sons, Inc. All Rights Reserved PURCHASE REQUISITION Document listing the products or services needed by someone in the hospitality operation; sent to buyer to find the best deals; typically used for items buyer doesn’t purchase on a regular basis.

6. © 2011 John Wiley and Sons, Inc. All Rights Reserved PURCHASE REQUISITION (CONT.) Disadvantages Too many people involved in deciding types and qualities of products and services Invites backdoor selling Requires time and effort to implement/maintain such a system

7. © 2011 John Wiley and Sons, Inc. All Rights Reserved PURCHASE REQUISITION (CONT.) Advantages Useful training device for department heads who want to become full-time buyers Can relieve a buyer of responsibility for ordering mistakes Can relieve buyer of paperwork Helps provide control of product use in different departments

8. © 2011 John Wiley and Sons, Inc. All Rights Reserved ORDERING PROCEDURES Buyer determines amount to order Buyer prepares purchase order (PO) Buyer sends purchase order to suppliers Purchase order form varies, but basic information the same

9. © 2011 John Wiley and Sons, Inc. All Rights Reserved ORDERING PROCEDURES (CONT.) Placing the order Handing the sales representative the PO Calling in or faxing the order Sending the order by email Sending the order via the Web

10. © 2011 John Wiley and Sons, Inc. All Rights Reserved PURCHASE ORDERS Resembles a purchase requisition. However it is an external document used to procure goods and services.

11. © 2011 John Wiley and Sons, Inc. All Rights Reserved PURCHASE ORDERS (CONT.) Information usually includes Date Transportation requirement Packaging instructions Quantity Item type Unit size Unit price Extended price

12. © 2011 John Wiley and Sons, Inc. All Rights Reserved PURCHASE ORDERS (CONT.) Operations use different number of copies of the PO Supplier -- original Second supplier copy – to use as a bill Third supplier copy—for initialing and to send back to the buyer Buyer copy Receiving clerk copy Requisitioner copy Accountant or bookkeeper copy Head office copy

13. © 2011 John Wiley and Sons, Inc. All Rights Reserved CHANGE ORDER Used if a buyer wishes to alter a purchase order that was recently placed with a vendor; may be a written document, or it could be accomplished with a phone call or email.

14. © 2011 John Wiley and Sons, Inc. All Rights Reserved EXPEDITING Buyer’s effort to monitor suppliers to ensure that products and services arrive at the right time in the right condition Special times – steaks required for a banquet Often used with FFE, since unlike foods or beverages, it is much more difficult to ship and install them

15. © 2011 John Wiley and Sons, Inc. All Rights Reserved STREAMLINING Blanket Order Purchase Order Draft System Supplier’s Forms Standing Order Computerization