Transcript Title of Chapter - Resource Sites

WELCOME
CHRM 2480
Inventory & Purchasing
Agenda
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Ground Rules
Warm Up Activity
Syllabus Review
Purchasing Website
NRAEF ManageFirst Program
Chapter One – Introduction to Inventory &
Purchasing
Ground Rules
• Be on time – start on time
• All cell phones, pagers and IPods should be
turned off during class
• No Internet use during class, unless part of
classroom activity
• Appreciate other points of view
• Respect others’ desire to learn
• End on time
Information Card
• Please fill out the following information
on the index card
– Side ONE
• Name
• Phone
• Email Address
– Side TWO
• Business affiliation & current position
• Hospitality industry background
Warm Up Activity
• Break into pairs
• Interview each other – 2-3 minutes each
person
– Name, Occupation, Why are you taking
Purchasing Class, etc……
• Introduce each other to the group
Syllabus Review
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Course Information
Course Assessment
Schedule of Assignments
Projects (Individual & Group)
Attendance Sheets
Website
• http://resource.mccneb.edu/ICA/CHRM2480
NRAEF ManageFirst Program
Competency Guide
IS REQUIRED FOR THIS COURSE
How can this book help me?
Part of a certificate program
Industry-driven
Resume builder
Institute for the Culinary Arts – Metropolitan Community College
NRAEF ManageFirst Program
Competency Guide
IS REQUIRED FOR THIS COURSE
Who is the NRAEF?
Educational arm of the
National Restaurant Association
Bridge between academia and
industry
Work with over 60,000
restaurant, hospitality and
foodservice members companies
Institute for the Culinary Arts – Metropolitan Community College
NRAEF ManageFirst Program
Competency Guide
IS REQUIRED FOR THIS COURSE
Competency Guide Content
Management-focused
Application-based, not just
theory
Professional Profiles give
you a “sneak peek” into the
field
“Real world” activities
help build job skills
Institute for the Culinary Arts – Metropolitan Community College
NRAEF ManageFirst Program
Competency Guide
IS REQUIRED FOR THIS COURSE
How will this certificate help me?
Validated by over 200
restaurant, foodservice and
hospitality organizations
Resume builder
Tangible accomplishment
Can give you a hiring
advantage over peers who
didn’t use ManageFirst
Institute for the Culinary Arts – Metropolitan Community College
ManageFirst ProfessionalTM (MFP®) Credential
The MFP credential recognizes students as having the academic and
practical knowledge they need to succeed in the restaurant, foodservice,
and hospitality industry.
To earn the MFP credential, students must:
•Pass four Core Credential exams and one Foundation/Elective exam
•Provide documentation for 800 hours of industry work experience
MCC & ICA
NRAEF ManageFirst Core Credential Topics
CHRM 2475 Leadership: Hospitality & Restaurant Management
CHRM 2460 Cost Management: Controlling Foodservice Costs
CHRM 2470 Supervision: Human Resources Management & Supervision
CHRM 1020 Sanitation: ServSafe Food Safety
NRAEF ManageFirst Foundation Topics
CHRM 2480 Purchasing: Inventory and Purchasing
CHRM 1140 Food Production: Food Production
CHRM 2350 Nutrition: Nutition
Let’s Take a Break
Please be back in 10 minutes
Introduction to Inventory and Purchasing
1
OH 1-14
1-14
 Inventory and Purchasing
Chapter Learning Objectives
 Define purchasing, procurement, and product
selection.
 Outline the objectives in the purchasing function.
 Describe the importance of maintaining an
operation’s competitive position.
 List the types of goods and services that might
be purchased by a foodservice organization.
OH 1-15
Purchasing vs. Procurement
 Purchasing – to obtain products and services of
a desired quality at a desired price.
 Procurement – the entire process by which
products and services are selected based on
quality and cost, to include: what products and
services are needed, the quality specifications,
when the items will be needed, from which
vendors you will purchase, managing the
contracts, as well as establishing all the
purchasing, receiving storing and issuing
policies.
OH 1-16
Franchise vs. Independent
 Franchise – a business purchased from a
company along with the right to use that
company’s name, logo and products.
 Provides for purchasing through franchisor’s central
commissary
 Independent – stand alone operation
 Cooperative buying or co-op buying occurs when
independent operators combine their purchasing
power to cooperatively purchase all goods and
services as a collective group in order to get lower
pricing
OH 1-17
Economies of Scale
 Franchise owners may purchase either through
their commissaries or through approved vendors
 Independent owners may purchase through a
co-op or independently
 Profit is earned after all operating expenses
have been paid by either operation
OH 1-18
Goals of the Purchasing Function
OH 1-19
1.
Maintain adequate supply.
2.
Maintain quality standards.
3.
Minimize investment.
4.
Maintain an operation’s competitive position.
5.
Obtain the lowest possible edible portion (EP) or as
served (AS) price.
Purchasing Impacts
The availability of items for sale:
 Too few items means product outages
 Too many items means spoilage, waste,
and theft
OH 1-20
Maintain Adequate Supply
 Utilize customer count histories.
 Sources of data include:
 The point-of-sale (POS) system
 Guest checks
 Physical counts
 Count customers by day part.
OH 1-21
Maintain Adequate Supply continued
 Monitor popularity index of items sold.
 The popularity index measures the popularity
of a specific menu item in relation to other
items in its category.
 The popularity index also measures the
popularity of one menu category relative to
other categories.
OH 1-22
Maintain Adequate Supply continued
Additional areas of concern include:
 Vendor delivery schedules
 Availability of items from vendors
 External factors that can influence item sales
OH 1-23
Maintain Quality Standards
Foodservice managers maintain quality by:
 Following the operation’s specifications
(specs) on each menu item or ingredient
purchased
 Clearly communicating these standards to
current and potential vendors
OH 1-24
Maintain Quality Standards continued
 Customers expect the
same quality product
each time they visit
their favorite
foodservice
operations.
OH 1-25
Minimize Investment
 Tying up excessive dollars in inventory can
damage a foodservice operation by restricting
the amount of cash available for bill payment.
 Ideal inventory levels are directly related to cash
availability and to storage capability.
OH 1-26
Minimize Investment continued
 In most cases, prices increase rather than
decrease. As a result, effective foodservice
managers:
 Minimize investment by purchasing the maximum
amount of quality product available at the minimum
price possible.
 Negotiate reduced prices for large quantity
purchases.
OH 1-27
Maintain an Operation’s Competitive
Advantage
 Shop around for best pricing
 Choose vendors who:
 Deliver frequently
 Deliver at convenient hours
 Can deliver in an emergency outage situation
 Provide flexible payment options
 Deliver consistent quality
OH 1-28
Obtain the Lowest Possible EP or AS Price
 EP = Edible portion price
 AS = As served price
 EP and AS refer to the price of an item after all trim
and waste has been taken into account. Example:
peeled, cubed potatoes
 AP= As purchased price
 AP refers to the price of an item before any trim or
waste are considered. Example: unpeeled, whole
potatoes
OH 1-29
Comparison of AP and EP (AS) Methods
OH 1-30
Mismanaging the Purchase Function
 Leads to product outages
 Results in lost sales
 Alienates customers
 Ties up excessive amounts of cash
 Increases operating (food and beverage) costs
OH 1-31
What to Buy
Foodservice managers buy many items including:
 Food items
 Alcoholic beverages
 Nonalcoholic
beverages
 Nonfood items
 Furniture, fixtures, and
equipment (FF&E)
 Business supplies and
services
 Support services
 Maintenance services
 Utilities
OH 1-32
Buying Food Items
OH 1-33
 Meat
 Fish
 Poultry
 Dairy
 Eggs
 Produce
 Processed foods
 Dry and canned
goods
Buying Alcoholic Beverages
 Spirits
 Beer
 Wine
OH 1-34
Buying Nonalcoholic Beverages
 Soda
 Coffee
 Tea
 Juice
 Bottled water
OH 1-35
Buying Nonfood Items
 Linens and uniforms
 China and glassware
 Bar supplies
 Paper goods
 Cleaning supplies
 Menus and
beverage lists
 Candles
 Flowers
 Music and entertainment
 Kitchen utensils and
supplies
OH 1-36
Buying Furniture, Fixtures, and Equipment
 Tables, chairs, and
barstools
 Lighting fixtures
 Bars
 Cooking equipment
OH 1-37
 Refrigeration equipment
 Plumbing fixtures
 Heating, ventilation, air
conditioning (HVAC)
 Entertainment pieces
Buying Business Supplies and Services
 Office equipment and
supplies
 Cash registers
OH 1-38
 Credit card processors
 Financial and legal
services
 POS systems
 Insurance
 Computers
 Marketing and
advertising
Buying Support Services
OH 1-39
 Linen and uniform rental
 Music services
 Waste removal
 Pest control
 Flower services
 Parking and valet
services
Buying Maintenance Services
 Cleaning services
 Carpentry
 Plumbing repair
 Equipment maintenance
 HVAC repair
 Equipment repair
 Groundskeeping
 Equipment replacement
 Painting
OH 1-40
Buying Utilities
 Gas
 Sewage services
 Oil heating
 Telephones
 Electricity
 Internet access
 Water
OH 1-41
How Would You Answer
the Following Questions?
1.
2.
A (popularity/frequency) index can be used to help
estimate how many of a specific menu item are likely
to be sold.
Which of the following is not a goal of the purchasing
function:
A.
B.
C.
D.
3.
4.
OH 1-42
Obtain the lowest possible EP price.
Maintain adequate supply.
Maximize investment.
Maintain quality standards
A goal of a quality purchasing program is that of
maintaining an operation’s __________ advantage.
The cost of most AP food products is higher than their
AS cost. (True/False)
Chapter Learning Objectives—
What Did You Learn?
 Define purchasing, procurement, and product
selection.
 Outline the objectives in the purchasing function.
 Describe the importance of maintaining an
operation’s competitive position.
 List the types of goods and services that might
be purchased by a foodservice organization.
OH 1-43
Key Term Review
 As purchased (AP)
 Cooperative or co-op
 As served (AS) price
 Covers
 Cash position
 Customer count
price
 Competitive
advantage
OH 1-44
buying
history
 Economies of scale
Key Term Review continued
 Edible portion (EP)
price
 Franchise
 Popularity index
 Procurement
OH 1-45
 Product selection
 Profit
 Purchasing
 Vendor
Next Week
 Read Chapter Two
 Recipes Due
 5 total recipes
 Units of Measure Worksheet
 Group Presentation work
OH 1-46