Transcript Hospitality

2015 Summer Institutes Level 2
FRMCA Level 2, Chapter 5
Purchasing and Inventory
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Session Objectives
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Define purchasing, selection, and procurement.
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Outline objectives of the purchasing function in a foodservice operation.
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Describe the buyer’s role in a foodservice operation, and explain the
importance of ethical behavior to a buyer.
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List the factors that help determine an operation’s quality standards.
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Identify ways to communicate quality standards, and give examples of
standards a foodservice operation might use.
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Session Objectives continued
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Describe buyer considerations when conducting a make-or-buy
analysis.
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Identify production records used to calculate buying needs
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Outline the process for procuring products and services.
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List factors that affect food prices.
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List proper procedures for receiving deliveries.
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Session Objectives continued
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List guidelines for plating or storing food that has finished cooking.
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Describe perpetual inventory and physical inventory systems.
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Definition of Purchasing
Purchasing is the process of
selecting and buying products and
services for an operation.
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Purchasing Overview
The purchasing process is
everything involved in buying
products and services for an
operation.
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5.1
Determine what an operation
wants and needs to buy.
Identify quality standards.
Order products and services.
Receive deliveries.
Store and issue products.
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Four Goals of Purchasing
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Maintain the right supply of products and services.
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Maintain the quality standards of the operation.
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Minimize the amount of money spent.
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Stay competitive with similar operations.
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Four Goals of Purchasing continued
1. Maintaining Supplies
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Tools to help purchasers buy the
right amount of product:
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5.1
Customer-count histories
Popularity index of items sold
Vendor delivery schedules
Availability of items from vendors
Recognizing outside influences
that might affect an operation
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Four Goals of Purchasing continued
2. Maintaining Quality Standards
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Every item an operation produces must meet the operation’s standards
for quality.
– Consistency is the key to drawing repeat customers.
– Operations must establish quality standards for each item or service.
– Specifications are set by the chef, manager, and/or owner, and are easy to
follow when purchasing brand-name items.
5.1
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Four Goals of Purchasing continued
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3. Minimizing Expenditures
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To minimize spending, an
operation needs to consider:
– Customer-count forecasts
– Available storage capacity for
new product
– Forecasts of future costs of
particular products
5.1
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Four Goals of Purchasing continued
4. Staying Competitive
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For an operation to stay competitive, it must:
– Shop around for vendors who will provide the best combination of
price and service for the operation’s needs.
– Try to get the lowest possible edible-portion (EP) price or as-served
(AS) price.
– Try to get the maximum yield, or the total utilization, from products
purchased.
5.1
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Goods and Services: What Is Being
Purchased
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Food and Beverages are items
that operations actually prepare
and sell.
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Nonfood Items are directly tied
to the sale of food and
beverages.
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Smallwares and Equipment
are items that an individual can
generally move from location to
location easily and that require
replacement fairly often.
5.1
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Goods and Services: What Is Being
Purchased continued
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Technology is used by
management and employees
throughout a modern operation.
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Furniture, Fixtures, and
Equipment (FFE) is a category
also known as capital
expenditures. An operation
might purchase or lease some
of the items in this category,
such as big-ticket appliances.
5.1
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Goods and Services: What Is Being
Purchased continued
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Business Supplies and Services support the management or
marketing of an operation.
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Support Services are tied to the operational aspect of the business.
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Maintenance Services help keep the facility in good shape. Many of
these services are essential to the efficient functioning of an operation.
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Utilities are a major expense for operations. In many areas of the
country, however, operations can choose among competing utility
suppliers. Careful negotiation of the various utilities in a given area can
end up saving an operation money.
5.1
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Buyers: Who Is Doing
the Purchasing?
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In independent or single-unit operations, the buyer of an operation’s
product might be the owner or manager.
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The purchasing structure in chain operations might include an
individual to perform or review all purchasing activities.
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Hotels, large restaurants, and chains use the formal purchasing
method to order goods and services.
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A buyer must know everything about the operation, from the items on
the menu and their current prices to the expected volume of business.
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For an operation to run effectively, buyers must have a full
understanding of the purchasing process.
5.1
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Buyer Ethics
5.1
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Buyers must have integrity.
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Buyers must follow the organization’s code of ethics.
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Ethical codes can help guide a buyer’s behavior when facing a
situation that threatens the honesty of the relationship with the
vendor or with the buyer’s operation.
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Determining Quality Standards
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Quality refers to the value or
worth that customers place on a
product or service.
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Establishing solid quality
standards specifications helps
an operation create the
consistency that customers
expect.
5.2
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Factors That Determine Quality
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The Item’s Intended Use: Knowing how an item will be prepared and
served is the most-influential factor in determining quality standards.
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The Operation’s Concept and Goals: The overall concept and goals
of the operation guides all decisions.
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The Menu: The buyer must specify in the quality standard exactly how
the item is described on the menu.
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Employee Skill Level: If an operation offers items that require
extensive preparation, the operation will need highly-skilled employees.
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Factors That Determine Quality continued
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Budgetary Constraints: Operations in highly competitive markets
may need to include cost limits in their quality standards.
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Customers’ Wants and Needs: It is very important to look closely at
what customers want and why they choose to eat at an operation.
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Seasonal Availability: The seasonal nature of produce and other
items affects price and availability.
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Storage Capacity: An operation’s storage space limits the amount of
product it can purchase, which may then affect the quality of some
menu items.
5.2
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Writing Product Specifications
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Product specifications, or specs, describe the requirements for a
particular product or service that an operation wants to buy.
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Specifications include the details that help a product or service meet
the operation’s quality standards.
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Operations should always document product specifications.
5.2
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Writing Product Specifications continued
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Buyers should always work with approved, reputable suppliers.
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Buyers must be familiar with the operation’s quality standards and
product specifications
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Buyers must communicate standards and specifications to staff
and vendors.
5.2
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Make It or Buy It?
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Buyers conduct make-or-buy analyses to decide if an operation
should make an item from scratch or buy a readymade version.
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To determine whether to make a product or buy it readymade,
consider the total cost of making the item, including:
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5.2
Ingredients
Processing
Labor
Prep time
Equipment and storage needs
Any other costs related to item production
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Calculating Buying Needs
5.2
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Buyers and managers use production records to forecast their
buying needs.
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A production sheet lists all menu items that the chefs will prepare
on a given day.
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Buyers use production sheets to spot signs of stockouts and
overproduction.
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Calculating Buying Needs continued
Production records are used to forecast buying needs:
•One of the most important ways managers try to limit food waste is by
keeping accurate daily food cost sheets.
•Managers keep sales mix records that track each item sold from the
menu. This record shows which items sell well, called leaders, and
ones that don’t sell well, called losers.
•Par stock levels are the ideal amounts of inventory items that an
operation should have at all times:
Par stock – Amount in stock = Amount to be ordered
5.2
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Calculating Buying Needs continued
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Another way to ensure that an operation always has the proper level of
stock on hand is to establish a reorder point, or ROP, for each item.
– A reorder point is like a warning bell—it alerts an operation to make orders
immediately.
5.2
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Procuring Products and Services
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A purchase order is a legally binding, written document that details
exactly what the buyer is ordering from the vendor.
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Buyers can place purchase orders by phone, fax, or online.
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Keeping track of the information on the purchase order helps the
buyer control products and services.
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When a chef believes that a piece of expensive equipment should
be purchased or replaced, the chef must first fill out a requisition and
send it to company headquarters.
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Once headquarters approves the purchase and notifies the buyer,
the buyer can place the order.
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Knowing Food Prices
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A buyer must understand and track the factors that affect food prices.
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Factors that affect a product’s value include:
– Time value: The price retailers pay for the convenience of selecting the
time of delivery from suppliers
– Form value: The savings created when a buyer purchases bulk
quantities of food instead of individually-portioned servings
– Place value: The differences in price of a product depending on where it
needs to be shipped
– Transportation value: The cost of choosing a quick but expensive form
of transport to get goods delivered
– Service value: Additional convenience services that a vendor provides to
its customers
5.2
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Receiving Orders
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5.3
Receiving: Inspecting,
accepting, and, in some cases,
rejecting deliveries of goods and
services
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Receiving Orders continued
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Guidelines for efficient receiving procedures:
– Plan ahead for shipments.
– Inspect and store each delivery before receiving another one.
– Inspect deliveries immediately.
– Record items on a receiving sheet.
– Correct mistakes immediately.
– Put products away as quickly as possible.
– Maintain the receiving area.
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Receivers have the right to refuse any delivery that does not meet
the operation’s standards.
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Plating Cooked Food
Plating: Determining what serving vessel will be used to present the
product, and how the product and accompaniments will be placed on
the vessel
5.3
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Select the right dish for the portion size.
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Maintain a good balance of colors.
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Height makes the plate more attractive.
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Cut ingredients neatly and uniformly.
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Storing Cooked Food
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Wrap food properly to avoid cross-contamination.
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Cool and store food properly to prevent pathogen growth.
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Store food in the correct type of container to prevent contamination
and to protect the flavor.
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Label and date containers to allow identification and rotation.
5.3
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Taking Inventory
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An inventory is a record of all products an operation has in storage
and in the kitchen.
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Physical inventory method requires that the entire stock is physically
reviewed on a regular basis.
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Perpetual inventory method requires employees to record items
when they are received and then when they are used up.
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Issuing refers to the official procedures employees use when taking an
item out of the storeroom and putting it into production.
5.3
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