Term
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Definition
fruits, meats, refrigerated, ect
i. Should be purchased in small amounts frequently
1. Price and supply varies
2. Use informal methods of buying
3. Never pay cash because no one will extend their credit
ii. Daily Inventory is required
iii. Refrigerated and freezer space is critical
iv. Usually bought from open market; whatever is available
1. Visit market when possible or call
v. Forecast
vi. Waste and spoilage: calculate into costs but if you purchase properly their won’t be any |
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Term
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Definition
canned, bottled, packaged, anything in dry storage
use formal and informal methods to purchase: bid pricing and volume buying
extended shelf life --> dry storage space avaialble, min and max ordering facots, turn time
10-12% of total square footage is given to dry storage space |
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Term
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Definition
| anything that sits on the shelf for 90 days or longer costs 2% of its original cost |
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Term
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Definition
| buy a large quantity of something really cheap and the 2% monthly cost does not over power it |
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Term
| systems to track items : Physical Inventory |
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Definition
| lists and counts all food in the kitchen, refridgerators and in storage. |
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Term
| system to track items perpetual inventory (running) |
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Definition
system maintains items on going and tracks what items come in and what items go out (done daily)
physical and perpetual inventory never match up |
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Term
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Definition
minimum level of inventory to carry production between delivery dates
check constantly, keep updated, anyone can make order, reduces spoliage, reduces theft and dollar investment, allows you to handle demand |
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Term
| 4 main goals of food purchasing |
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Definition
1. Have food items on hand when needed
2. Purchase food for intended purpose
3. Buy Low
4. Keep Inventory Low |
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Term
| Open Market (purchasing method) |
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Definition
(Informal, verbal agreement) everyone uses it, choose the purveyors you do business with, recieve price quotas
price is what drives the decision
used often for purchases perishables
a: easy to use
d: limits the buyer to whatever is available in the market at the time of purchase
* purveyors require you to have a minimum drop you can spend |
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Term
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Definition
(fixed bid)(formal): used in volume production and works best for staple items (does not work for perishables)
advantage: gets the best price and a steady supply of goods; guarantees a set price, give you the ability to buy low
disadvantage: involves a lot of hands on labor (cumbersome) |
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Term
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Definition
| informal, most often for perishable items |
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Term
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Definition
formal, bid on supplying select goods to a company. Company agrees to buy all goods from this vendor for a given period of time
a: increased competition and lower prices, reduced cost of inventory, spec and order processing
d: potential gradual price increase and decrease in competition, limited number of vendors with whom the operation conducts business |
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Term
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Definition
formal, takes place in writing: negotiate with vendor, they usually give a lower price and the buyer will pay less in the long run
a: some prices that fluctuate frequentitly will remain the same for the buyer beecause of the contract even if the price in the market is higher |
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Term
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Definition
| Informal, group of operators to agree to purchase products together in order to recieve price reduction on volume purchases ex. multiple restaurants buy from same supplier |
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Term
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Definition
informal --> costco, sames club
a: reduces overhead by buying in bulk |
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Term
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Definition
informal --> recieves orders the day the product foes into production
a: keeps inventory low and assets liquids
d: takes time to forecast what food will be needed for each day, may be hard to find a vendor that delivers each day |
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Term
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Definition
hire guys to come everyday to make sure your operation isnt going over or under min-max inventory
a: FIFO your fridge, frequently used for daily products
d: expensive
expensive
FIFO |
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Term
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Definition
| description of an item stated in such a way that the exact requirements are understood by both buyer and seller, common language between buyer and seller |
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Term
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Definition
| clear, concise, simple --> compiles with standards, does not omit any essential information, leaves no room for misintrpetations |
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Term
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Definition
1. common or trade name
2. unit/container the price is quoted on
3. name size weight of basic unit
4. amount to be purchased |
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Term
| information on a spec require (5) |
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Definition
| name of item, intended use, unit size, packaging information (MAP) and other |
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Term
| Monthly Storeroom Difference |
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Definition
| Opening Inventory + Purchases – Issued Food |
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Term
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Definition
| 1. price and supply varies 2. use informal methods of buying 3. never pay cas because no one will extend there credit |
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Term
| considerations for making purchases |
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Definition
1. food purchasing is determined by the menu
2. 2. Management decides upon foods that are readily available, foods that meet target needs, buying things that are attainable |
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Term
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Definition
| the more you buy the lower the price |
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Term
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Definition
| most frequently stolen items in the world so physical inventory is very importnat |
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Term
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Definition
Have foot items on hand when needed
1. forecasting simplest form - use sales history
2. staple items used daily
3. take daily inventory |
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Term
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Definition
ii. Purchase food for Intended Purpose
1. Management makes the decision of which product to use based on the type of operation and market demographics. Mgmt never wants to stray from the marketing plan
2. Items that are purchased for specific recipe and don’t end up being used can cost an operation in 3 ways
a. Food costs
b. Variation in consistency
c. Customer loyalty and loss of business |
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Term
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Definition
| buy low - find the best cost on food products and use the approporiate purchasing method |
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Term
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Definition
iv. Keep Inventory Low
1. Proper purchasing allows minimal investment in product in order to keep assets liquid
2. Diligent inventory purchasing methods for products is required |
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Term
| sealed bid: how it is used effectively |
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Definition
iii. How it is used effectively:
1. Forecasts requirements for extended periods
2. Prepares detailed specifications for each item requested
3. Required to have less variation
4. Consolidate: buy all items from the same buyer if buying the same products→ leads to you having buying power |
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Term
| sealed bid: invitation to bid |
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Definition
to bid on a specification you must give a price quote on the product.
1. The bid is returned in a sealed envelope
2. It consists of a contract in writing: guaranteed the product will be delivered for a specific time at a certain place |
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Term
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Definition
1. Buyer prepares specs
2. Spec sent to the qualified suppliers
3. Forecast requirements for extended periods
4. Sealed responses delivered to buyer
5. Contract awarded |
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Term
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Definition
| provides product consistency and increases prices of products |
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Term
| 5 factos that effect purchasing |
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Definition
1. type and image of establishment
2.style of operation and system of service
3. occasion for which the item is needed
4. amount of storage abialble
5. financial resources and buying policies of the organization |
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