Requisition

Written orders to withdraw items from storage

Purchase Requisitions

Forms that specify the products to be reordered, quantity need, & when they are needed

Purchase Order (P.O.)

Paper or electronic form used to order food/other supplies from suppliers

Purchase Record

Paper or electronic record of all incoming shipments from suppliers, typically used in small food ops

Delivery Invoice

the supplier's bill indicating the products there were delivered, their quantity & prices, & total amount owed

Product specifications

a detailed description defining the quality, size, weight, and other factors desired for a particular item

Convenience foods

foods that have been manufactured/processed to some extent so that less on-site labor is necessary to prepare them

Make-or-buy analysis

study done to determine if it's less expensive to prepare products on-site or to purchase products of the same quality from suppliers

What is Lead-Time Quantity?

amount of a particular product that will be taken from inventory & used between the time the product is reordered & the time it's delivered

What is Safety Stock?

the amount of product needed in case of emergencies, spoilage, or unexpected delays in delivery

What is Perpetual Inventory?

an inventory system that allows managers track items in storage on an ongoing basis.  Managers know the amount of inventory in storage at all times

What is Physical Inventory?

an inventory system that doesn't track what is added/subtracted from inventory on an ongoing basis.  Count is usually done at the end of each month.

Why do some operations use a

minimum/maximum ordering system?

• To make sure inventories are kept at optimal levels
• It helps managers determine when & how many products to purchase

1. What is minimum quantity?

2. What is maximum quantity?

1. minimum is the amount of inventory that should not fall below this level, when reach this level more product needs to be ordered

2. maximum is the greatest # or amount of a product that should be in stock at any given time

What is PAR LEVEL?

the minimum amount of a product that should always be in inventory

1. What are House Brands?

2. What are Call Brands?

1. House:  no specification on what brand of liquor the guest wants

2. Call: the guest request a liquor by name

1. What is e-commerce?

2. In-house software is...

1. e-commerce is the buying & selling of products & services ove the Internet

2. inexpensive, cost-effective software that can help managers w/ many preproduction activities

1. What is inventory?

2. What is inventory turnover rate?

1. The amount of food, beverages, and other supplies on hand

2. The number of times in a given period that inventory is turned into revenue

Just-in-time (JIT) inventory is...

the process if keeping only emergency quantities of products on hand & ordering & receiving the majority of F&B "just in time" to issue & use them.

**this system can reduce need for excess storage space, decrease loss from spoilage/theft, & free funds from being tied up in storing unnecessary inventory**

What one phrase summarizes the importance of purchasing?

Purchasing directly affects the bottom line!

1. When F&B employees need food, beverages, and other supplies to prepare menu items, what must they do first?

2. What happens afterwards?

1. send requisitions to storeroom personnel

2. THEN, storeroom personnel issue the requested products

What 3 steps are taken in order to replenish storeroom inventory?

1. Storeroom personnel must send purchase requisitions to purchasing dept.

2. Purchasing dept. orders product from suppliers, through either P.O. or purchase record

3. Copies of orders are given to receiving & accounting personnel

What 2 things occur when suppliers deliver the product?

1. Suppliers deliver to the receiving area & give receiving personnel a delivery invoice

2. Receiving personnel check delivery against their copy of P.O. & check for quality  & damage

Once the delivered products have been checked & accepted what 2 actions must be taken?

1. Receiving employees must transfer products to the proper storage area

2. Must send the delivery invoice to the accounting dept

What happens after the accounting dept. receives the delivery invoice?

They process the necessary documents and pay the supplier

What are 2 reasons why purchasing is important?

1. F&B ops must purchase food, beverages, and other supplies to produce & sell food & beverage items

2. An operation can save or lose money based on how effective its purchasing process is

(too few items can lose sales & guests, too much means money is tied up in unnecessary inventory)

What are the 4 Goals of a Purchasing Program?

1. Buy the Right Product

2. Obtain the Right Quantity

3. Pay the Right Price

4. Deal with the Right Supplier

Buy the Right Product

1. In order to buy the right product managers need to give the suppliers....

2. The quality level necessary for a particular product is determined in part by what?

1. product specifications

2. the product's intended use

What does the term make-or-buy decision mean?

would it be cheaper to make product on-site or purchase from the supplier ready-made

Why is it so important to purchase F&B products in the right quantities?

Cash flow is affected if inventory levels are too high; loss of sales and guest dissatisfaction may result if inventory levels are too low

Par level equals _______  ______ plus the _______ ______ level of any given product.

Lead-time quantity

safety stock

What factors affect purchase quantities?

*Changing prices                          *Minimum order requirements 

*Available storage facilities           *Order costs

*Storage & handling costs              *Transportation & delivery

*Waste & spoilage concerns                        problems

*Market conditions

*Quantity discounts

*Theft

What products should be purchased for immediate use & are usually purchased several times a week?

Perishable products such as produce, bakery goods, and dairy items

How can buyers attempt to get reduced prices while maintaining quality?

What factors should be considered when selecting a supplier?

* Location

* Facilities (sanitation, how in tune is staff w/ offering good service)

* Financial stability

* Honesty & fairness

* Dependability

* Technical ability of supplier's staff

What are the 6 steps that make up the receiving process?

1. Compare products to purchase order

2. Inspect products against product specifications 

3. Compare products to delivery invoice

4. Accept products

5. Store products properly and securely 

6. Complete receiving reports & update inventory

1. Why should you mark products?

2. Why should you reject products?

1. helps facilitate proper stock rotation & inventory evaluation

2. sometimes incoming products were not ordered or delivered on time, their quality was inadequate, or their price was incorrect.

What is the difference between perpetual inventory and physical inventory?

• Perpetual Inventory allows managers track items in storage on an ongoing basis
• Physical Inventory doesn't track what is added & subtracted from inventory on an ongoing basis (count usually done at end of each month)

What does FIFO mean?

First-In, First-Out

What are the proper storage temps for:

1. Fridge
2. Dry Storage
3. Freezer

1. 41 degrees or lower

2. 50-70 degrees

3. 0 degrees or lower

1. What does ISSUING involve?

2. What can you do to simplify issuing?

1. distributing F&B from storage areas to authorized individuals who requisition them

2. have employees obtain all the products they need for production at one time