1. Receiving, Storage, and Issuing Control
chapter 9
Receiving, Storage, and Issuing Control

2. Opening Questions
Describe a foodservice receiving area that you have seen.
What goes on there (specifically)?
What equipment is present and used there?

3. Required Resources for Receiving
Well-trained Employee Space to receive Scales Thermometer Knife Ruler Hand Truck Dollies
Cleaning Supplies Pens, Paper Clipboards Calculators Desk Computer File Cabinets

4. Needed from Purchaser Order Sheets Bid Sheets Product Specifications
Daily List of Deliveries

5. Checking Products and Invoices
Confirm Product Quality matches Chef’s Standards
Confirm Product Quantity matches Invoice
Confirm Price and Quantity (including pack size) on Invoice match Order and Bid Sheets
Check math on extensions

6. Invoice Adjustments and Approvals
For poor quality or quantity:
notify driver
request credit memo
make note on invoice
have driver initial
For incorrect pricing:
notify purchaser to speak with the purveyor
do not sign invoice until issue is resolved
For shorted items:
notify purchaser and chef

7. Approving the Invoice Once invoice is accurate, receiver signs it
One copy for receiver, one for driver
May use invoice stamp to confirm invoice checked, extensions checked, and invoice paid

8. Receiving Clerk’s Daily Report
List of all items received on a given day
Includes quantities and prices
Sorts items as
Directs (go to kitchen)
Stores (go to storeroom)
Sundries (non-food or –drink)
Easier to track daily food and beverage costs
Send with invoices and credit memos to accounting

9. Food Storage
Done quickly after receiving to prevent spoilage and theft
Store frozen and refrigerated products first

10. Coolers Guidelines Keep shelving 6 inches from wall and floor
Do not place anything in front of the fan
Store- cooked food above raw
Fridge at F, freezer below 0 F
Should have locking capability

11. Dry Storage Guidelines Shelving 6 inches from floor and walls
Keep 60 – 70 F and low humidity
Should have lockable doors

12. Chemical and Cleaning Supplies
Guidelines
Store after foods are stored
Keep separate from food to avoid cross-contamination
Store in original, well-labeled containers

13. Storage Guidelines
Rotate stock using FIFO to reduce the risk of product spoilage in storage; place new products behind old ones.
Keep identical products in the same location.
Organize inventory sheets to align with product location on shelves.
Spoilage Report – lists products that spoiled in storage.

14. Requisitions and Issuing
Open Storeroom
employees gather products themselves
Closed Storeroom
employees make written request for products; request filled by storeroom clerk or manager
Requisition
the written request (on paper or electronically) for products from storeroom
Issuing
the process of releasing requested products from storage to an employee

15. Closed vs. Open Storerooms
Closed Storerooms
Pro: More control
Con: More costly, requiring high labor costs for a storeroom manager or clerk.
Open Storerooms
Pro: Less costly
Con: Less secure
vs.

16. Storeroom Controls Open Storeroom controls:
Keep storeroom open only briefly and watch employees closely during that time.
Only managers access storeroom when not actively open.
Keep expensive products locked up; only manager can access them.
General Controls:
Conduct regular inventories to catch high food cost problems early.
Install security cameras.

17. Requisition and Issuing Process
Employee writes requisition; manager signs.
Storeroom clerk fills requisition orders.
Clerk records per unit and extended costs, date, and department on requisition
Employee picks up filled order and signs requisition
Physical inventory is conducted periodically and reconciled against prior inventory, deliveries, and requisitions

18. Transfers
A transfer is issuing or receiving food from another department or business unit.
Transfer form looks like requisition form but lists departments issuing and receiving
Sent to cost control manager with requisitions

19. Conducting Inventory 1 person counts and 1 person records
Use blank sheets or printed inventory lists
Can use handheld scanners
Completed sheet includes name, quantity, unit, and extended price for each item
Do when restaurant is closed and no deliveries are scheduled

20. Valuing Inventory
Extension
Number of Units
Price per Unit
NOTE: Price per unit is not always obvious, since prices may change with each order.

21. Techniques to Value Inventory
Valuing Inventory
Techniques to Value Inventory
FIFO
LIFO
Weighted Average
Actual Cost
Most Recent Price

22. FIFO (First In, First Out) Method
Assumes cost is based on most recent invoice and only progresses back in time if there is more inventory than can be accounted for with the latest invoice.

23. Example 9a A restaurant has 140# of flour in inventory on Aug. 20th.
It purchased:
50# on Aug. 3rd for $23/50#
50# on Aug 10th for $24/50#
100# on Aug. 17th at $23.50/50#.
Using the FIFO Method, What is the value of the flour in inventory?

24. Example 9a (cont.)
$23.50/50# = 100 X ÷ 50 = $47 $24/50# = 40 X 24 ÷ 50 = $19.20 Total for 140# = $47 + $19.20 = $66.20

25. LIFO (Last In, First Out) Method
Cost based on the first invoice for the period and only progresses forward once the entire inventory for that invoice has been accounted for.

26. Example 9b
From data in example 9a, calculate the value of 140# of flour using the LIFO method.
$23/50# = 50 X 23 ÷ 50 = $23 $24/50# = 50 X 24 ÷ 50 = $24 $23.50/50# = 40 X ÷ 50 = $18.80 Total for 140# = $23 + $24 + $18.80 = $65.80

27. Weighted Average Method
total amount spent on an ingredient over the inventory period
Price per unit =
total number of units of that ingredient purchased during the same period

28. Example 9c
From data in Example 9a, calculate value of 140# of flour using Weighted Average.
50# X $23/50# = $23 50# X $24/50# = $24 100# X $23.50/50# = $47 Total Flour expense = $23 + $24 + $47 = $94 Total weight = 50# + 50# + 100# = 200# Price per unit = $94 ÷ 200# = $0.47/# Value of 140# = 140# X $0.47/# = $65.80

29. Actual Cost Method
The Actual Cost Method uses the price written on each unit at the time of storage.
Inventory sheet must have multiple lines per product as identical products with different unit costs must be counted separately
If inventory is properly rotated, this method is the same as the FIFO method

30. Most Recent Price Method
Uses the most recent invoice price as the price per unit for all units of that item in inventory.
Referring to example 9a, all 140# of flour would be valued at $23.50/50# for this method.

31. Total Inventory Value
The inventory value is both the closing inventory value for the prior period and the opening inventory value for the upcoming period.
Total inventory value = sum of all inventory item extensions

32. Preventing Inventory Theft
People
only put honest, trustworthy people in positions of power
Locks and Cameras
lock up expensive items; only give keys to managers.
use security cameras
Paper
create a paper trail with employee signed requisitions
Inventory Quantity
minimize amount of inventory kept on hand

33. Inventory Turnover Rate Formula
Opening Inv + Closing Inv
Average Inventory = 2
Cost of Food Sold
Inventory Turnover =
Average Inventory

34. Inventory Turnover Rate
Ideal rate is for inventory to turnover every 1-2 weeks.
To convert monthly inventory turnover rate to days to turnover the inventory…
# of days in the month
Days to turnover
inventory =
Inventory turnover

35. Example 9d
For January, cost of food sold in restaurant is $37,500. Opening inventory for January is $12,300 and closing inventory is $12,900. How often (in number of days) does this restaurant’s inventory turnover?

36. Example 9d (cont.)
Average Inv. = (Opening + Closing) ÷ 2 = ($12,300 + $12,900) ÷ 2 = $12,600 Inv. Turnover = Cost of Food Sold ÷ Avg. Inv. = $37,500 ÷ $12,600 = 2.98 Days to Turnover = Days in Mo. ÷ Inv. Turnover = 31 ÷ 2.98 = 10.4 days

37. Benefits of Quick Turnover
Helps control theft, as stolen items are noticed quickly
Ties up less money in inventory
Reduces chance of spoilage
Reduces space needed to house inventory

38. Special Concerns for Beverages: Receiving
Alcohol picked up at ABC store checked by person picking it up and checked again by someone else at the business
Never leave delivered alcohol unattended until it is secured in storage
Schedule alcohol deliveries when no other deliveries are scheduled
Check labels and fill levels carefully

39. Special Concerns for Beverages: Storage
Lock up alcohol and limit the number of managers with key access.
Store each type of bottle in its own bin.
Use bin numbers and order bins numerically for easy location.

40. Special Concerns for Beverages: Storage
Storing Wine
low light
controlled humidity
55 degrees for red
45 degrees for white
Storing Beer
in original cases
once chilled, keep refrigerated
store kegs at 40 – 50 degrees

41. Special Concerns for Beverages: Issuing
Use a bottle exchange program.
Use written requisitions (even if storeroom is otherwise open).
Ideally, only one manager has the key and the right to issue alcohol.
Managers must check paperwork against inventories and verify control procedures are being implemented properly.