Presentation on theme: "Receiving, Storage, and Issuing Control"— Presentation transcript:
1Receiving, Storage, and Issuing Control chapter 9Receiving, Storage, and Issuing Control
2Opening QuestionsDescribe a foodservice receiving area that you have seen.What goes on there (specifically)?What equipment is present and used there?
3Required Resources for Receiving Well-trained Employee Space to receive Scales Thermometer Knife Ruler Hand Truck DolliesCleaning Supplies Pens, Paper Clipboards Calculators Desk Computer File Cabinets
4Needed from Purchaser Order Sheets Bid Sheets Product Specifications Daily List of Deliveries
5Checking Products and Invoices Confirm Product Quality matches Chef’s StandardsConfirm Product Quantity matches InvoiceConfirm Price and Quantity (including pack size) on Invoice match Order and Bid SheetsCheck math on extensions
6Invoice Adjustments and Approvals For poor quality or quantity:notify driverrequest credit memomake note on invoicehave driver initialFor incorrect pricing:notify purchaser to speak with the purveyordo not sign invoice until issue is resolvedFor shorted items:notify purchaser and chef
7Approving the Invoice Once invoice is accurate, receiver signs it One copy for receiver, one for driverMay use invoice stamp to confirm invoice checked, extensions checked, and invoice paid
8Receiving Clerk’s Daily Report List of all items received on a given dayIncludes quantities and pricesSorts items asDirects (go to kitchen)Stores (go to storeroom)Sundries (non-food or –drink)Easier to track daily food and beverage costsSend with invoices and credit memos to accounting
9Food StorageDone quickly after receiving to prevent spoilage and theftStore frozen and refrigerated products first
10Coolers Guidelines Keep shelving 6 inches from wall and floor Do not place anything in front of the fanStore- cooked food above rawFridge at F, freezer below 0 FShould have locking capability
11Dry Storage Guidelines Shelving 6 inches from floor and walls Keep 60 – 70 F and low humidityShould have lockable doors
12Chemical and Cleaning Supplies GuidelinesStore after foods are storedKeep separate from food to avoid cross-contaminationStore in original, well-labeled containers
13Storage GuidelinesRotate 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.
14Requisitions and Issuing Open Storeroomemployees gather products themselvesClosed Storeroomemployees make written request for products; request filled by storeroom clerk or managerRequisitionthe written request (on paper or electronically) for products from storeroomIssuingthe process of releasing requested products from storage to an employee
15Closed vs. Open Storerooms Closed StoreroomsPro: More controlCon: More costly, requiring high labor costs for a storeroom manager or clerk.Open StoreroomsPro: Less costlyCon: Less securevs.
16Storeroom 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.
17Requisition and Issuing Process Employee writes requisition; manager signs.Storeroom clerk fills requisition orders.Clerk records per unit and extended costs, date, and department on requisitionEmployee picks up filled order and signs requisitionPhysical inventory is conducted periodically and reconciled against prior inventory, deliveries, and requisitions
18TransfersA transfer is issuing or receiving food from another department or business unit.Transfer form looks like requisition form but lists departments issuing and receivingSent to cost control manager with requisitions
19Conducting Inventory 1 person counts and 1 person records Use blank sheets or printed inventory listsCan use handheld scannersCompleted sheet includes name, quantity, unit, and extended price for each itemDo when restaurant is closed and no deliveries are scheduled
20Valuing InventoryExtensionNumber of UnitsPrice per UnitNOTE: Price per unit is not always obvious, since prices may change with each order.
21Techniques to Value Inventory Valuing InventoryTechniques to Value InventoryFIFOLIFOWeighted AverageActual CostMost Recent Price
22FIFO (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.
23Example 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?
24Example 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
25LIFO (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.
26Example 9bFrom 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
27Weighted Average Method total amount spent on an ingredient over the inventory periodPrice per unit=total number of units of that ingredient purchased during the same period
28Example 9cFrom 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
29Actual Cost MethodThe 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 separatelyIf inventory is properly rotated, this method is the same as the FIFO method
30Most 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.
31Total Inventory ValueThe 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
32Preventing Inventory Theft Peopleonly put honest, trustworthy people in positions of powerLocks and Cameraslock up expensive items; only give keys to managers.use security camerasPapercreate a paper trail with employee signed requisitionsInventory Quantityminimize amount of inventory kept on hand
33Inventory Turnover Rate Formula Opening Inv + Closing InvAverage Inventory=2Cost of Food SoldInventory Turnover=Average Inventory
34Inventory 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 monthDays to turnoverinventory=Inventory turnover
35Example 9dFor 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?
36Example 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
37Benefits of Quick Turnover Helps control theft, as stolen items are noticed quicklyTies up less money in inventoryReduces chance of spoilageReduces space needed to house inventory
38Special Concerns for Beverages: Receiving Alcohol picked up at ABC store checked by person picking it up and checked again by someone else at the businessNever leave delivered alcohol unattended until it is secured in storageSchedule alcohol deliveries when no other deliveries are scheduledCheck labels and fill levels carefully
39Special 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.
40Special Concerns for Beverages: Storage Storing Winelow lightcontrolled humidity55 degrees for red45 degrees for whiteStoring Beerin original casesonce chilled, keep refrigeratedstore kegs at 40 – 50 degrees
41Special 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.