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Presentation on theme: "Purchasing."— Presentation transcript:

1 Purchasing

2 Section Objectives Upon completing this section, you should be able to: Explain the process of purchasing

3 Purchasing One can prepare a poor meal with good ingredients, but it is impossible to prepare a good meal with poor ingredients Definition: Purchasing is the careful process of selecting from many choices, making sound decisions, and developing solid relationships with vendors

4 Importance of Purchasing
Food items are perishable Profitability depends on purchasing Guest satisfaction is related to purchasing Money can be tied up with improper purchasing Purchasing is an important component of management Purchasing starts the entire process of operations

5 Purchasing Goals Purchase the right product at the right time and at the right price Purchase only products needed and in the quantities required Insist on quality at optimum price Develop and use proper specifications Deal with reputable purveyors Be ethical in all dealings

6 Purchasing Decisions Inventory on hand Storage capacity
Seasonal fluctuations Type of market Proximity of market Delivery method

7 Points to Consider Take advantage of seasonal/price fluctuations
Consider available sources Compare and select the best price, considering all aspects Consider hidden costs, such as handling Consider available storage space

8 Points to Consider—continued
Waste and spoilage Duration of storage Processing required Theft and pilferage Discounts Minimum order Transportation and delivery Quality assurance

9 Purchasing Specs Specifications, or “specs,” are a description of a particular commodity in terms of its size, quality, and/or condition.

10 Components of Specifications
Grade Quality Variety Size Packaging Density Score Meat grades IMPS # Description Species Size and thickness Style Conditions upon delivery

11 Purchasing Categories
AP = as purchased EP = edible portion

12 Yield Percentage Weight after cooking Weight before cooking
Percentage of yield = × 100

13 Yield Percentage—continued
of yield Weight after cooking (70 lb) Weight before cooking (100 lb) × 100 = 70% =

14 EP Cost EP cost AP cost Yield percentage =

15 EP Cost—continued Yield percentage = .75 AP cost = $.65 EP cost = $.65

16 Tracking Inventory Periodic Inventory Method
Entire stock is physically reviewed on a regular basis From this review, the manager determines reorder point for each inventory item

17 Tracking Inventory–continued Perpetual Inventory Method
Uses inventory cards to keep track of what food items are in storage Items are: Checked in on inventory cards when delivered to the restaurant Checked off as they are issued for use in the kitchen area

18 Maintaining Inventory Par Stock
Par stock is the ideal amount of an inventory item that should be on hand at all times It reflects a quantity that neither runs out nor spoils on the shelf

19 Maintaining Inventory Reorder Point (ROP)
The point or quantity limit at which stock is reordered is the reorder point For example, if the reorder point for 50-pound sacks of flour is two and there are only two sacks left in the storeroom, then the buyer knows to order more flour

20 Steps in Purchasing Request bids and/or quotations Select vendor
Send purchase order via electronic or other means Collect invoices Produce receiving reports Maintain inventory records Maintain requisition records

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