1. © 2011 John Wiley and Sons, Inc. All Rights Reserved Selection and Procurement for the Hospitality Industry Purchasing ANDREW HALE FEINSTEIN AND JOHN M. STEFANELLI E i g h t h E d i t i o n

2. © 2011 John Wiley and Sons, Inc. All Rights Reserved CHAPTER Furniture, Fixtures, and Equipment 27

3. © 2011 John Wiley and Sons, Inc. All Rights Reserved YOU SHOULD BE ABLE TO: Identify management considerations surrounding the selection and procurement of furniture, fixtures and equipment. Outline the general procedures used when purchasing furniture, fixtures, and equipment.

4. © 2011 John Wiley and Sons, Inc. All Rights Reserved YOU SHOULD BE ABLE TO (CON.): Describe the major selection factors for furniture, fixtures, and equipment. Evaluate financing options when purchasing furniture, fixtures, and equipment.

5. © 2011 John Wiley and Sons, Inc. All Rights Reserved FFE AS CAPITAL ITEMS Capital items are long-life items. Most capital items are depreciable assets. Typically, the cost of many FFE items cannot be used as tax deductions in the year they were purchased. Value is depreciated over a period of years.

6. © 2011 John Wiley and Sons, Inc. All Rights Reserved MANAGEMENT CONSIDERATIONS Effect future plans might have on the need for FFE Obsolescence Capitalizing an operating expense

7. © 2011 John Wiley and Sons, Inc. All Rights Reserved GENERAL PROCEDURES IN FFE PURCHASING Is replacement necessary? Visiting trade shows Financing and the need to obtain competitive bids

8. © 2011 John Wiley and Sons, Inc. All Rights Reserved THE FFE SPECIFICATION Similar in scope to other specifications Supplier services are very important Instructions to bidders General conditions Specific conditions Detailed drawings

9. © 2011 John Wiley and Sons, Inc. All Rights Reserved SELECTION FACTORS Intended use Exact name Lifetime cost Potential operating savings Direct purchase Demonstration models Equipment programs Custom FFE New vs. used

10. © 2011 John Wiley and Sons, Inc. All Rights Reserved SELECTION FACTORS (CONT.) Versatility Compactness Compatibility Appearance Brand name Portability Ease of cleaning Ease of maintenance Degree of automation Availability of replacement parts

11. © 2011 John Wiley and Sons, Inc. All Rights Reserved SELECTION FACTORS (CONT.) Supplier services Employee attitude and skill level Energy source Excess capacity Add-on capabilities Warranty Code compliance

12. © 2011 John Wiley and Sons, Inc. All Rights Reserved THE PURCHASE OF FFE Cash Installment Credit