1. OH 3-1 Agenda Chapter Two- Key terms review Chapter Three – The Purchasing Function Chapter Three – Key terms review Chapter Four – The Procurement Process & Supplier Selection Inventory Book Set-Up

2. OH 3-2 Key Term Review Blanket order discount Buyer’s authority Buyer’s responsibility Cash discount Free sample Job description Job specification Kickback

3. OH 3-3 Key Term Review continued Promotional discount Purchasing skill set Quantity discount Reciprocity Steward sales Volume discount

4. OH 3-4 Quality Standards in Purchasing Inventory and Purchasing 3 OH 3-4

5. OH 3-5 Chapter Learning Objectives Identify and communicate quality standards. Identify factors contributing to the establishment of quality standards. State why it is important to convey and adhere to quality standards. Describe buyer considerations when conducting a make-or-buy decision.

6. OH 3-6 Quality Standards Identify and communicate in writing a record of purchasing criteria, product standards and specifications for Managers Vendors Employees

7. OH 3-7 Quality Standards continued Clearly communicate product and service standards and requirements to staff and suppliers to avoid ordering and shipping errors.

8. OH 3-8 Quality Standards continued Identify an operation’s specific product or service requirements for bid purposes. In most cases, bid buying results in Lower prices Consistent quality Reduced paperwork Lower purchasing-related labor costs

9. OH 3-9 Quality Standards continued Allow an operation to clearly identify acceptable replacement items For use when Requested products are unavailable Product demand exceeds requested product supply

10. OH 3-10 Quality Standards continued Improve the ability of employees to identify and prepare menu items by providing Consistent yield Predictable trim Constant viscosity (thickness or flow) Predictable plate coverage

11. OH 3-11 Determining Quality Standards Quality standards are based upon the style of restaurant and its needs for products and services. Resources available when developing quality standards include Purchasers Suppliers (vendors) In-company personnel Outside consultants

12. OH 3-12 Product Specifications Product specifications specify exactly what an operator is seeking to buy from its vendor. In this case, the operator is the customer, and the vendor must fulfill the customer’s needs. It is easiest to fulfill customers’ needs when they are clearly known!

13. OH 3-13 Product Specifications continued An item’s intended use is its most important characteristic when specifying quality standards. Intended use addresses In what form? In what size? At what temperature? At what stage of processing? In what packaging?

14. OH 3-14 Product Specifications continued Specific information includes: Yield Packaging Color Quality level Grade Count Size Temperature Processing requirements Shipping methods

15. OH 3-15 Product Specifications continued The exact name is used to identify, as closely as possible, the desires of the buyer. Food names may vary by region May include sizes and other factors

16. OH 3-16 Product Specifications continued Brands can be indicators of quality. Operators may prefer to buy a brand name. Guests may prefer to see brand name products served to them.

17. OH 3-17 Product Specifications continued When products come in different packaging formats, product specifications must be very exact.

18. OH 3-18 Product Specifications continued Item size will, in many cases, directly affect portion cost. Size may refer to Weight Volume Count

19. OH 3-19 Product Specifications continued Acceptable trim indicates the amount of allowable waste acceptable upon delivery. Excessive trim will increase portion costs. Excessive trim reduces profits. Purchase prices typically increase as trim loss is reduced.

20. OH 3-20 Product Specifications continued Grade is an indicator of quality. The United States Department of Agriculture (USDA) grades are recognized standards in the foodservice industry. In most (but not all) cases, grading is not mandatory.

21. OH 3-21 Product Specifications continued Market form indicates how an item is processed prior to packaging. Examples include Whole Diced Shredded Chopped Fresh Frozen

22. OH 3-22 Product Specifications continued Color is an indicator of age and identification Age examples include Green bananas Red strawberries Identification examples include Green beans Red grapes

23. OH 3-23 Product Specifications continued Accuracy in menu legislation requires that places of origin, if used on the menu, must correctly reflect the true origin of the item sold. For example “Idaho Rainbow Trout” must actually come from Idaho. “New York Cheesecake” must come from New York.

24. OH 3-24 Product Specifications continued When designating acceptable substitutes, it is always best not to reduce quality standards!

25. OH 3-25 Product Specifications continued Unit Pricing Pricing by The dozen The case at an agreed-upon case size Alternative units Price Limits Buyers may predetermine the maximum price (limit) they will pay. Examples include prices for fresh lobsters and other types of rare seafood.

26. OH 3-26 Product Specifications continued Temperature control procedures Room temperature Refrigerator temperature Frozen (freezer) temperature

27. OH 3-27 Factors Affecting Quality Standards The item’s intended use The operation’s concept and goals The menu The skill level of employees

28. OH 3-28 Factors Affecting Quality Standards continued Budgetary constraints Customer’s wants and needs Seasonal availability Availability of storage

29. OH 3-29 Make or Buy: The Case for Buying Food Buying food in a partially or fully prepared state: Ensures consistency May be cost effective because product waste is reduced Saves time Saves storage space

30. OH 3-30 Make or Buy: The Case for Making Food Quality may be better. Guests’ satisfaction may be higher. Food costs are generally lower. Signature dishes are easier to develop.

31. OH 3-31 1. Product ( specifications/standards ) identify the characteristics desired in a product or service purchased by a foodservice operation. 2. Which of the following is not a category typically used to develop product specifications? A. Brand B. Delivery times C. Size D. Packaging 3. Employee __________ __________ is an important factor affecting quality standards. 4. The final quality of a “made from scratch” item will always exceed the quality of a purchased item. ( True/False ) How Would You Answer the Following Questions?