OH 5-1 Agenda Chapter 8 – Purchasing Follow-Up Tour of receiving area Physical Receiving Inventory Book Set-Up Unit of Measures Worksheet Project: Standardized Recipes Complete Chapter 1 Update Sign-up Sheets Next week

OH 5-2 Purchasing Follow-Up Purchasing 8 OH 1-2

OH 5-3 Chapter 8 – Learning Objectives Explain the basic procedures to monitor vendor compliance with quality standards at the time of receiving. Summarize the basic requirements for effective product receiving. Explain the necessary documentation and procedures that should be followed to pay vendors for product purchases. Describe the importance of and basic methods that can be used to evaluate the purchasing process.

OH 5-4 Case Study Page 193 of text book Discussion questions Has this happened where you are employed?

OH 5-5 Receiving Definition: Receiving is a series of activities that ends with the transfer of product ownership from a vendor to a restaurant or foodservice operation. Business volume may dictate receiving procedures and control.

OH 5-6 Receiving continued Control procedures for receiving tend to increase with property size.

OH 5-7 Receiving continued Let’s look at examples of each of the following sizes of operations: Examples Who might be responsible for receiving Small operations Midsized operations Large-volume properties

OH 5-8 Receiving continued Effective receiving practices are essential in any operation Managers responsibilities Develop & implement policies and procedures, monitor and corrective action taken if not used Designate and train responsible employees Train in identifying quality standards Provide equipment needed and train in use and maintenance Inform vendors of receiving process

OH 5-9 Receiving continued Characteristics of successful receiving staff: Maintain food safety standards Use available technology Meet physical demands of position Recognize and resolve problems Part of team to meet organization goals

OH 5-10 Receiving continued Basic Receiving Procedures Adequate space for proper receiving and storage Proper equipment….

OH 5-11 Receiving continued Steps in Receiving must be followed Deviances noticed and corrective action taken

OH 5-12 Receiving continued Let’s identify the parts of the invoice. Open text to page 199

OH 5-13 Receiving continued Determine Quality Standards Develop product specification Define A Items Spot check quality; look for trends Contact vendors if problems persist

OH 5-14 Receiving continued Keep a log of receiving Document credits immediately Follow up if additional product needs to be ordered Communicate issues to intended user Keep food safe Watch for theft

OH 5-15 Receiving continued Daily logs may be used to calculate food costs

OH 5-16 Technology and Receiving Paperless receiving Electronic purchase orders Check incoming products Bar code labels Radio frequency identification (RFID) – real time inventory Inventory management

OH 5-17 Security and Receiving Guard against common problems: Short weights Assorted contents Missing items Limited access Authorized personnel only

OH 5-18 Payment for Purchases Vendors must be paid in a timely matter and according to contract terms Documentation and communication to accounting staff Responsibility varies upon size of operation

OH 5-19 Payment for Purchases Internal flow of documents page 205 of text

OH 5-20 Payment for Purchases Internal flow of documents Small volume: one person Mid-volume: Department heads requisition product from purchaser Large-volume: Team of receiving, storage, supervisor/manager, accounting

OH 5-21 Managing Credit Procedures Used when: Incorrect price Back order Short weight Product rejected Forward to accounting Follow up with vendor

OH 5-22 Payment Procedures Verify invoice information No quantity or price difference All extension correct Pay invoice By Invoice By Statement – example page 209 Mark invoice paid (date, amount) File for reference

OH 5-23 Petty Cash Necessary evil! Establish step by step control/process Minor expenses Keep secure and do not co-mingle with cash drawer Balance daily

OH 5-24 Petty Cash Completed and signed form Receipts replaces cash Secure Limit amount in fund No borrowing Use monitored by management

OH 5-25 Purchasing Evaluation Reasons to Evaluate Purchasing Recognize importance of purchasing (25-35% of costs) Determine improvement benchmarks Control costs Monitor, measure and award positive behavior Improve purchasing function

OH 5-26 Purchasing Evaluation continued Step 1: Reduce product cost without sacrificing quality Step 2: Determine average costs and monitor Step 3: Quantity and price Step 4: Review standards/goals, strategies for improvement Step 5: Did corrective action resolve problem or further action required

OH 5-27 Purchasing Goals and Evaluation Concerns Purchasing goals should be developed based on desired results

OH 5-28 Operational Concerns

OH 5-29 Operational Concerns On-going process of evaluation and improvement Relationships with departments Creative assistance Effective purchasing policies and procedures Vendor performance

OH 5-30 Review Your Learning Questions on page 220 of text

OH 5-31 Key Terms A item The more expensive items that an establishment purchases. Audit trail A step-by-step record that traces financial data to their source. Bar code A label that has numerous machine- readable rectangular bars and spaces arranged in a specific way to identify a product. Bona fide occupational qualification (BFOQ) A job qualification legally judged reasonably necessary to safely or adequately perform a job. Credit memo A document used to adjust information about product quantities or costs recorded on a delivery invoice.

OH 5-32 Key Terms Extension (calculations) An arithmetic calculation made on a delivery invoice; for example, the item quantity and the unit price are multiplied to determine the total cost for each product. Pallet A portable platform, or rack, typically made of wooden slats, used to store and move cases of products stacked on it. Petty cash fund A small amount of cash on hand that is used to make relatively low-cost purchases. Receiving A series of activities that ends with the transfer of product ownership from a vendor to a restaurant or foodservice operation.

OH 5-33 Tour of receiving area Physical Receiving

OH 5-34 Inventory Book Set-Up Unit of Measures Worksheet Project: Standardized Recipes Complete Chapter 1 Update Sign-up Sheets Next week

OH 5-35 Complete Chapter 1

OH 5-36 Next Week Update Sign-up Sheets Next week Read Chapter 2 & 3 Due: Inventory Sheet Set-Up Due: Original recipe input onto recipe form Due: Receiving Sheets