1. Chapter 5
Purchasing and Inventory

2. Purchasing Overview
The purchasing process is everything involved in buying products and services for an operation:
Determine what an operation __________to buy.
Identify __________________
________ products and services.
__________ deliveries.
________________products.
PURCHASING GOALS
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Chapter 5 | Purchasing and Inventory

3. Maintaining Supplies and Quality Standards
Tools to help purchasers buy the right amount of product: 1. 2. 3. 4. 5. 6.
Every item an operation produces must meet that operation’s standards for quality:
_____________is the key to drawing repeat customers.
An operation must have established ________________for each item or service.
______________ are set by the chef, manager, and/or owner, and are easy to follow when purchasing brand-name items.
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Chapter 5 | Purchasing and Inventory

4. Minimizing Expenditures and Staying Competitive.
When ordering, the restaurant’s _____________(amt. of funds available to it at any given time) must be considered
Ex. if a large amount of food inventory sits in storage for a while, the restaurant may need that money to pay other bills
To minimize spending, an operation needs to consider: 1. 2.
For any operation, all costs must be ___________ and the restaurant must be able to ___________customers.
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Chapter 5 | Purchasing and Inventory

5. Staying competitive For an operation to stay competitive, it must:
Shop around for vendors who will provide the best combination of _________________for the operation’s needs.
Try to get the lowest possible _________________price or _______________price.

6. Channels of Distribution Flow
A ______________________________includes the particular businesses that buy and sell a product as it makes its way from its original source to a retailer.
There are three main layers in any channel of distribution:
Primary sources include the ____________________________________________
Intermediary sources include _____________________________________________
Retailers sell their products ____________________________________
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Chapter 5 | Purchasing and Inventory

7. Goods and Services: What’s Being Purchased
Food and Beverages: quality and consistency are key to delivering a desirable _____________________________________________
Nonfood Items: ________________________________
Smallwares and Equipment: require replacement ______________________________________________
Technology: ______________________________
Furniture, Fixtures, and Equipment (FFE): This category is also known as ______________________________________________
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Chapter 5 | Purchasing and Inventory

8. More Goods and Services
Business Supplies and Services: before using an outside marketing service, the amount of _________________________________________
Support Services: ____________________________________________
Maintenance Services: help keep the facility in ___________________________________________
Utilities: ___________________________________
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Chapter 5 | Purchasing and Inventory

9. Buyers: Who’s Doing the Purchasing
In independent or single-unit operations, the buyer of an operation’s product might be _____________________
Some restaurants use the formal-purchasing method to order goods and services ___________________________________ Suppliers then send restaurant bids ______________________________
Smaller operations may use informal purchasing methods _____________________from suppliers. Suppliers then give quotes, a notice _______________________________
A buyer must have integrity to prevent ___________ (money received in exchange for purchasing from a specific vendor)
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Chapter 5 | Purchasing and Inventory

10. Determining Quality Standards
Quality: the value or worth that ________________________
Factors to be addressed when defining an operation’s quality standards include:
The Item’s Intended Use: Knowing how an item will be prepared and served (determines _______________________
The Menu: The buyer must specify in the quality standard exactly ______________________________________
Employee Skill Level: if a menu offers items that require extensive preparation, the operation will need ________________________
Seasonal Availability: The seasonal nature of produce and other items affects _____________________ and ______________.
Storage Capacity: An operation’s storage space limits the ___________________________ it can purchase, which may then affect the quality of some menu items.
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Chapter 5 | Purchasing and Inventory

11. Writing Product Specifications
Product specifications, or specs, describe the ____________________________________________
__________ value: shredded vs. whole cheese
Acceptable __________
Place of _____________________
Buyers should always work with ____________________________________suppliers.
Buyers must be very familiar with the operation’s quality standards and product specifications and ___________________________________________
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Chapter 5 | Purchasing and Inventory

12. Ordering
Buyers conduct _______________________to decide if an operation should make an item from scratch or buy a ready-made version.
Buyers and managers use ___________________to forecast their buying needs.
A ____________________lists all menu items that the chefs will prepare on a given day.
Buyers use production sheets to spot signs of __________________________________________
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Chapter 5 | Purchasing and Inventory

13. Figuring Out What to Order
One of the most important ways managers try to limit food waste is by keeping accurate ________________________.
Determine the daily food cost %:
Most managers try to stay at __% or below on daily food cost
Managers keep ___________that track each item sold from the menu. This record shows which items sell well, called __________, and ones that don’t sell well, called_________.
________________levels are the ideal amounts of inventory items that an operation should have at all times: formula:
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Chapter 5 | Purchasing and Inventory

14. Figuring out what to order cont.
Another way to ensure that an operation always has the proper level of stock on hand is to establish a _______________________, for each item. A reorder point is like a warning bell; it alerts an operation _________________________________________
Used when suppliers do not deliver _________________

15. Ordering Forms
A ___________________is a legally binding, written document that details exactly what the buyer is ordering from the vendor. P. 317
Buyers can place purchase orders by _________________________________________
When a chef believes that a piece of expensive equipment should be purchase or replaced, the chef must first fill out a __________________ and send it to company headquarters.
Once headquarters ___________ the purchase and notifies the buyer, the buyer can place the order.
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Chapter 5 | Purchasing and Inventory

16. Knowing Food Prices Factors that affect a product’s value:
Time value: The price retailers pay for the convenience ____________________________________________
Form value: The price savings created when a buyer purchases ______________ quantities of food instead of individually portioned servings.
Place value: The differences in price of a product depending on _____________ it needs to be shipped.
Transportation value: The cost of choosing a ___________________________ to get goods delivered.
Service value: Additional convenience services that a vendor provides to its customers __________________
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Chapter 5 | Purchasing and Inventory

17. Receiving Orders
_________________: inspecting, accepting, and, in some cases, rejecting deliveries of goods and services. A written ______________ must accompany all deliveries
Guidelines for efficient receiving procedures include:
Plan __________ for shipments.
___________ and ______ each delivery before receiving another one.
Record items on a ____________ sheet.
Correct _____________ immediately.
Maintain the ______________ area.
Receivers have the right to refuse any delivery that doesn’t meet the operation’s standards. A _________________is written to ensure the vendor will credit the restaurant for rejected item.
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Chapter 5 | Purchasing and Inventory

18. Storing Orders
____________________are food products sold or distributed in a form that will spoil or decay within a limited period of time.
________________are items that, generally due to packaging or processing, do not readily support the growth of pathogens.
When storing items in refrigerated storage:
Monitor food ________________ regularly.
Don’t ___________coolers.
Use ___________ shelving.
Keep cooler doors ______________ as much as possible.
Wrap or ___________ all food properly.
Store meat and produce in proper humidity levels ____________________________________________
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Chapter 5 | Purchasing and Inventory

19. Frozen and Dry Storage When storing items in frozen storage:
Check freezer _______________ regularly.
Place frozen food deliveries in ________ once inspected.
Ensure good __________ inside freezers.
Clearly _________ food prepared on-site that is intended for frozen storage.
When storing items in dry storage:
Keep storerooms clean and dry.
Store dry food away from _______ and at least_____off of the floor.
Storeroom should be between ___________ degrees
Store staples (____________________) in airtight containers
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Chapter 5 | Purchasing and Inventory

20. Taking Inventory
An ____________________ is a record of all products an operation has in storage and in the kitchen.
In the physical inventory method, the entire stock is ______________________on a regular basis.
In the perpetual inventory method, ___________________________________________
A physical inventory is an _____________of all items in stock, while a perpetual inventory is an ______________ of stock on hand based on data entry.
_________________ refers to the official procedures employees use when taking an item out of the storeroom and putting it into production (used to prevent ____________)
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Chapter 5 | Purchasing and Inventory

21. Calculate Usage, Food Costs, and Loss
Tracking the amount of a product used during a period of time helps the buyer calculate how much _______________________________________
If sales of food for the period are less than the cost of food sold, then the operation is operating at a____________.
P. 336
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Chapter 5 | Purchasing and Inventory