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