1. Chapter 4 Food Purchasing and Receiving Control
Principles of Food, Beverage, and Labour Cost Controls,
Canadian Edition

2. Learning Objectives
4.1 Describe how quality & quantity food purchase standards are established.
4.2 List six reasons that standard purchase specifications are important, provide examples of specifications for both a perishable and nonperishable food item.
4.3 Describe the process used to determine the quantity of perishable and nonperishable food to be purchased.
4.4 Determine order quantities using the periodic and perpetual order methods.
4.5 Describe the procedures for purchasing perishable and nonperishable foods at the most favourable prices.
4.6 Describe the various purchasing methods.
4.7 Describe the duties of a receiving clerk, and outline the essential equipment and supplies needed for proper receiving.
4.8 Describe the steps in a standard receiving procedure.
4.9 List the information contained in the receiving clerk’s daily report, and explain the report’s function.
4.10 Explain the difference between directs and stores, and provide examples of each.
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

3. Responsibility for Purchasing
Who does the purchasing?
Owners
Managers
Chef
Purchaser
Steward
One person responsible so they can be held accountable
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

4. Perishables & Non-perishables
Perishables: those items that are typically fresh foods, relatively short shelf life
Non-perishables: longer shelf life
Groceries
Staples
Storeroom items
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

5. Developing Standards and Standard Procedures for Purchasing
Quality
Quantity
Price
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

6. Quality Standards Standard Purchase Specifications:
Force to determine exact requirements
Useful in menu preparation
Eliminate misunderstandings
Allows for true competitive bidding
Eliminates verbal descriptions each order
Facilitate checking food when received
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

7. Food Specifications Sample
Black Angus Strip Loin, short cut
IMPS number 180
Boneless 25 cm trim
Canada AAA
Range #2, minimum 5.5 kg, maximum 6.5 kg
1.0 to 2.0 cm fat, except for seam fat
Chilled upon delivery
Free from objectionable odours, no evidence of freezing
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

8. Quantity Standards- Perishables
Market quotation list: a form often used as a tool by food purchasers for
Taking daily inventory of perishables
Determining suitable order quantities
Recording market quotations
Selecting vendors
Par stock: maximum quantity that should be on hand at any given time
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

9. Quantity Standards- Nonperishables
Periodic order method:
Amount required for the upcoming period
- Amount presently on hand
+ Amount wanted on hand at the end of the period to last until the next delivery
= Amount to order
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

10. Periodic Order Method Periodic order method example: - 9 cans on hand
14 cans required
- 9 cans on hand
+ 10 cans to be left at the end of the period (desired ending inventory)
=15 cans to be ordered on this date
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

11. Desired Ending Inventory (DEI)
The quantity sufficient to last until the next delivery is received
Daily Usage X
Number of days in delivery period =
Normal usage
2 cans per day X
5 days in delivery period =
10 cans normal usage
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition
10 cans normal usage +
50% safety factor =
15 cans DEI

12. Perpetual Inventory Method
Par stock
- Reorder point
= Subtotal
+ Normal usage until delivery
= Reorder quantity
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

13. Perpetual Inventory Method
Perpetual inventory method example:
20 par stock
- 15 reorder point
= 5 subtotal
+ 10 normal usage until delivery
= 15 reorder quantity
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

14. Determinants for Maximum Quantity of Perishables on Hand
Storage space
Limits on total value of inventory prescribed by management
Desired frequency of ordering
Usage
Purveyors’ minimum order requirements
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

15. Suppliers to Foodservice Operators
Wholesalers
Local Producers
Manufacturers
Packers
Local farmers
Retailers
Cooperative associations
Internet suppliers
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

16. Means of Obtaining Price Quotes
Internet/
Telephone
Quotation sheets obtained by mail
Information supplied by salespersons
Direct computer links with purveyors via the internet or dedicated telephone line
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

17. Centralized Purchasing
Advantages:
Purchase at lower prices because of volume
Desired quality can be obtained, a greater choice of markets
Larger inventories, ensuring reliable supply
Reduce dishonest purchasing in individual units
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

18. Centralized Purchasing
Disadvantages:
Each unit must accept the standard item in stock and has little freedom to purchase for its own particular needs
Units can’t take advantage of local specials
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

19. Written Purchase Order
Advantages include the following:
Written verification of quoted price
Written verification of quantity ordered
Written verification of all goods ordered
Written and special instructions to the receiving clerk, as needed
Written verification of conformance to product specification
Written authorization to prepare vendor invoice for payment
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

20. Written Purchase Order
The written Purchase Order form should contain space for the following information:
Item Name Spec #, if appropriate Quantity Ordered Quoted Price Extension Price Total Price of Order Vendor Information Purchase Order Number Date Ordered Delivery Date Ordered by____ Received by_______ Delivery Instructions Comments
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

21. Purchasing Methods One-Stop Shopping (One Purveyor) Open Bid Cost Plus
Contract Purchasing
Food Brokers
Standing Orders
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

22. Receiving Standards
The quantity delivered same as the quantity on the Market Quotation List and invoice
The quality delivered meets establishment’s standard specifications
The prices on the invoice match the Market Quotation List
The goods are received at the time specified
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

23. Sample Invoice Market Price Meat Co. 300 Market St. Calgary, Alberta
To: Bistro Quatre Date: October 3, 20XX
Quantity Unit Description Unit Price Amount
13.6 kg Tri-tip;IMPS 185C
4.54 kg Veal striploin 344A
$436.01
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

24. Receiving Procedures
Verify the quantity, quality, and price for each item
Verify invoice with invoice stamp
List foods delivered on the Clerk’s Daily Report for that day
Forward paperwork to proper personnel
Move food to storage or production areas
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

25. The Invoice Stamp The invoice stamp provides for: Date food received
Signature of the receiving clerk
Steward’s signature, acknowledging delivery
Controller’s verification of calculations on invoice
Signatory approval of the bill for payment
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

26. Receiving Clerk’s Daily Report
Directs: foods that extremely perishable by nature, purchased daily.
For immediate use
Considered to be issued on delivery
Go directly onto today’s food cost
Stores: perishable but have a relatively longer shelf life.
Not for immediate use
Included on food cost when they are issued
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

27. Training for Receiving
The great problem in employing receiving personnel is with the vast amount of knowledge of foods these workers require
This may explain why some restaurants do not require quality checks upon delivery
Someone has to do it!!!
If not your customers will!!!
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

28. Key Terms Bin card, p. 104 Par stock, p. 100
Centralized purchasing, p. 114
Periodic order method, p. 103
Contract purchasing, p. 115
Perishable foods, p. 96
Cost plus, p. 115
Perpetual inventory card, p. 106
Desired ending inventory (DEI), p. 105
Perpetual inventory method, p. 106
Directs, p. 120
Purchase Journal Distribution, p. 121
Food brokers, p. 115
Purchase order, p. 114
Invoice, p. 117
Receiving Clerk’s Daily Report, p. 120
Invoice stamp, p. 119
Reorder point, p. 107
Market Quotation List, p. 100
Reorder quantity, p. 108
Nonperishable foods, p. 96
Standard purchase specifications, p. 98
One-supplier buying, p. 115
Standing orders, p. 115
Open bid, p. 115
Stores, p. 121
Par, p. 100
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

29. Chapter Web Links NCR- Aloha POS software
Micros POS software
Canadian Food Inspection Agency:
Canadian Meat Business:
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

30. Copyright
Copyright © 2014 John Wiley & Sons Canada, Ltd. All rights reserved. Reproduction or translation of this work beyond that permitted by Access Copyright (The Canadian Copyright Licensing Agency) is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons Canada, Ltd. The purchaser may make back-up copies for his or her own use only and not for distribution or resale. The author and the publisher assume no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information contained herein.
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition