1. Receiving, Storing, and Issuing
Chapter 8

2. Objectives Evaluate the receiving process
Explain the use of a product specification reference guide and the buyer’s order form
Describe product inspections, discrepancies, product rejections, and credit memos

3. Objectives (cont’d.) Summarize the storing process
Define formal and informal issuing
Describe the use of storeroom requisitions and purchase requisitions
Explain the differences between a physical inventory and a perpetual inventory

4. Objectives (cont’d.)
Identify the hardware and software used with computerized inventory systems
Describe the methods used to determine inventory valuation
Apply the use of ingredient rooms as they relate to inventory management

5. The Receiving Process
Operator can exercise greatest control at the receiving dock
Where the financial, physical, and legal responsibility for product is transferred
Receiving department verifies the order
The three “Q’s” of receiving: quality, quantity. and quote

6. Product Inspections When setting receiving dock hours
Consider kitchen needs and when receiving personnel are available
Exceptions may need to be made
Conduct efficient, thorough inspections of all products
Specification, quality, and quantity

7. Product Inspections (cont’d.)
Reviewing specifications and orders
Verify delivered goods were ordered
Blind receiving
Receiving clerk counts and weighs everything
Key stop (drop stop) occurs without receiving clerk present

8. Product Inspections (cont’d.)
Inspecting the quality
Chef must train the receiving clerk
Factors: freshness, color, size, consistency, and taste
Inspecting the quantity
Products must be counted or weighed
Weight tags used to record weight of large cuts of fish or meat

9. Product Discrepancies
Mistakes can occur in the quality, weight, or count of delivered items
Chefs and clerks have right to reject inferior product
Most vendors have credit agreement in place
Credit memo should be issued
Make sure bookkeeper knows credit is expected for that invoice

10. Maintaining Statement Files
Receiving clerk should file a copy of vendor’s signed delivery statement
Attach original order form, if required
Send original to bookkeeper for payment
Keep a separate file for each vendor
Validate monthly invoice totals against delivery statements for accuracy

11. The Storing Process Delivered products must be stored immediately
Money can be lost in storing process
Carrying excessive inventory
Improper handling of perishables
Product deterioration or inaccurate bookkeeping

12. Inventory Management
Process of controlling inventory volume until it is to be issued
Consider shelf life
Good food is a financial loss if left to spoil
Informal systems of control
Check sheets used by employee when items are removed from stockroom

13. Inventory Management (cont’d.)
Formal systems of control
Consists of a system for tracking issues
Must have staff to do this
Employed by larger food service operations
A system to determine when and how much product to order is needed

14. Inventory Management (cont’d.)
ABC analysis
Greatest cost or volume items are given highest priority
Par stock method
Kitchen storeroom containing partial stock
Mini-max method (safety stock)
Establish min and max inventory levels

15. Inventory Management (cont’d.)
The Levinson approach
Buyer must closely approximate product to be used between deliveries
Then calculate the amount to order
Economic order quantity
Costs associated with receiving, stocking, and inventory control reduced with infrequent ordering

16. Conducting Inventories
Physical inventories are done in the storeroom or cooler
Requires complete accounting of all items
Perpetual (virtual) inventory
Count of stock that is supposed to be on the shelves in the storeroom
Allows physical inventory to be taken less frequently

17. Inventory Record Systems
Storeroom inventory database should contain:
Stock item number
Storage location code
Product description and specifications
Approved brand names and suppliers
Inventory information, and more

18. Valuing Inventory
Business must determine a method for valuing their inventory
Inventory valuation systems include FIFO (first in, first out), LIFO (last in, first out), weighted average, actual cost, and latest purchase price
Valuation method should be used consistently

19. Fixed Asset Inventory
Some companies create methods for tracking their fixed assets
Fixed assets include computers, office equipment, vehicles, and furniture
Bar codes may be used
Or determination made by weight or storage area that holds a predefined number of items

20. The Issuing Process
Food assets must be issued into production in order to earn a profit for the business
One of two methods is used
Informal issuing
Formal issuing

21. Informal Issuing Storeroom is open to the kitchen staff
Free to enter when supplies are needed
Room is subject to theft if not properly controlled
No ability to separate costs
If multiple retail outlets use same storeroom

22. Formal Issuing
Buyer purchases goods on behalf of all outlets and issues them at cost to each individual outlet
Process of releasing items controlled by requisition
Immediate information on daily food cost by revenue center is available

23. Direct Issues
Products issued immediately into production from the receiving dock
Should be recorded in storeroom’s inventory for recordkeeping purposes
Expenditure must be charged to the cost center to which it is issued
Product requisitions are forms used to identify foods needed by the chef

24. Direct Issues (cont’d.)
Purchase requisitions are internal documents used:
In businesses that have formal storeroom operations
For special equipment that is needed

25. Summary
At the receiving dock, product is inspected for quality, quantity and whether it meets the order specification
There are a variety of inventory management systems to choose from
There are formal and informal ways of managing storeroom inventory