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Chapter 5 Purchasing and Inventory

Chapter 5 Purchasing and Inventory. 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.

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Chapter 5 Purchasing and Inventory

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  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 5.1 Chapter 5 | Purchasing and Inventory

  3. Maintaining Suppliesand 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. 5.1 Chapter 5 | Purchasing and Inventory

  4. Minimizing Expendituresand 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. 5.1 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 ____________________________________ 5.1 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 ______________________________________________ 5.1 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: ___________________________________ 5.1 Chapter 5 | Purchasing and Inventory

  9. Buyers: Who’s Doingthe 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) 5.1 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. 5.2 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 ___________________________________________ 5.2 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 __________________________________________ 5.2 Chapter 5 | Purchasing and Inventory

  13. Figuring Out Whatto 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: 5.2 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. 5.2 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 __________________ 5.2 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. 5.3 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 ____________________________________________ 5.3 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 5.3 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 ____________) 5.3 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 5.3 Chapter 5 | Purchasing and Inventory

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