Lecture 5 Flashcards
What is the goal of the purchasing process?
to secure the products needed at the best price of the best specified quality and delivered as needed in a safe and sanitary manner
what are the 3 types of distributors?
wholesalers
processors representatives
food brokers
What are the 3 types of wholesalers?
- full of limited function wholesalers
- wholesale clubs
- speciality wholesalers
What are some buyer responsibilities?
- determine foodservice department needs in terms of products equipment and services
- selecting vendors
- selecting the method of purchasing
- placing and following up on orders
- establishing and maintaining an inventory system
- maintaining effective vendor relations
- tracking changes in the market and economic conditions
- utilizing current technology to facilitate the procurement process
What are the 10 steps of the procurement process?
- complete needs assessment
- select purchasing method
- develop approved vendor list
- obtain bid or price quotes
- determine order quantity
- establish and maintain inventory system
- place order
- receive order
- store order
- issue items
What is involved when you conduct a needs assessment?
- evaluate the sample
- standardize recipes
- gather input from product evaluation team
- gather input from management staff
- forecast production demand
- establish budget
- assess equipment and space availability
What is involved when in selecting a purchasing method?
- consider size and philosophy of the operation
- determine purchase volume
- determine frequency of delivery
- consider distributor location
- evaluate department storage facilities
- determine available personnel
What are the 2 methods of purchasing?
informal
formal
What are the 5 components of buying methods
- single sourcing
- group purchasing
- prime vendor agreements
- centralized purchasing
- just in time purchasing
Prime vendor agreement
buyer contracts with one vendor to supply a specified percentage of a given category of product
benefits: increased competition, reduced cost of inventory, space and order processing, availability of value-added services
Value-added service
-to become more competitive, distributors are offering services that go beyond simply competing the deliver accurately and on time
What are the 3 steps involved in developing an approved vendor list?
- survey stage
- inquiry stage
- supplier performance evaluation
How to select a vendor?
-develop approved vendor or distributor list using SINE
What is SINE?
S-survey: explore all possible sources
I-inquire: evaluate qualifications, size, capacity, finances, technology, location
N-negotiate: communicate to secure the best price and deliver commitment
E-experience: monitor service
Obtain bid or price quotes
bids/quotes are sought if not suing a primevendor
- develop specifications for each item
- obtain best prices and terms
- develop and use purchase requisition form
- develop a bid packet that can be shared and solicit bids from at least 3 vendors
Inventory
used to describe the goods/products a foodservice operation has on hand/in stores
What are the 2 main types of inventory?
perpetual and physical
Physical inventory
- periodic actual counting and recording of products in stock in all storage areas
- involves 2 people
Perpetual inventory
- continual real time tallying of items in stock
- purchases and issues continuously are recorded for each product in storage
- balance in stock at all times
How to determine order quantity
- forecast menu portions
- determine standard portions based on standardized recipes
- determine serving supplies
- assess food on hand
Forecasting
estimating needs for specific items using past data to determine future needs
What is required when placing the order?
- specify price
- specify quantity
- specify payment method
- distribute copies of purchase order
Inventory par levels
- minimum quantity of a given item that a business must keep on hand
- when actual quantity falls below the par level a new order is placed
- used to prevent shortages while avoiding holding excess goods in inventory
What is purchase requisition?
form used by fs manager to request items for purchasing manager or department
generally included on all requisitions: requisition number, delivery date, budget account number, quantity needed, description of the item
5 components of purchase requisition?
- requisition number
- budget account number
- description of the item
- delivery date
- quantity needed
Purchase order
document completed by buyer and given to supplier listing items to be purchased format: -name and address of fs organization -name and address of supplier -identification numbers -general instructions to supplier -complete description of purchase item -price data -buyers signature
Free on Board
transportation term that indicates that the price for goods includes delivery at the sellers expense to a specified point and no further
used with an identified physical location to determine: responsibility and basis for payment of freight charges and the point at which ownership/title for the shipment passes from seller to buyer
FOB Origin
- the buyer assumes title and control for the goods the moment the carrier loads the good for transportation
- the buyer assumes risk of transportation and is entitled to route the shipment
- buyer is responsible for filing claims for loss or damage
FOB Destination
- seller retains ownership and control of goods until they are delivered
- seller selects the carrier and is responsible for the risk of transportation
- the seller is responsible for filing claims for loss or damage
