Lecture 6- Receiving, Storage, and Inventory Control

Question 1

Receiving Procedures

Answer 1

• receiving area should be located near the loading dock, storeroom, fridges and freezers
• should ensure that the food supplies delivered match the quality and quantity of the items ordered
• inspection and evaluation for quality should be responsibility of someone who knows the specifications and can judge quality of goods delivered
• assign responsibility for checking quantities to receiving or storeroom to personnel who have been trained
• deliveries should be made at scheduled times and days
• only after they have been inspected, dated, tagged, stamped and approved should the staff sign the deliver slip

Question 2

What are the 2 types of receiving?

Answer 2

Invoice and blind

Question 3

Invoice

Answer 3

having a receiving clerk check the items delivered against the original purchase order or phone order and note any discrepencies

Question 4

Blind

Answer 4

clerk uses an invoice or a purchase order that has the “quantity ordered” column blanked out and clerk records the quantity actually received

Question 5

Product receipt

Answer 5

receiving clerk completes form that describes quantity description and state of items delivered
includes date, purchase order number and name of who received the order

Question 6

Receiving record

Answer 6

similar to product receipt but may include additional info like cost and vendor name

Question 7

Storage Procedures

Answer 7

• once foods are received they must be protected from contamination, spoilage and other damage
• store immediately to ensure quality, prevent theft and update inventory
• dry and low temp storage areas should be easily accessible from receiving are

Question 8

Issuing food

Answer 8

process of providing food and nonfood supplies to other areas within the fs department

Question 9

Exchange cart process

Answer 9

all products needed for the day’s menu are placed on a cart and wheeled to production area

Question 10

Computerized issuing process

Answer 10

product bar codes scanned and entered into data base

Question 11

Why is is maintaining inventory records important?

Answer 11

• to provide data for cost control
• to assist in identifying purchasing needs
• to provide accurate info on type and quantity of food and supplies on hand
• to monitor usage of products and prevent theft and pilferage

Question 12

Perpetual inventory

Answer 12

• process of recording all purchases and food issues
• usually only for non-perishable items
• 5 steps: create balance on hand record, add new products to existing inventory, subtract issued products, evaluate inventory balance, reconcile with physical inventory

Question 13

Physical inventory

Answer 13

actual count of all products in storage conducted by team of at least who employees who survey and count

Question 14

Inventory Turnover

Answer 14

• Slow inventory may indicate an excessive amount of food on hand and money tied up in inventory that could be used elsewhere
• Most fs operations try to turn over inventory 2-8times per month

Question 15

Inventory Valuation

Answer 15

process of tabulating the net value of the goods being held by a FS operation
the amount of money “tied up” in inventory needs to be assessed at regular intervals in order to assess the overall worth of the business and quality of its management

Question 16

4 components of inventory valuation methods

Answer 16

actual purchase price, weighted average, LIFO method, FIFO method

Question 17

Actual purchase price

Answer 17

pricing the inventory at the exact price of each individual product

Question 18

Weighted average

Answer 18

a weighed unit cost is calculated based on the unit purchase price and the number of units in each purchase

Question 19

FIFO

Answer 19

First in first out

• goods received first are issued or used first
• cost of goods sold represents cost of earlier purchases
• B/S shows the ending inventory at a value nearer the current market price
• ending inventory represents cost of recent purchases
• higher income and ending inventory value is reported

Question 20

LIFO

Answer 20

last in first out

• goods received last are issues or received first
• cost of goods sold represents costs of recent purchases
• B/S is distorted because ending inventory is under-valued at older potentially outdated cost
• ending inventory represents cost of earlier purchases
• lower income and ending inventory value

Question 21

Latest purchase price

Answer 21

uses the latest purchase price in valuing the ending inventory

Question 22

What counts as inventory?

Answer 22

1. finished goods held for sale in the ordinary course of business
2. goods held for use in the production of finished goods

Question 23

ABC Method

Answer 23

effort, time and money for inventory control should be allocated among products according to their value