procurement 5- inventory last before midterm Flashcards
Inventory
A record of material assets owned by an organization.
Supported by the actual presence of products in the storage areas
Materials held in storage represent a significant investment of the organizations assets
For inventory control to be effective…..
Access to storage areas restricted
Authorized requisitions for removing goods from storage required
Inventory levels need to be monitored
Maintenance of accurate records
Record keeping required for….
Issuing products
Conducting inventories
Issuing Products
Issuing- process used to supply food to production units after it has been received
Direct issues receiving—->Production: (ex. fresh meat, bread, milk- fresh products)
Storeroom issues: receiving—-> storeroom —>production (ex, canned foods
Storeroom issues require a production (ingredient room) requisition
In larger organization, for example,
Inventory Records!!
Objectives Provide accurate information of food and supplies in stock Determination of purchasing needs Provision of data for food cost control Prevention of theft and pilferage
2 methods of checking inventory
Perpetual Inventory (continuously recorded)
Physical Inventory
Perpetual Inventory
Purchases & issues continuously are recorded for each product in storage, making the balance in stock available at all times
Advantages
Useful guide for purchasing
Provides useful information on fast-moving, slow moving & unusable items
Disadvantages
Time & strict supervision (personnel) required for effectiveness
Restricted to dry & frozen storage
Fast moving products are not kept on perpetual inventory
Not recommended for perishable foods that are received and stored in prod’n area
May result in discrepancies if issues and purchases are not recorded
Requires physical inventory to reconcile actual inventory with computer records (mistakes do happen, not accuratly record what you have, will need to go in and do a physical count of what you have- not always reflecting what you have)
Physical Inventory
Periodic actual counting & recording of products in stock in all storage areas
Frequency
Month-end,
2-3 times/year
Accounting period
The process is simplified by
2 people working together
1 counts & the other enters (usually a supervisor)
Taking inventories by storage areas
Recording information on printed form
Classified then arranged alphabetically or in the same order they appear in the storeroom or perpetual inventory
Organizations using a perpetual inventory system typically will do a physical inventory periodically to reconcile actual inventory with computer records.
Discuss the reasons that a physical inventory be taken in every foodservice establishment on a periodic basis even if a perpetual inventory is kept.
the perpetual inventory could be off, may be a system malfunction, theft, damage, know what you have for making purchases and food cost, highlight which products are outdated / expire, not moving
, making sure things are organised , to determine quantities to keep on hand, to calculate food costs
Calculating Cost of Food
Beginning Inventory \+ Purchases = Cost of Food Available - Ending Inventory = Cost of food used
What inventory issues could impact cost of food used?
over purchase (buy one get one free) food waste improper storage(ex, stored in the wrong area) change in supplier cost theft and pilferage not taking accurate monthly inventroy discarding out of date food
JIT Purchasing
Match purchasing with production for immediate use; not necessary to record in inventory
Deliver only what is needed for a production run
Maintain very low inventory
Ensures fresh products
first in first out- fifo method (are assume to be more expensive)
more conmmonly used because dont want it to expire- useing older items first
LIFO (MORE FOR PERISHABLE ITEMS):
older items are lower priced -last in first out
ACTUAL PURCHASE PRICE
in jan cost 50c but in feb cost 52c
most recent purchase price
weighted
