Product Selection/Purchasing

Question 1

What is procurement?

Answer 1

securing the food/supplies/equipment needed by the transformation subsystem

Question 2

What are the 2 elements of procurement?

Answer 2

sourcing & purchasing

Question 3

who/what is involved with sourcing?

Answer 3

contracts, supplier identification/management, requirements, RFQ

Question 4

what is involved with purchasing?

Answer 4

receipts, invoice matching, purchase requisition/order

Question 5

What must procurement activities do?

Answer 5

align w/ menu, consider budget, track foods moving in/through/out, respect policies/legislation

Question 6

What are the 3 options a foodservice manager has for production of a menu item?

Answer 6

• produce completely from raw
• purchase some ingredients and assemble
• purchase item in final form from wholesale

Question 7

What is the ultimate influencer for food procurement?

Answer 7

decision to make or buy

Question 8

What are the 4 considerations of make-or-buy decisions?

Answer 8

quality - form must align with needs
quantity - have to be able to get amount you need
service - have to have it if committing to serving it
cost - value analysis

Question 9

What is a value analysis?

Answer 9

comparing the cost of making it yourself, different versions of making it, and of buying it pre-made

Question 10

what are specifications?

Answer 10

detailed characteristics desired in a product for a specific use, safeguard the quality and tell vendor exactly what you need/want

Question 11

what types of specifications are there?

Answer 11

technical - quality specifications (ie. sorting foods based on weight/size/quality)
approved brand - foods required using specific brands (ie. a certified gf brand cant be subbed for something that may not be guaranteed safe)
performance - ability to perform in a desired way (ie. certain concentration of kitchen cleaner)

Question 12

what are the elements of a specification?

Answer 12

basic information - name, grade/brand, size, count/container, acceptable subs
writing criteria - all critical info, within availability of market, verifiable, realistic, able to be met by >1 bidder

Question 13

what are the 9 steps in the procurement process?

Answer 13

1. identify goods/services company needs
2. submit purchase request
3. assess/select vendors
4. negotiate price/terms
5. create purchase order
6. receive/inspect goods
7. conduct 3-way matching
8. approve invoice/arrange payment
9. keep recordsw

Question 14

define 3-way matching

Answer 14

before issuing a payment its comparing the purchase order, invoice, and goods receipt to ensure they all match + have different people doing each check = eliminates fraud and provides a record

Question 15

what is the goal of purchasing?

Answer 15

secure the products needed at the BEST PRICE of the best specified quality delivered as needed in a safe/sanitary way

Question 16

what goes into selecting a purchasing method

Answer 16

considering size/philosophy/distributor location/storage facilities, determine purchasing volume/delivery frequency/available personnel

Question 17

what are the 2 main purchasing methods

Answer 17

• informal purchasing
• formal purchasing

Question 18

what are the buying methods in formal purchasing?

Answer 18

• single sourcing
• group purchasing
• centralized purchasing
• just in time purchasing
• prime vendor agreements

Question 19

describe group vs. centralized purchasing

Answer 19

group = external, requires lots of collaborations between multiple smaller units that agree to buy together to achieve better prices/benefits, can mimic centralized

centralized = internal, one department controls all the purchasing for the system can have a lot of buying power

Question 20

what is informal purchasing

Answer 20

purchasing without agreements, going out to buy as you need

Question 21

how does a system identify their buying needs?

Answer 21

• the menu
• forecasted production needs
• PAR threshold

Question 22

what is a PAR level

Answer 22

periodic automatic replacement
- min. amount of inventory needed to meet customer demand while maintaining cushion for unexpected demand
- aka: safety stock

Question 23

how to calculate PAR

Answer 23

calculate 20-30% more than the weekly invoice stock, keep that as safety stock

Question 24

why are purchasing records needed?

Answer 24

purchasing is the spending of an organization’s funds = all expenses must be tracked

Question 25

what are the 2 main forms of purchasing records

Answer 25

1. purchase requisition = internal document from foodservice manager to procurement unit that authorizes and shares specifications for foods needed
2. purchase order = document from procurement unit to the vendor that lists the items to be purchased

Question 26

what are the elements of a purchase requisition?

Answer 26

• requisition number
• budget account number
• delivery date
• quantity needed
• specifications

Question 27

What does FOB stand for/mean

Answer 27

free on board
- indicates that price for goods + delivery is at the sellers expense
- used with an identified physical location to determine point where ownership passes from seller to buyer

Question 28

what is FOB origin vs FOB destination

Answer 28

FOB O: buyer assumes title before transportation = assumes risk of transport/responsible for claims or damage

FOB D: seller retains title until delivery = responsible for transport and filing claims or damage

Question 29

what are some ethics to consider in purchasing?

Answer 29

• in healthcare: safeguard public funds
• not accepting gifts from sellers
• avoid conflicts of interest
• act only in public interest/what is approved

Question 30

the activity that ensures products delivered are the ones that were ordered is what (including checking that they match specs/verifying item quality and price)

Answer 30

recieving

Question 31

what is the importance of receiving

Answer 31

• minimizes mistakes with consistent routine procedures
• ensures safety/quality of goods when dates are tagged
• preserves quality and prevents loss

Question 32

what are the steps of the receiving process

Answer 32

1. inspection against purchase order
2. inspection against the invoice
3. acceptance or rejection of orders
4. completion of receiving records
5. removal to storage

Question 33

an accurate list of deliveries + date, supplier name, quantity, and price data are all aspects of what and what do they provide

Answer 33

receiving record
- provides a critical checkpoint in the control system

Question 34

what are the 8 elements of receiving activity

Answer 34

• competent personnel
• facilities + equipment
• specifications (for product standards)
• critical controls in receiving
• sanitation
• adequate supervision
• scheduled hours
• security

Question 35

what is the link between receiving and production

Answer 35

storage

Question 36

what are some threats to storage

Answer 36

theft (premeditated burglary)

pilferage (inventory shrinkage)

Question 37

what is the humidity range for dry storage vs low-temp storage

Answer 37

dry: 50-60%

low-temp: 75-95% (85-95% for perishable foods)

Question 38

what is the process that is used to supply food to production units after it has been received

Answer 38

issuing

Question 39

what type of issuing is not ideal due to its lack of consideration for updated demand

Answer 39

direct issues