Suppliers/operational process

Question 1

What are the two main types of supplier that hospitality businesses buy from?

Answer 1

• Wholesalers

- Retailers

Question 2

What 3 groups are wholesalers and retailers split into?

Answer 2

• National
• Local
• Specialist

Question 3

What’s a cash and carry shop?

Answer 3

Shops like Makro are examples of cash and carry shops. They stock large quanitites of items and sell them in bulk to smaller businesses. Many hospitality businesses go to the cash and carry to buy non-perishable goods such as cleaning materials, toilet paper and goods in tins, packets and jars.

Question 4

What’s a Daily Market?

Answer 4

A market some chefs may choose to purchase fresh produce

Question 5

What’s a nominated supplier?

Answer 5

A supplier that the hospitality business will have a contract with for a period of time. The arrangements will suit both parties because the supplier can regularly supply goods to the business and the business can negotiate over the price they pay.

Question 6

What’s an advantage of having a company nominated supplier?

Answer 6

• Hospitality businesses can negotiate the price they pay, especially if buying in bulk
• Goods are available on credit

Question 7

What’s a disadvantage of having a company nominated supplier?

Answer 7

• If tied by a contract, a hospitality business might not be able to get goods or services from a cheaper supplier
• The supplier may start giving them lower quality items if they’re on contract

Question 8

What’s an advantage of getting supplies from the daily market?

Answer 8

• Fresh goods are available everyday

- Locally grown produce that appeals to customers

Question 9

Whats a disadvantage of getting supplies from a daily market?

Answer 9

• Prices could be higher

- Limited amount of items maybe available each day

Question 10

What’s an advantage to using a cash and carry?

Answer 10

• Good for buying non-perishable items in bulk

Question 11

What’s a disadvantage of using a cash and carry?

Answer 11

• Could involve travelling some distance and involves time and transport

Question 12

An advantage of a Specialist supplier?

Answer 12

-Good for businesses that specialise in a particular area, eg. organic restaurants and cafes

Question 13

Disadvantage of a Specialist supplier?

Answer 13

• There are fewer specialist suppliers, therefor prices can be higher

Question 14

What is the order of the purchasing cycle?

Answer 14

• Purchasing order
• Delivery note
• Returns note
• Credit note
• Invoice
• Statement

Question 15

What is gross profit?

Answer 15

Gross profit is calculated as revenue (the income made from selling goods) minus all costs related to those sales

Question 16

what is Net Profit?

Answer 16

Net profit is the amount of money left after all of a businesses’ expenses have been paid out of total revenue

Question 17

What is the gross profit margin?

Answer 17

The gross profit margin represents what is left of the income from the sales after the cost of goods sold has been paid.