W9 Procurement Flashcards
Define procurement
systematic exchange between seller and buyer to
obtain goods & services
-determining types of products needed, making purchases, receiving & storing shipments,
administering purchase contracts.
What part does procurement play in the systems approach?
first step of transformation
What activities exist in procurement?
- purchasing
- receiving
- storage
- inventory control
What is the proper purchasing procedure?
1.recognition of need
2.description of needed item
3.authorization of purchase requisition
4.negotiation w/ potential suppliers
5.evaluate proposals and place order
(follow up of order)
6.verification invoice and delivered material
7. closure of purchase record, payment for materials
Purchasing can be viewed in two ways, what are they and give examples for each.
1.cost center: generated profit does not cover expenses
eg. patient food services
2.profit center: generates revenue greater than expenses
eg. hospital retail cafeteria
What is the marketing channel order?
producer>manufacturer > distributor>suppliers>customers
What groups are considered for market regulations?
-government
- consumers
-industry
What government regulations are there for the market?
-legislation that protects consumer
- promotes competition among industries
What industry regulations are there for the market?
- satisfies consumer while making profit
- responsible for complying with legislation
What consumer regulations are there for the market?
- alerts government about food safety, nutrition, environment concerns
-expects industry to produce appropriate products
What knowledge is needed to make purchases?
- products to be procured
- market
-buying procedures - market trends
What is the primary function of the buyer?
procure required products for desired use at minimal cost
- conduct value analysis (quality & price relationship)
- make or buy decisions
What are the factors of a make or buy decision?
- quality
-quantity
-service
-cost
Define specifications and state the different types.
list of detailed characteristics desired in product for specific use.
1. Technical specifications (eg. grade A meat)
2. Approved brand specifications (manufacturer specifications)
3. Performance specifications (eg. dishes/minute cleaned)
Specifications for food products should include…
- name of product/standard
- federal grade, brand
- size of container
-count/container
-unit for price based on
Criteria written for specifications should be…
- clear, simple, specific,
- consistent with market
- verifiable w/ label statements, grades, weight
- fair to supplier, protect buyer
- realistic quality standards
- able to be met by several competitors
What are the different types of purchasing?
formal (w/contract) & informal (by phone or in person)
What legal considerations need to be considered during purchasing?
law of agency: buyer’s authority to act for organization
law of warranty: government institutions must use competitive bidding
What are the different methods of purchasing?
- Independent purchasing: done by unit/ department of organization
- Centralized purchasing: done by one person
What are the pros of centralized purchasing?
Pros:
-better control; one complete set of records
- development of personnel with specialized knowledge, skills
- better performance in other departments
-economic & profit potentials of purchasing, making it a profit > cost center
What are the cons of centralized purchasing?
Cons:
- buyers are not experts in specific product lines such as food
What are methods of purchasing are there?
- Group purchasing
- Warehouse club purchasing eg. Costco
- Just in time purchasing- reduce inventory, lead time
What does a supplier evaluation consist of?
-Current suppliers need to be monitored to be sure they are meeting performance expectations
-New suppliers need to be screened to determine if they should be considered in future
What is the most important decision in purchasing?
choosing your supplier :)
Ideal method of purchasing based on…
price, quality, delivery from supplier
what are the different types of purchasing records and what is the purpose of each?
- purchasing requisition: first doc in purchasing process; used to request food items
- purchase order: completed by buyer and given to supplier; outlines specific terms agreed upon
- Invoice: prepared by supplier
what should be considered for receiving practices?
- competent personnel
- facilities & equipment (adequate space, HACCP)
- Process (inspect against purchase order and invoice, accept/reject order, compete receiving records, remove to storage)
