Chapter 4
Food Purchasing and
Receiving Control
Principles of Food, Beverage, and Labour Cost Controls,
Canadian Edition
Learning Objectives
• After reading this chapter, you should be able to:
• 4.1 Describe how quality and quantity standards for food purchases are
established.
• 4.2 List six reasons that standard purchase specifications are important and provide
examples of specifications for both a perishable and a nonperishable food item.
• 4.3 Describe the process used to determine the quantity of perishable and
nonperishable food to be purchased.
• 4.4 Determine order quantities using the periodic and perpetual order methods.
• 4.5 Describe the procedures for purchasing perishable and nonperishable foods at
the most favourable prices.
• 4.6 Describe the various purchasing methods.
• 4.7 Describe the duties of a receiving clerk, and outline the essential equipment and
supplies needed for proper receiving.
• 4.8 Describe the steps in a standard receiving procedure.
• 4.9 List the information contained in the receiving clerk’s daily report, and explain
the report’s function.
• 4.10 Explain the difference between directs and stores and provide examples of
each.
Responsibility for Purchasing
• Who does the purchasing?
• Owners
• Managers
• Chef
• Steward
• One person responsible so they can be held
accountable
Perishables & Non-perishables
• Perishables: those items that are typically fresh
foods, and have a relatively short shelf life
• Non-perishables: those food items that have a
relatively longer shelf life
• Groceries
• Staples
• Storeroom items
Developing Standards and Standard
Procedures for Purchasing
• Quality of food purchased
• Quantity of food purchased
• Prices at which food is purchased
Standard Purchase Specifications
• They force owners or managers to determine
exact requirements in advance
• They are often useful in menu preparation
• They eliminate misunderstandings between
stewards and purveyors
• Allows for true competitive bidding
• Eliminates need for detailed verbal descriptions
• They facilitate checking food as it is received
Food Specifications Sample
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Black Angus Strip Loin, short cut
IMPS number 180
Boneless 25 cm trim
Canada AAA
Range #2, minimum 5.5 kg, maximum 6.5 kg
1.0 to 2.0 cm fat, except for seam fat
Chilled upon delivery
Free from objectionable odours, no evidence of
freezing
Market Quotation List
• Market quotation list: a form often used as a
tool by food purchasers for
• Taking daily inventory of perishables
• Determining suitable order quantities
• Recording market quotations
• Selecting vendors
• Par stock: maximum quantity that should be on
hand at any given time
Periodic Order Method
• Periodic order method:
Amount required for the upcoming period
- Amount presently on hand
+ Amount wanted on hand at the end of the
period to last until the next delivery
= Amount to order
Periodic Order Method
• Periodic order method example:
14 cans required
- 9 cans on hand
+ 10 cans to be left at the end of the period
(desired ending inventory)
=15 cans to be ordered on this date
Desired Ending Inventory (DEI)
• The quantity sufficient to last until the next delivery
is received
Daily Usage
Number of days in
delivery period
X
2 cans per day
10 cans normal
usage
X
5 days in delivery
period
+ 50% safety factor =
=
=
Normal usage
10 cans normal
usage
15 cans DEI
Perpetual Inventory Method
• Perpetual inventory method:
Par stock
- Reorder point
= Subtotal
+ Normal usage until delivery
= Reorder quantity
Perpetual Inventory Method
• Perpetual inventory method example:
20 par stock
- 15 reorder point
= 5 subtotal
+ 10 normal usage until delivery
= 15 reorder quantity
Determinants for Maximum
Quantity of Perishables on Hand
• Storage space
• Limits on total value of inventory prescribed by
management
• Desired frequency of ordering
• Usage
• Purveyors’ minimum order requirements
Suppliers to Foodservice Operators
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Wholesalers
Local Producers
Manufacturers
Packers
Local farmers
Retailers
Cooperative associations
Means of Obtaining Price Quotes
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Telephone
Fax
Quotation sheets obtained by mail
Fax modem
Information supplied by salespersons
Direct computer links with purveyors via the
internet or dedicated telephone line
Centralized Purchasing
• Advantages:
• Foods and beverages can be purchased at lower
prices because of volume
• Desired quality can be obtained more readily
because the steward has a greater choice of
markets
• Foods can be obtained that meet specs
• Larger inventories can be maintained, ensuring
reliable supply to individual units
• Possibility of dishonest purchasing in individual
units are greatly reduced
Centralized Purchasing
• Disadvantages:
• Each unit must accept the standard item in stock
and has little freedom to purchase for its own
particular needs
• Units can’t take advantage of local specials
• Menus are ordinarily standardized, limiting the
individual unit managers’ freedom
Written Purchase Order
Advantages include the following:
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Written verification of quoted price
Written verification of quantity ordered
Written verification of the receipt of all goods ordered
Written and special instructions to the receiving clerk,
as needed
• Written verification of conformance to product
specification
• Written authorization to prepare vendor invoice for
payment
Written Purchase Order
The written Purchase Order form should contain space
for the following information:
Item Name
Spec #, if appropriate
Quantity Ordered
Quoted Price
Extension Price
Total Price of Order
Vendor Information
Purchase Order Number
Date Ordered
Delivery Date
Ordered by____
Received by_______
Delivery Instructions
Comments
Purchasing Methods
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One-Stop Shopping (One Purveyor)
Open Bid
Cost Plus
Contract Purchasing
Food Brokers
Standing Orders
Receiving Standards
1. The quantity delivered should be the same as
the quantity listed on the Market Quotation
List and the invoice
2. The quality delivered should conform to the
establishment’s standard specifications
3. The prices on the invoice should match those
circled on the Market Quotation List
4. The goods are received at the time specified
Sample Invoice
To:
Bistro Quatre
Quantity
20
20
Unit
lbs.
lbs.
Meats R’ Us
777 Cow Pasture Way
Calgary, Alberta
Date: October 3, 20XX
Description
Unit Price
Beef tenderloin 9.20
Leg of lamb
12.40
Amount
184.00
248.00
$432.00
Inventory Control
• Regardless of the methods used by employees
to requisition food and beverage products, or
management to issue these, inventory levels will
be affected.
• It will be your responsibility and that of your
purchasing agent to monitor this movement and
purchase additional products, as needed.
• Re-stocking the inventory is critical if product
shortages are to be avoided and if product
necessary for menu item preparation is to be
available.
Inventory Control
• Operators must be careful not to overload
storage capacity. Increased inventory of items
generally leads to greater spoilage and loss due
to theft.
• Shelf life is the amount of time a food item
retains its maximum freshness, flavour, and
quality while in storage. The shelf life of food
products varies greatly.
• The cost to the vendor for frequent deliveries
will be reflected in the cost of the goods to the
operator.
Determination of Inventory Levels
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Storage capacity
Item perishability
Vendor delivery schedule
Potential savings from increased purchase size
Operating calendar
Relative importance of stock outages
Value of inventory dollars to the operator
Receiving Procedures
1. Verify the quantity, quality, and price for each
item conforms exactly to the order placed
2. Verify invoice with rubber invoice stamp
3. List foods delivered each day on the receiving
Clerk’s Daily Report for that day
4. Forward paperwork to proper personnel
5. Move food to appropriate storage areas
The Invoice Stamp
• The invoice stamp provides for:
• Verification of the date food received
• Signature of the receiving clerk who vouches for
the accuracy of the order
• Steward’s signature, acknowledging delivery of
food items
• Food controller’s verification calculations are
correct on the invoice
• Signatory approval of the bill for payment by an
authorized individual before a check is drawn
Receiving Clerk’s Daily Report
• Directs: foods that extremely perishable by
nature, purchased daily.
• For immediate use
• Considered to be issued on delivery
• Go directly onto today’s food cost
• Stores: perishable but have a relatively longer
shelf life.
• Not for immediate use
• Included on food cost when they are issued
Training for Receiving
• The great problem in employing receiving
personnel is with the vast amount of knowledge
of foods these workers require
• This may explain why some restaurants do not
require quality checks upon delivery
• Someone has to do it!!!
• If not your customers will!!!
Key Terms
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Bin card, p. 105
Centralized purchasing, p. 115
Contract purchasing, p. 117
Cost plus, p. 117
Desired ending inventory (DEI), p. 106
Directs, p. 122
Food brokers, p. 117
Invoice stamp, p. 122
Invoice, p. 119
Market Quotation List, p. 101
Nonperishable foods, p. 97
One purveyor buying, p. 116
Open bid, p. 117
Par, p. 101
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Par stock, p. 101
Periodic order method, p. 104
Perishable foods, p. 96
Perpetual inventory card, p. 108
Perpetual inventory method, p. 107
Purchase Journal Distribution, p. 124
Purchase order, p. 116
Receiving Clerk’s Daily Report, p. 122
Reorder point, p. 108
Reorder quantity, p. 110
Standard purchase specifications, p. 99
Standing orders, p. 117
Stores, p. 123
Chapter Web Links
• Comtrex POS software:
www.comtrex.com/html/restaurant_management_software.html
• Restaurant Plus: www.restaurantplus.com
• Canadian Food Inspection Agency:
www.inspection.gc.ca/english/toce.shtml
• Canadian Meat Business: www.meatbusiness.ca/
Copyright