Chapter 4
Product Receiving,
Storing, and Issuing
Principles of Food and
Beverage Management
Learning Objectives
After completing this chapter, you should be able to:
• Explain each of the steps in an effective product
receiving process.
• State procedures for maintaining product quality,
reducing the possibility of stock outs, and controlling costs
during storage.
• Describe procedures for controlling product costs when
products are issued from storage to production areas.
• Explain ways that technology can assist with receiving,
storing, and issuing tasks.
Chapter 4 Product Receiving, Storing, and Issuing
PRODUCT RECEIVING PROCEDURES
Getting Ready for Receiving
Receiving Staff
Receiving Area
Receiving Equipment
Chapter 4 Product Receiving, Storing, and Issuing
Steps in Product Receiving
Compare Delivery Invoice and Purchase Order
Confirm Product Quality
Sign Delivery Invoice
Complete Receiving Report
Chapter 4 Product Receiving, Storing, and Issuing
Special Receiving Concerns
Ensuring Quality
Ensuring Food Safety
Implementing Security Concerns
Managing Credit Memos
Chapter 4 Product Receiving, Storing, and Issuing
Chapter 4 Product Receiving, Storing, and Issuing
Resolving Receiving Challenges
Chapter 4 Product Receiving, Storing, and Issuing
PRODUCT STORAGE PROCEDURES
Storage Overview
Chapter 4 Product Receiving, Storing, and Issuing
Storage and Inventory Basics
Quality Concerns
Storage Locations
Record-Keeping Requirements
Chapter 4 Product Receiving, Storing, and Issuing
Managers Math
Answer the Questions:
1.
2.
Chapter 4 Product Receiving, Storing, and Issuing
Costs of Goods Sold
Chapter 4 Product Receiving, Storing, and Issuing
Security Concerns during Storage
Chapter 4 Product Receiving, Storing, and Issuing
PRODUCT ISSUING PROCEDURES
Importance of Effective Issuing
Steps in Product Issuing
Chapter 4 Product Receiving, Storing, and Issuing
TECHNOLOGY AND RECEIVING, STORING, AND
ISSUING
Chapter 4 Product Receiving, Storing, and Issuing - Summary
1. Explain each of the steps in an effective product receiving
process.
•
Effective receiving requires staff who are properly trained to perform
receiving tasks.
•
They must know how to recognize proper quality and complete
required delivery documents.
•
The receiving area must be well planned and located, if possible,
close to where deliveries will be made.
•
Adequate space is needed to check incoming products.
•
Tools and equipment such as pocket thermometers, a platform scale,
and transport equipment are also needed.
•
Steps in product receiving include comparing the delivery invoice
and purchase order, confirming product quality including checking
temperature, signing the delivery invoice, and moving products to
storage.
•
A final step involves completion of the receiving report.
Chapter 4 Product Receiving, Storing, and Issuing - Summary
1. Explain each of the steps in an effective product receiving process continued…
•
Receiving staff must use proper food safety practices and must
carefully check all incoming products to confirm that the operation
receives all of the products it is paying for.
•
If products do not meet standards, a credit memo should be issued.
Chapter 4 Product Receiving, Storing, and Issuing - Summary
2. State procedures for maintaining product quality, reducing the
possibility of stock outs, and controlling costs during storage.
• Dry, refrigerated, and frozen storage areas must be maintained at the
proper temperatures.
• Cleanliness is important, and several food safety practices must be
implemented to help maintain product quality during storage.
• Storage locations and capacities often relate to production volumes
and are affected by the frequency of deliveries.
• Effective managers routinely calculate inventory turnover rates and
determine the costs of products in inventory.
• Then they can calculate the monthly cost of goods sold (food or
beverage cost) for comparison with the operating budget and
completion of the income statement.
Chapter 4 Product Receiving, Storing, and Issuing - Summary
2. State procedures for maintaining product quality, reducing the possibility of
stock outs, and controlling costs during storage continued…
• Managers should control products during storage as they would
control money in a bank vault.
• Storage areas must be physically secure, and a perpetual inventory
system that tracks the quantities of expensive and theft-prone items is
important.
Chapter 4 Product Receiving, Storing, and Issuing - Summary
3. Describe procedures for controlling product costs when products
are issued from storage to production areas.
• Effective issuing helps ensure that products removed from storage
generate the expected amount of revenue.
• Most operations do not have full-time storeroom staff.
• Instead, they develop practical issuing systems that closely control
the most expensive items.
• Issue requisitions are used to access perpetual inventory products that
are kept under lock.
• Employees may then have access to other products without an issue
requisition.
• Nonemployees should never have access.
Chapter 4 Product Receiving, Storing, and Issuing - Summary
4. Explain ways that technology can assist with receiving, storing,
and issuing tasks.
• Technology eliminates much of the paperwork involved in processing
information related to receiving, storing, and issuing.
• Incoming products can be checked against electronic purchase
orders without the need to print copies.
• Bar code systems allow product quantity and cost information to be
automatically issued into and removed from the property’s inventory
management system.
• Electronic versions of purchase specifications, delivery schedules, and
communication among employees involved with purchasing enable
the process to flow smoothly.
• Technology may be increasingly helpful even to properties of
relatively small production volumes.
Chapter 4 Product Receiving, Storing, and Issuing
Key Terms:
Backorder An order that a vendor cannot fill or ship immediately.
Broken case storage An area used to store opened purchase units of
products that have been issued.
Cost of goods sold (COGS) The cost to purchase the products that
generate the food or beverage revenue.
Credit memo A document used by accounting staff to adjust
information about product quantities and A document used by
accounting staff to adjust information about product quantities and
costs included on a delivery invoice to ensure that the operation pays
only for the actual products that are acceptable and have been
received.
First in, first out (FIFO) An inventory system in which products that have
been in storage the longest are the first issued.
Income statement A document that summarizes the operation’s
profitability for an accounting period.
Chapter 4 Product Receiving, Storing, and Issuing
Key Terms continued:
Inventory turnover rate The number of times in each accounting period
(usually a month) that the quantity of food or beverages in inventory
must be purchased to generate the food or beverage revenue for the
accounting period.
Issue requisition A document that authorizes an employee to remove
products from storage areas.
Marking (product) Writing the date of receipt and the purchase unit
price on the incoming product.
Operating budget A financial plan that estimates revenues and
expenses for a specific time period.
Package inspection program (employee) A policy that discourages
employees from bringing backpacks, shopping bags, and other large
packages to work and indicates that packages may be inspected
when the employees leave work.
Chapter 4 Product Receiving, Storing, and Issuing
Key Terms continued:
Receiving report A report used in operations that calculates food costs
on a daily basis. The report separates delivery invoice information used
for daily food costing.
Reduced oxygen packaged (ROP) Food contained in a package in
which oxygen (a) has been removed, (b) has been displaced with
another gas or combination of gases, or (c) something else has been
done to reduce the oxygen content to a level below that which is
normally found in air.
Slack-out seafood Seafood that was frozen and then thawed
to appear fresh so it could be sold at a higher price.
Transfer An adjustment to cost of goods sold that increases or decreases
food or beverage expense to match product costs with the revenue
generated by the product’s sale.
Workflow The movement of products through work stations.
Chapter 4 Product Receiving, Storing, and Issuing
Chapter Images
Chapter 4 Product Receiving, Storing, and Issuing
Chapter Images continued