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Objective
Food Purchasing & Receiving Control
• By the end of this course you will be able to:
Outline the purchasing process in F&B
Distinguish perishable & non perishable food
Calculate quantity standards
Give 6 reasons for establishing Purchase
Specification
Compare perpetual inventory & periodic order
List the normal sources of supplies for F&B
Explain “Centralized Purchasing” & “Standing Orders”
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Review of the Purchasing Cycle in the Hotel
Objective
7 Store Products
5 Purchase Order
Record
Receiving
Purchasing
Accounting
Identify the purpose of receiving control
List and explain 3 standards established to
govern the receiving process
Explain the receiving process
List the duties of the receiving clerk
Identify the information listed on invoices
List the information contained on the
receiving clerk’s daily report
2 Issue Required Products
8 Invoice
F&B Dep.
3 Purchase Requisition
4 Purchase Order/
Record
3’ Selling
Producing and
Serving
9 Check
Supplier
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Introduction
Review: The Control Process
• In all F&B Businesses, we make purchases (by
phone, fax, email, letter, sales person…) we receive
the supplies when they arrive, we inspect quantity,
quality and prices, we store the supplies (dry,
refrigerator, freezer). When needed food is issued
for preparation, sold and served to guests.
• At each of these steps, unwanted costs can
develop.
•
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5 Purchase Order
Record
1 Requisition Form
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Storeroom
6 Deliver Product &
Invoice
• By the end of this course you will be able to:
The 4 steps of the control process applied to
Purchasing and Receiving:
1. Establish Standards and SOP for operations
2. Train all individuals to follow established
standards and SOPs
3. Monitor performance and compare actual
performances with established Standards
4. Take appropriate action to correct deviations
from Standards
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Responsibility of Purchasing
Perishable & Non-perishable
• One or more persons may be involved (owner, chef,
purchasing department)
• But only one person should have the authority to
purchase food. This person can then be held
accountable for the system of control procedures
established by the food controller.
• Perishable foods are:
Fresh food that have short useful life after they have
been received (lettuce, fresh fish loose their quality
very quickly. Meat and cheeses also deteriorate fast)
High risk of spoilage!
• Non-perishable foods are:
Those that have longer shelf lives. Purchased in
cans, bottles, bags and boxes. Frozen food is
considered non perishable. Low risk of spoilage
• Geographic location often determine if a food item is
considered perishable or not (close or not to production)
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Developing Standards & SOP for purchasing
Establishing Quality Standards
• The primary purpose of purchasing is to ensure a
continuing supply of sufficient quantity of the
necessary foods each of the quality appropriate to
its intended use, purchased at the most favorable
price. Therefore Standards should cover:
• Standard Purchase Specifications (“specs”) example:
Quality of Food Purchased
Quantity of Food Purchased
Prices at which Food is Purchased
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Salmon
• Whole, dressed, fresh day of delivery
• Minimum 8lbs, maximum 12lbs
• Fish firm and elastic, meat pink and slightly
translucent
• Gills free from slime and reddish-pink in color
• Scales adhering tightly to the skin
• No stale odors of ammonia
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6 reasons why Purchase Specs are useful
6 reasons why Purchase Specs are useful
1. They force managers to determine exact
requirements in advance for any product
2. They are useful in menu preparation. For
example, it is possible to use one cut of meat,
purchased to specifications to prepare several
different menu items.
3. They eliminate misunderstanding between
steward and purveyor.
4. Circulation of “specs” for one product to
several purveyors makes true competitive
bidding possible
5. They eliminate the need for detailed verbal
descriptions of product each time it is
ordered
6. The facilitate checking at receiving
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Establishing Quantity Standards
Establishing Quantity Standards
• Purchase Specs do not need to be updated often,
however Quantity Standards must be reviewed and
revised regularly.
• Procedures for determining purchase quantities
differ from Perishable and Non-perishable
• Perishable
In F&B operations we always use products on
hand (in stock) before purchasing additional
quantities.
So we always must know what we have in
stock
We must decide the total quantity needed
The difference between the 2 is the correct
amount to order.
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Establishing Quantity Standards
Establishing Quantity Standards
• Perishable
• Perishable
The quantity needed is called the PAR or
PAR STOCK. (but the term is used in a
variety of ways in the industry)
Let’s say that PAR STOCK is defined as the
quantity of any item required to meet
anticipated needs in some specific upcoming
period
A basic requirement of the purchasing routine is that
the steward take a daily inventory of perishable on the
Market Quotation List
On Hand
20
10
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Duck
Breast
10
To Order
--
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Establishing Quantity Standards
• Non-perishable
• Maintaining inventories: 2 methods:
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Quotations
12
Establishing Quantity Standards
Although non perishable foods do not present
the problem of rapid deterioration they
represent considerable amount of money
invested in material in storage.
The goal is to minimize stock without “running
out” of any item.
Always label fixed locations for products, it is
easier to find products and avoids multiple
locations of food and high stocks.
CC3
Article:
Par
POULTRY
Chicken
32
Breast
PERIODIC ORDER METHOD (in contrast to
methods for ordering perishables, this method
allows less frequent ordering.
With periodic order methods, the steward
orders on a regular basis (weekly, monthly…
depending of storage space and policies)
He conducts a physical inventory and orders
as follow:
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Establishing Quantity Standards
Exercise
• Calculation of the amount of each item to order:
• The Grand View Bistro orders non perishable every two
weeks.
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
One item to be ordered is “Crushed Tomatoes”
purchased in cans, packed 6 cans per case. The
item is used at the rate of 7 cans per week, and
delivery normally takes 5 days from the date an order
is placed. If the steward has 9 cans on hand, how
many cans should he order?
• Include a “safety stock” equal to the quantity used during
delivery period)
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Establishing Quantity Standards
Establishing Price Standards
• Maintaining inventories: 2 methods:
• Having established Purchase Specification and
inventory procedures to determine Quantities to
order, one can turn to the question of Price.
PERPETUAL INVENTORY METHOD
• To ensure that quantities purchased are sufficient
to meet anticipated nee without being excessive
• To provide effective control over those items that
are being stored for future use
Food purchases are made on the basis of
competitive prices obtained by several
possible suppliers
Availability of supplies varies from a location
to another (City, Island, Jungle resort…)
Excel exercise: Create a perpetual inventory
card from the following sample.
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Categories of Suppliers Operators deal with:
Means of obtaining Price Quotations
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Wholesalers
Local producers
Manufacturers
Packers
Local farmers
Retailers
Cooperative Associations
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Telephone
Fax
Quotation Sheets obtained by mail
Information supplied by salespersons who call on
customers
• Direct computer links with purveyors via the internet
or dedicated phone lines
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Prices of Perishables
Prices of non-perishables
• Prices of perishables generally change daily.
• Stewards prefer to deal with a small quantity of
suppliers for non-perishables (use of wholesale
supply houses by mail, fax and supplier webpage)
Contact several suppliers and use the Market
Quotation List
Beside Price, the steward should consider
delivery time, manager’s preferences for a
supplier, reliability of supplier in meeting the
Specs, and the number of items to order.
Note: Stewards don’t automatically choose
the lowest prices. (depending of minimum
order sizes, credit options, delivery time and
other factors)
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Centralized Purchasing
Advantages of Centralized Purchasing
• Used in Chain operations or small groups of
independent operators.
• Requirements of a restaurant is relayed to a central
office which determines total requirements of all
unites and then purchases that total either for
delivery to the individual units by the dealer of for
delivery at the central warehouse.
• Obtain lower prices because of volume purchased
• Desired quality is obtained easily because the buyer
has more market choice
• Larger inventories can be maintained ensuring
reliable supply to individual units
• Lower the possibilities of dishonest purchasing in
individual units
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Disadvantages of Centralized Purchasing
Standing Orders
• Each unit must accept the standard item in stock
and has little freedom to purchase for its own
particular need
• Individual units may not be able to take advantage
of local “specials” at reduced prices
• Menus are normally standardized, thus limiting the
individual unit manager’s freedom to change a
menu
• Arrangement of delivery of goods without specific
orders. Example:
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One arrangement could be the daily delivery
of 12 baguettes (bread) by the local baker.
The number remains constant unless
specifically changed by the steward.
Another arrangement could be the daily
replenishing of Milk up to a par of 20 Liters
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Receiving Controls
Establishing Standards for Receiving
• Ordering specific quantities and qualities at optimum prices
does not guarantee that the product ordered will actually be
delivered
• Therefore, the objective of Receiving is to inspect what you
expect:
• The standards must enable verification of
Quantity
Quality
Price
The right quality (check Specs/ Invoice/ Product)
The right quantity (watch for extra deliveries!)
The right price (same as when ordered was placed)
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The Invoice
A standard procedure for Receiving
• Every food delivery is accompanied by a document
that lists the items being delivered: THE INVOICE
which is the same as a bill
• Usually comes in duplicate: 1 for the receiving clerk,
and 1 to sign and return to delivery person.
1. Verify Quantity, Quality and Price for each item delivered
2. Acknowledge that quantity, quality and price have been
verified by stamping the invoice with the rubber invoice
stamp provided for that purpose
3. List all invoices for food delivered on a given day on the
receiving Clerk Daily Report for that day and complete the
report as required, or enter appropriate information
directly in the computer system
4. Forward completed paperwork to proper personal
5. Move food to appropriate storage area
Exercise: Create the following Invoice on your
favorite Spreadsheet
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Checking Quantities
Checking Quality
• This entails weighting, counting, or otherwise
enumerating the quantity of a particular food
delivered by the vendor and then checking to see
that the same quantity appears on both the
INVOICE AND THE ORDER.
• This part requires knowledgeable inspection of delivered
foods and careful comparison of perceived quality with the
quality established in the Standard Purchase Spec’.
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Salmon
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•
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Whole, dressed, fresh day of delivery
Minimum 8lbs, maximum 12lbs
Fish firm and elastic, meat pink and slightly translucent
Gills free from slime and reddish-pink in color
Scales adhering tightly to the skin
No stale odors of ammonia
• Keep in mind that Clerks receive products they do NOT use…
products then do NOT always understand. Operators often require
another employee (a chef)
to inspect for quality.
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Checking Price
Posting Invoices on the Daily Report
• Stamping the invoice
• The Receiving Clerk Daily Report is an important
accounting document
Verify the date on which food was received
Verify the arithmetical accuracy of the bill
Sign and stamp to vouch for the accuracy of
quantities, quality and prices.
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Directs and Stores
Forwarding Completed Paperwork
• Directs
• Once the receiving clerk has stamps and signed all
invoices, completed the Daily Report, this sheet, with the
invoices attached is sent to the steward who signs the
invoices and route them to the food controller who checks
the arithmetical accuracy of each invoice. When the
checking is complete, the controller sends the receiving
sheet and invoices to accounting where figures will be
entered in the purchase journal.
• The Cost controller will use the DIRECT total to compute
the daily food cost
Are those extremely perishable food which are
purchased on a more or less daily basis for
immediate use. And therefore issued immediately to
outlets and charged to food cost as received.
• Stores
Are those foods that in contrast will not diminish
significantly in quality (not extremely perishable) if
they are not used immediately, they are transferred to
the storeroom.
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Moving all Delivered food
Completing the Control Process
• Once deliveries have been received, food must be
stored and secured immediately to prevent spoilage
• …or theft
• The 4 steps of the control process:
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Example here
In food control, all foods that are charged to
cost immediately are called DIRECTS and all
foods that are charged to cost when issued
from inventory are called STORES.
1.Establish Standards and SOP for operations
2.Train all individuals to follow established
standards and SOPs
3.Monitor performance and compare actual
performances with established Standards
4.Take appropriate action to correct deviations
from Standards
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Chapter Essentials
• The application of the 4 steps control process to Food
Purchasing and Receiving
• Responsibilities in establishing Standard Purchase
Specification, Quantity Standards and obtaining optimum
Prices
• The difference between Perishable and Non Perishable
foods and between Direct and Sores food categories
• Overview of documents (Inventory Cards, Invoices and
Receiving Clerk Daily Report)
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