Receiving, Storing, and Issuing
Chapter 8
Objectives
• Evaluate the receiving process
• Explain the use of a product
specification reference guide and the
buyer’s order form
• Describe product inspections,
discrepancies, product rejections, and
credit memos
Objectives (cont’d.)
• Summarize the storing process
• Define formal and informal issuing
• Describe the use of storeroom
requisitions and purchase requisitions
• Explain the differences between a
physical inventory and a perpetual
inventory
Objectives (cont’d.)
• Identify the hardware and software used
with computerized inventory systems
• Describe the methods used to
determine inventory valuation
• Apply the use of ingredient rooms as
they relate to inventory management
The Receiving Process
• Operator can exercise greatest control
at the receiving dock
– Where the financial, physical, and legal
responsibility for product is transferred
• Receiving department verifies the order
– The three “Q’s” of receiving: quality,
quantity. and quote
Product Inspections
• When setting receiving dock hours
– Consider kitchen needs and when
receiving personnel are available
– Exceptions may need to be made
• Conduct efficient, thorough inspections
of all products
– Specification, quality, and quantity
Product Inspections (cont’d.)
• Reviewing specifications and orders
– Verify delivered goods were ordered
– Blind receiving
• Receiving clerk counts and weighs everything
– Key stop (drop stop) occurs without
receiving clerk present
Product Inspections (cont’d.)
• Inspecting the quality
– Chef must train the receiving clerk
– Factors: freshness, color, size,
consistency, and taste
• Inspecting the quantity
– Products must be counted or weighed
– Weight tags used to record weight of large
cuts of fish or meat
Product Discrepancies
• Mistakes can occur in the quality,
weight, or count of delivered items
– Chefs and clerks have right to reject
inferior product
• Most vendors have credit agreement in place
• Credit memo should be issued
• Make sure bookkeeper knows credit is
expected for that invoice
Maintaining Statement Files
• Receiving clerk should file a copy of
vendor’s signed delivery statement
– Attach original order form, if required
– Send original to bookkeeper for payment
• Keep a separate file for each vendor
• Validate monthly invoice totals against
delivery statements for accuracy
The Storing Process
• Delivered products must be stored
immediately
• Money can be lost in storing process
– Carrying excessive inventory
– Improper handling of perishables
– Product deterioration or inaccurate
bookkeeping
Inventory Management
• Process of controlling inventory volume
until it is to be issued
• Consider shelf life
– Good food is a financial loss if left to spoil
• Informal systems of control
– Check sheets used by employee when
items are removed from stockroom
Inventory Management (cont’d.)
• Formal systems of control
– Consists of a system for tracking issues
– Must have staff to do this
– Employed by larger food service
operations
• A system to determine when and how
much product to order is needed
Inventory Management (cont’d.)
• ABC analysis
– Greatest cost or volume items are given
highest priority
• Par stock method
– Kitchen storeroom containing partial stock
• Mini-max method (safety stock)
– Establish min and max inventory levels
Inventory Management (cont’d.)
• The Levinson approach
– Buyer must closely approximate product to
be used between deliveries
– Then calculate the amount to order
• Economic order quantity
– Costs associated with receiving, stocking,
and inventory control reduced with
infrequent ordering
Conducting Inventories
• Physical inventories are done in the
storeroom or cooler
– Requires complete accounting of all items
• Perpetual (virtual) inventory
– Count of stock that is supposed to be on
the shelves in the storeroom
• Allows physical inventory to be taken less
frequently
Inventory Record Systems
• Storeroom inventory database should
contain:
– Stock item number
– Storage location code
– Product description and specifications
– Approved brand names and suppliers
– Inventory information, and more
Valuing Inventory
• Business must determine a method for
valuing their inventory
– Inventory valuation systems include FIFO
(first in, first out), LIFO (last in, first out),
weighted average, actual cost, and latest
purchase price
• Valuation method should be used
consistently
Fixed Asset Inventory
• Some companies create methods for
tracking their fixed assets
– Fixed assets include computers, office
equipment, vehicles, and furniture
– Bar codes may be used
• Or determination made by weight or storage
area that holds a predefined number of items
The Issuing Process
• Food assets must be issued into
production in order to earn a profit for
the business
• One of two methods is used
– Informal issuing
– Formal issuing
Informal Issuing
• Storeroom is open to the kitchen staff
– Free to enter when supplies are needed
– Room is subject to theft if not properly
controlled
• No ability to separate costs
– If multiple retail outlets use same
storeroom
Formal Issuing
• Buyer purchases goods on behalf of all
outlets and issues them at cost to each
individual outlet
– Process of releasing items controlled by
requisition
– Immediate information on daily food cost
by revenue center is available
Direct Issues
• Products issued immediately into
production from the receiving dock
– Should be recorded in storeroom’s
inventory for recordkeeping purposes
– Expenditure must be charged to the cost
center to which it is issued
• Product requisitions are forms used to
identify foods needed by the chef
Direct Issues (cont’d.)
• Purchase requisitions are internal
documents used:
– In businesses that have formal storeroom
operations
– For special equipment that is needed
Summary
• At the receiving dock, product is
inspected for quality, quantity and
whether it meets the order specification
• There are a variety of inventory
management systems to choose from
• There are formal and informal ways of
managing storeroom inventory