2. Objectives
1. Describe what is involved in purchasing, receiving, storage, and
inventory control.
2. Understand the different between purchasing and buying
3. State the three areas within which the purchasing agent must
work, as well as their importance and relationship
4. Name two reasons that a purchaser must know how the market
works
5. List two advantages and two disadvantages of purchasing
goods from master and specialty distributors
6. Explain two if the reasons that operations should use purchase
specifications
7. Name three items that should be included in purchase
specifications
FBM-341 Food and Beverage Management 2
3. Outline
1. Introduction to procurement
2. Purchasing
3. Purchasing from the customer s point of view
4. The three area of purchaser familiarity
5. Who does the purchasing?
6. The different between purchasing and buying
7. Method of purchasing
8. The purchase specification: key to effective purchasing
9. Supplier selection
10. Buyer and seller relationships
11.Receiving
12.Storage
13.Inventory
FBM-341 Food and Beverage Management 3
4. Procurement
Four steps in Procurement
Purchasing
Receiving
Storage
Inventory Control
FBM-341 Food and Beverage Management 4
6. Purchasing
Purchasing is an essential
function for any foodservice
operation.
The nature of the foodservice
biz, with its unpredictable flow,
makes purchasing a difficult task.
Operators have to be careful not
to order to much it will spoil and
become unusable, and , at the
same time, they must be careful
not to order so little
FBM-341 Food and Beverage Management 6
7. Purchasing
Purchasers do not buy only
items for the kitchen, they also
buy items for the various other
departments of the operation.
Therefore, they must be in
close communication to ensure
that they buy exactly what is
needed.
FBM-341 Food and Beverage Management 7
8. Purchasing
Specifications, or the specific
characteristics of the goods needed,
must be developed so that both the
buyer and the seller understand exactly
what is needed.
A large portion of goods purchased,
such as fresh produce and meat items,
are subject to the variations found in
nature items
FBM-341 Food and Beverage Management 8
9. Role of Purchasing Department
Purchasing is profit center
Better purchasing saves dollars for products, supplies, &
services
Savings go directly to bottom line
Profit center department generates revenues greater
than expenses
Cost center does not generate profits to cover
expenses
FBM-341 Food and Beverage Management 9
10. Purchasing Cycle
1. Issuing
Department completes an issue requisition to storeroom.
Storeroom issues requested products.
2. Purchasing
Storeroom sends purchase requisition to purchasing
department.
Purchasing department completes purchase order and sends
to:
Receiving Accounting Supplier
FBM-341 Food and Beverage Management 10
11. Purchasing Cycle
(continued)
3. Supplier
Provides products and invoice to receiving department.
4. Receiving
Checks products against delivery invoice and purchase order.
Sends delivery invoice to accounting.
5. Accounting
Pays supplier according to delivery invoice and purchase
order.
FBM-341 Food and Beverage Management 11
13. Purchasing from Customer’s Point of View
Purchasing is a functions that occurs behind
the scenes of a foodservice operation and out
of view of the customers
The result of the purchasing function are
visible and important to the guests
The quality of the product effect on their
perceptions of management s commitment to
quality
An operator that uses the least expensive
goods available will be seen as a cost cutter
and will, accordingly, have problems in
charging top dollar for its goods and services.
FBM-341 Food and Beverage Management 13
14. Purchasing from Customer’s Point of View
Customers expect a brand such as Coca-
Cola or Pepsi-Brand which they are familiar-
when they request a Cola Drink
The substitution of an off-brand will most
likely cause problems in the long run.
FBM-341 Food and Beverage Management 14
15. Purchasing from Customer’s Point of View
There is generally a direct relationship between price and
quality of goods purchased.
Goods at a bottom of the price range are generally inferior
to their more expensive counterparts and may eventually
cost more for the operation
Operators who look for the cheapest item may be losing
money in two ways:
1. Customer goodwill (reputation) and business
2. Increased costs resulting from reduced product quality
FBM-341 Food and Beverage Management 15
17. The Three Area Of Purchaser Familiarity
The role of the purchaser is to find
the best-quality product at the best
price and to ensure that it arrives at
the proper time.
1. Market purchase the goods
and services for the operations
2. Operation the
establishment for which the
purchaser works
3. Customer whose need
expectations must be met
FBM-341 Food and Beverage Management 17
18. Three Areas With Which Purchaser Must be Familiar
FBM-341 Food and Beverage Management 18
19. 1. THE MARKET
Market medium through which change in ownership moves commodities
from producer to consumer
Most goods that are purchased go through a chain of distribution from the
producer (farmer) to the Processor (or a number of processors) to distributors
FBM-341 Food and Beverage Management 19
20. THE MARKET
Farmer or Producer
Processor Processor Processor
Broker
Distributor
Foodservice Retail Grocery
operation Store
Customer
FBM-341 Food and Beverage Management 20
21. Purchasing & the Market
Purchasing acquisition of products
Right product, in right amount of time, at the right
price
Knowledge of market involves finding sources of supply
& determining which food can be obtained from which
supplier
Buyers must know market and products, and have
general business acumen
Rely on sales representatives for advice on
purchasing decisions & information on available food
items & new products
FBM-341 Food and Beverage Management 21
22. Marketing Channel
Buyer has powerful influence on food distribution
system
Listens to desires of customers
Determines what is grown & packaged
Understands how items are processed or manufactured,
shipped, sold , & consumed
Marketing channel indicates exchange of ownership
from producer through processor or manufacturer &
distributor to the customer
FBM-341 Food and Beverage Management 22
24. Marketing Channel
Five major components:
1. Producers
2. Processors or
manufacturers
3. Distributors
4. Suppliers
5. Customers
Value & cost added in each component & are
reflected in final price
FBM-341 Food and Beverage Management 24
25. 1. Producers
Someone who produces raw food to sell
Usually farmers or ranchers
Sell to distributors or directly to foodservice operation;
product then sold to customers
Abundance in food result of applications of advances
in science & technology
Food produced per acre increased
Improvements in production methods, animal/plant
genetics, & farm mechanization
FBM-341 Food and Beverage Management 25
26. 2. Processors or Manufacturers
Transforms raw food items into packaged products for
sale to consumers or foodservice operations
Responsible for many forms of food available to
customer
FBM-341 Food and Beverage Management 26
27. 3. Distributor
Transfer products from processor or manufacturer to
supplier
Classified as
Wholesalers (included super distributors)
Brokers
Manufacturers representatives
FBM-341 Food and Beverage Management 27
28. 3.1 Wholesalers
Purchase from various manufacturers or processors,
provide storage, sell, & deliver products to suppliers
Full or broadline carry large stock
Specialty particular product category
Special breed distributors purchasing & product
movement specialists
FBM-341 Food and Beverage Management 28
29. 3.2 Brokers
Sales & marketing representative who
contracts with manufacturers, processors, or prime
source producers
sells & conducts local marketing programs with
wholesalers, suppliers, or foodservice operations
FBM-341 Food and Beverage Management 29
30. 3.3 Manufacturers’ Representatives
Represents a manufacturing company & informs suppliers of
products by manufacturer
Companies pay flat commission on sales volume
Economical because companies do not have sales officials
in every area of customers
Have greater product expertise than brokers
FBM-341 Food and Beverage Management 30
31. 4. Suppliers
Offers products for sale
Foodservice manager buys from supplier more often
than from wholesaler, broker, or manufactures
representative
One-stop shopping by dealing with prime supplier (single
source supplier)
Many prefer to bid out individual line items to receive
competitive prices
FBM-341 Food and Beverage Management 31
32. 5. Customers
Anyone affected by a product or service
Typical person consumes average of 4.2 meals
prepared away from home per week
Customer satisfaction goal of foodservice industry
Purchasing quality food & related products should be
first objective
FBM-341 Food and Beverage Management 32
33. THE MARKET
The purchaser must be aware of the advantages and
disadvantages of the various links in order to know which
can best be bypassed.
When some items were available only at certain times of the
year and foodservice operations had to develop different
menus for the various growing seasons
In order to provides the best quality at the best price, THE
PURCHASER MUST KNOW THE BEST TIME TO
PURCHASE THE FRESH PRODUCE NEEDED.
FBM-341 Food and Beverage Management 33
34. 2. THE OPERATION
The role of the purchaser is
to buy the food and supplies
for the various areas of the
operation
An operation s goal may be
to get the best value for the
dollar, with quality
secondary, or to provide
guests with the best that
money can buy
FBM-341 Food and Beverage Management 34
35. THE OPERATION
A purchaser must avoid judging between two items
solely on the basis of price without considering the
intended use
When given a choice of product, some purchasers
may tend to choose the least expensive
“ YOU GET WHAT YOU PAY FOR”
An item maybe cheaper, but if it is not useable, it
represents a total waste of money
FBM-341 Food and Beverage Management 35
36. 3. THE CUSTOMER
The key to the success of any operation is to MEET
or EXCEED the needs and desires of its customers
Customer expect a certain level of quality, which
depends on the menu prices and the perceived value
of the operation s offerings
REMEMBER!!! Customers are aware of the quality
brands and expect to see some of them when they
dine out
FBM-341 Food and Beverage Management 36
37. THE CUSTOMER
Example
if an operation serves ketchup on the table as
a condiment, it will most likely be Heinz
ketchup rather than any of the numerous other
brands that are available from grocery stores.
Note:
Pepsi, Coca-Cola, Heinz are not the cheapest
brands, but they are the brands used visibly in
most operations because customers equate
them with quality and have come to expect
them
FBM-341 Food and Beverage Management 37
39. WHO DOES THE PURCHASING?
The size of the operation, as well
as whether it is an independent
operation or part of chain, can
have a dramatic effect on the
role and function of the
purchaser
FBM-341 Food and Beverage Management 39
40. SMALLER OPERATIONS
A possible advantage is that the
person who places the order is
also the one to receive it, a control
problem may arise
An unscrupulous person could
steal some goods with a driver to
defraud the foodservice op.
Whenever possible, the person
who places an order should not be
the person who will receive the
goods.
FBM-341 Food and Beverage Management 40
41. SMALLER OPERATIONS
Smaller ops cannot justify or afford having a person
whose sole responsibility
The task of purchasing is usually delegated to the
chef to be performed along with his or her other
duties
An advantage because the user of the goods is the
person doing the buying, there is no chance for
miscommunication
FBM-341 Food and Beverage Management 41
42. LARGER OPERATION
Usually with in Hotel, hospital and
resort, have full time purchasing
agent and staff.
The role of the purchasing agent is to
deal with suppliers, supervise
receiving clerk, and manage the
storeroom
By managing the storeroom area they
can monitor the goods and notify the
kitchen staff of any slow moving
foods that must be used before they
FBM-341 Food and Beverage Management
spoil 42
43. CHAIN OPERATIONS
The purchasing function done by the
corporate or regional office of the
company
Most chain restaurants serve generally the
same menu at all of their locations
Because consistency is so important to
chains, they usually write up specification
for food items and distribute them to their
operations
Companies have also found that they can
generally obtain better prices and services
if they negotiate on a regional or national
basis, rather than having each property
negotiate on its own for the items needs.
FBM-341 Food and Beverage Management 43
45. THE DIFFERENT BETWEEN PURCHASING AND BUYING
Formal Process, called PURCHASING
Informal, considered BUYING
Must be aware of this distinction and of the respective
Advantages and Disadvantages
Although the net effect for the operation is basically the
same it receives the good and service it needs-the
process of receiving the good (and most likely the price) can
differ
FBM-341 Food and Beverage Management 45
46. FORMAL PURCHASING
Is the systematic and Written Specifications
planned process of
Check Prices
determining what is
needed, checking prices, Negotiate with Suppliers
negotiating with suppliers,
Price
and obtaining the need
Delivery Schedules
goods Credit Terms
Receive Goods
FBM-341 Food and Beverage Management 46
47. INFORMAL BUYING
Less complex then formal
Call Supplier
purchasing.
The op, call one suppliers
Place Order and orders what the rest
needs.
Specification not used,
Receive Goods Price are not checked with
a number of supplier
FBM-341 Food and Beverage Management 47
48. PURCHASING AND BUYING
Formal purchasing is generally used in larger
operations that can afford a specialized staff with time
to devote to the more complex formal method
Smaller operations generally use the informal system;
however, combining the purchasing responsibility with
a person s other duties may make it difficult to
perform both functions well
FBM-341 Food and Beverage Management 48
50. Methods of Purchasing
Informal
price quotes by telephone or personally with salesperson
Amount of purchase is small no time for formal purchasing
practices
Item can be obtained only from 1 or 2 sources
Need is urgent & immediate delivery required
Stability of market (& prices) is uncertain
Size of operation too small for formal purchasing
FBM-341 Food and Beverage Management 50
51. Methods of Purchasing
Formal
tax supported institutions usually required to use
competitive bidding
Culminates in formal contract between buyer & supplier
Understanding legal implications of contract buying is
important for both parties
FBM-341 Food and Beverage Management 51
52. Independent & Centralized Purchasing
1. Independent purchasing done by
unit or department that has been
authorized to purchase
2. Centralized purchasing purchasing
activity is done by one person or
department
FBM-341 Food and Beverage Management 52
53. Centralized Purchasing
Advantages
Better control & one complete set of records
Development of personnel with specialized knowledge,
skills, & procedures
Better performance in other departments
Economic & profit potentials of purchasing, making it a
profit rather than a cost center
FBM-341 Food and Beverage Management 53
54. 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
FBM-341 Food and Beverage Management 54
55. Group Purchasing
Bringing together foodservice managers from different
operations for joint purchasing
Advantage - volume of purchases is large enough for
volume discounts
Site is selected, purchasing personnel hired, &
managers serve as advisory committee
FBM-341 Food and Beverage Management 55
57. THE PURCHASE
SPECIFICATION
A Purchaser cannot call the
produce supplier and order a
case of LETTUCE
The supplier needs more
information-the type of lettuce,
size of the case, pack of the
case (number of heads), the
amount of processing
A purchase specification would include all this
information and would make the jobs much easier
and more efficient.
FBM-341 Food and Beverage Management 57
58. THE PURCHASE SPECIFICATION
Purchase specification is a precise written statement
of the product s characteristics required by a user
List of detailed characteristics desired in a product for
a specific use
Primary safeguard of foodservice quality is adherence to
specification
FBM-341 Food and Beverage Management 58
59. THE PURCHASE SPECIFICATION
To write the specification will
help the control the fluctuation of
nature, freshly grown produce
and the difference in size and
quality of animals
The lack of brand names for a
majority of foodservice products
also makes the written
specification desirable.
FBM-341 Food and Beverage Management 59
60. DEVELOPING AND USING SPECIFICATIONS
Written specifications accomplish the following objectives:
1. Communicate the characteristics of products and services
needed for the operation, and help eliminate misunderstanding
between the buyer and seller
2. Provide the receiver with the product characteristics he or she
needs to see before accepting goods delivered to the operation
3. Help to ensure consistency in the items served by the
operation by providing consistent product
4. Allow the operation to solicit bids from more than one supplier
5. Facilitate the training of purchasers, and allow other people to
step in for the purchaser if the need arises
FBM-341 Food and Beverage Management 60
61. THE CONTENTS OF A SPECIFICATION
Specs can vary greatly in length. Items
with a recognizes brand name, such as
cans of Pepsi-Cola, can have a
specification as simple a s the name,
size of can, and number of can in a
case
Specifications for items that do not
have brand names, such as apples,
require much more detail in order to be
effective
FBM-341 Food and Beverage Management 61
62. THE CONTENTS OF A SPECIFICATION
1. The intended use of the product or
service
2. The specific, definitive name of the
product
3. Packer's or producer s brand name
4. U.S quality grades
5. Size or Size range of the items
needed
6. Package size
7. Preservation and/or processing
method
8. Point of origin
9. Method of packing
FBM-341 Food and Beverage Management 62
63. Example
Item: Prime Rib, Bone in, Oven Ready
Grade: USDA choice, Upper Half
Weight range: 18lb min 22lb Max
average 20ib (9Kg)
State of Refrigeration: Chilled when delivered
Fat Limitation: 0.25-0.75 inch (average 0.5) on
outside moderate marbling
Color: Light red to lightly dark
Quantity requirement: approximately 300 lb per
week
FBM-341 Food and Beverage Management 63
65. SUPPLIER SELECTION
Purchaser have several options when choosing the type of
supplier(s) with which whey will deal
Supplier can either limit themselves to a few types of goods
or they can be master distributors
A number of factors must be considered in making selection
Within most geographical areas, purchasers have the choice
of a number of different distributors in each of the categories
of the items they need
Purchaser must be sure to choose the supplier that best
suits the operation s needs
FBM-341 Food and Beverage Management 65
66. CHOICE OF SUPPLIERS
Traditionally, suppliers generally specialized in only
one type, such as produce, such as produce, dairy, or
seafood, rather than a wide range of goods.
Nowadays, the trend in the industry is toward
distributions handle a wide range of both food and
nonfood items.
Foodservice operators should be aware of the
advantage and disadvantages with various types of
supplier.
FBM-341 Food and Beverage Management 66
67. 1. SPECIALTY DISTRIBUTORS
This is similar to the ADVANTAGE (+)
original types of retail a limited type of goods, it
stores where customers would gain expertise with
brought their food those goods
Specialty Distributors, who DISADVANTAGE (-)
offered only a single type purchaser has to contact a
or carried only a limited number of supplier to
range of goods suppliers to place an order
FBM-341 Food and Beverage Management 67
68. 2. WAREHOUSE CLUBS
Warehouse club allow operators to buy items in LARGER
PACKAGES than those available in retail grocery store but
Smaller than packages available from the wholesale
distributors
FBM-341 Food and Beverage Management 68
69. 3. MASTER
DISTRIBUTOR
Large distributors can offer a
wide range of both food and
nonfood items.
They carry fresh, frozen, and
canned produce. A large-scale
distributor may carry as many
as 10,000 items in inventory,
providing the operator with
one-stop shopping service
FBM-341 Food and Beverage Management 69
70. SPECIALTY VS MASTER DISTRIBUTORS
Type of Supplier Advantage (+) Disadvantage (-)
Master Distributors Increase product offerings Lack of expertise regarding all
of the product sold
Increase convenience; one Lack of competition
phone call, one delivery
Specialty Distributor Generally more personal Limited product offering
service
Increase competitions; can Possibility of higher prices
promote better prices and because of increased costs
service and reduction of volume
Increase product expertise More time spent ordering;
receiving, and doing
paperwork
FBM-341 Food and Beverage Management 70
71. CONSIDERATION IN SELECTING SUPPLIERS
Operators must realize that, for the most part, all
suppliers pay much the same prices to obtain the
goods they sell; the prices at which they sell the items
are fairly comparable.
A significant lower price on an item quoted from one
supplier may mean that the supplier will have to raise
prices on other items to make up for it, or that
possibly the product is inferior in some way.
FBM-341 Food and Beverage Management 71
72. CONSIDERATION IN SELECTING SUPPLIERS
The following are factors that purchasers should consider
when selecting suppliers
1. Credit terms offered 6. Delivery schedule
2. Reputation 7. Level of technology
3. Reliability 8. Lead time
4. Substitution Policy 9. Delivery vehicles and
5. Accuracy drivers
10. Willingness to break case
FBM-341 Food and Beverage Management 72
74. BUYER AND SELLER RELATIONSHIPS
There are some aspect in the buyer-seller relationship
of which both parties must be aware entering into a
transaction.
Some of these matters are governed by laws and
regulation, and others are ethical issues.
FBM-341 Food and Beverage Management 74
75. ETHICAL AND PROFESSIONAL STANDARD
Ethics deals with behavior that may not be illegal, but
may still be wrong or improper according to commonly
accepted practices.
All employee who work in a foodservice operation
must be made aware of the ethical and professional
standards of the company and the industry
Purchaser must make sure that their relationship with
suppliers are kept strictly professional-not for the
personal gain of the purchaser.
FBM-341 Food and Beverage Management 75
76. KICKBACK
A kickback is the illegal practice
whereby a supplier or
salesperson pays back money
or goods to a purchaser in
exchange for an order
This practice is illegal because
it gives an unfair advantage to
one supplier over other
FBM-341 Food and Beverage Management 76
77. LOW-BALL PRICING
Suppliers may offer lower prices on a few items in
order to entice the purchaser to buy from them, and
then raise prices on other items
This practice advertise a few items at or below cost
as Loss Leaders to draw customer into a store then
hope to make up the lost money with the rest of the
groceries
Purchaser must be aware to avoid being overcharge
in long run.
FBM-341 Food and Beverage Management 77
78. CONFLICTS OF INTEREST
Buyers must be sure that they do not benefit
personally from their dealing with the operation for
which they work
Purchasers must be careful to avoid the temptation of
accepting loans, gift, items for their personal benefit,
or cash in exchange for either giving a supplier an
advantage over other company
FBM-341 Food and Beverage Management 78
79. EXAMPLE OF ETHICAL POLICY
The following are examples of precepts that should be included in
policy governing the ethical standard of purchasers:
1. To treat all supplier equally, and not be swayed by the offering of gift or
other consideration for personal benefit of the purchaser
2. To keep the best interests of the company in mind when negotiating all
transaction; to conduct all business with others according to company
policies
3. To either limit the value of a gift allowed to the given to a purchaser by
a supplier, or establishment company policy forbidding the acceptance
off all gifts
FBM-341 Food and Beverage Management 79
81. Receiving
Activity for ensuring products delivered by suppliers are
those that were ordered
Verifying quality, size, & quantity meet specifications
Price on invoice agrees with purchase order
Perishable goods are tagged or marked with the date received
Consistent & routine procedures are essential
Adequate controls to preserve quality & prevent loss during
delivery & receipt
FBM-341 Food and Beverage Management 81
82. Elements of Receiving Activity
Competent personnel
Separate duties of purchasing & receiving basic to check-and-
balance system
Well trained employees to perform receiving tasks competently
Facilities & Equipment
Need enough space to permit all incoming products to be
inspected & checked at one time
Equipment scales, unloading platform, table for inspection, &
some tools
FBM-341 Food and Beverage Management 82
83. Elements of Receiving Activity
Specifications
Employee receiving order must know standards the
supplies must meet
Critical controls in receiving
Procedures for inspection & standards for acceptance
necessary to prevent food borne illness
Sanitation
Receiving area designed for easy cleaning
FBM-341 Food and Beverage Management 83
84. Elements of Receiving Activity
Adequate Supervision
Management check security to ensure receiving procedures are
being followed
Scheduled hours
Suppliers should deliver at specified times
Security
Different person responsible for purchasing & receiving
Follow scheduled hours
Move products immediately from receiving to storage
Do not allow delivery personnel in storage area
FBM-341 Food and Beverage Management 84
85. Receiving Process
1. Inspection against purchase order
2. Inspection against the invoice
3. Acceptance or rejection of orders
4. Completion of receiving records
5. Removal to storage
FBM-341 Food and Beverage Management 85
86. Inspection Against Purchase Order
Purchase Order written record of all orders.
Includes:
Brief description of the product
Quantity
Price
Supplier
Ensures:
Products were actually ordered.
Correct quantities have been delivered.
FBM-341 Food and Beverage Management 86
87. Inspection Against the Invoice
Invoice supplier s statement of what is being shipped &
the expected payment.
Receiving Methods:
Invoice checks quantity against purchase order.
Blind records quantity received on invoice or purchase order
with quantity column blanked out.
Electronic Use of tabulator scales, bar coded cartons &
packages, & handheld scanner aid receiving.
FBM-341 Food and Beverage Management 87
88. Acceptance or Rejection of Orders
Delivered products become
the property when the
purchase order,
specifications, & supplier s
invoice are in agreement.
Rejection at time of delivery
is easier than returning
products.
FBM-341 Food and Beverage Management 88
89. Completion of Received Records
Receiving record provides an accurate list of:
All deliveries of food & supplies
Date of delivery
Supplier s name
Quantity
Price data
Provides a checkpoint in control system.
FBM-341 Food and Beverage Management 89
90. Removal to Storage
Products should be transferred
immediately from receiving to the secure
storage area.
Marking information about delivery date
& price directly on the case, can, or
bottle before it is placed into storage.
Tagging information such as date of
receipt, name of supplier, brief
description of product, weight or count
upon receipt, & place of storage are
written on a tag.
FBM-341 Food and Beverage Management 90
91. RECEIVING
KEY POINT IN RECEIVING
You Do Not Get What You Expect,
You Get What You INSPECT
FBM-341 Food and Beverage Management 91
92. IMPORTANCE OF RECEIVING
The Entire Purchasing System can fall apart if a
receiver is not careful to check items properly when
they arrive from the supplier. Receiver must check
three key factors for each items that arrives:
1. Quantity
2. Quality
3. Adherence to company specification
FBM-341 Food and Beverage Management 92
93. IMPORTANCE OF RECEIVING
It is important in the receiving function to ensure that
all that was ordered is received
A distributor charges the foodservice operation for all
items on the invoice
Nonreceipt of an order items or receipt of a quantity
less than that ordered can cause a significant problem
if the discrepancy is not spotted at the time of delivery
so that it can be rectified
FBM-341 Food and Beverage Management 93
94. PROPER TOOLS FOR THE RECEIVER
The person who does the receiving must be supplied
with a number of tools in order to perform the job
properly.
1. The Knowledge necessary
2. Scales
3. An adequate area in which to work
4. Specification Sheets
5. The time
6. A list of what was ordered
FBM-341 Food and Beverage Management 94
96. Storage
Holding of products under proper conditions to ensure
quality until time of use.
Links receiving & production.
Storage employees:
Check in products from the receiving unit
Provide security for products
Establish good material-handling procedures
FBM-341 Food and Beverage Management 96
98. 1. Dry Storage
Provides orderly storage for
foods not requiring refrigeration
or freezing.
Should provide protection of
foods from the elements,
insects, rodents, & theft.
Temperature of 50º F to 70º F.
Relative humidity of 50% to
60%.
FBM-341 Food and Beverage Management 98
99. 2. Low-Temperature Storage
Provides storage for perishable foods
to preserve quality & nutritive value.
Types:
Refrigerators designed to hold the
internal temperature of food products
below 41ºF.
Tempering boxes units for thawing
frozen foods. Steady temperature of
40ºF.
Storage freezers units for frozen foods.
Constant temperature of -10ºF to 0ºF.
FBM-341 Food and Beverage Management 99
100. 2. Low-Temperature Storage
Recommended humidity range of 75% & 95% (85%-
95% for perishable foods).
Low-Temp Thermometers:
Remote reading placed outside unit.
Recording mounted outside the unit.
Refrigerator/Freezer mounted or hung on shelf in the
warmest area inside unit.
Should be checked at least twice a day.
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102. Inventory
Supported by the actual presence of products in the
storage area.
Access to storage areas should be restricted.
Requires maintenance of accurate records.
FBM-341 Food and Beverage Management 102
103. Issuing Products
Issuing process used to
supply food to production
units after it has been
received.
Direct purchases or direct
issues products sent directly
from receiving to production.
Storeroom issues foods that
are received but not used the
day they are purchased.
FBM-341 Food and Beverage Management 103
104. Inventory Records
Objectives:
Provision of accurate information of food & supplies in
stock.
Determination of purchasing needs.
Provision of data for food cost control.
Prevention of theft & pilferage.
FBM-341 Food and Beverage Management 104
105. Physical Inventory
Periodic actual counting & recording of products in
stock in all storage areas.
Involves two people:
1st person counts the products.
2nd person records the data on the physical inventory
form.
One of the people should not be directly involved with
storeroom operations as a control measure.
FBM-341 Food and Beverage Management 105
106. Perpetual Inventory
Purchases & issues continuously are recorded for
each product in storage.
Balance in stock is available at all times.
Generally restricted to products in dry & frozen
storage.
FBM-341 Food and Beverage Management 106
107. Universal Product Code
System of identifying food products
Code
Digit #1 always zero except for meat and produce with
variable weight
Digits 2 - 6 manufacturer s or processor s code
Digits 7-11 product code
Digit 12 check digit
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108. Inventory Control Tools
Major functions of a control
system:
Coordinate activities
Influence decisions & actions
Assure that objectives are met
Decision making
FBM-341 Food and Beverage Management 108
109. Minimum-Maximum Method
Involves establishment of minimum & maximum inventory
levels.
Safety stock a backup supply.
Lead time interval between requisition & receipt of a
product.
Usage rate speed at which a product is used; determined
by experience & forecasts.
Reorder point lowest stock level that safely can be
maintained to avoid a stock-out or emergency purchasing.
FBM-341 Food and Beverage Management 109
110. Ethical Considerations
Ethics principles of conduct governing an individual
or a business.
Personal ethics a person s religion or philosophy of
life derived from definite moral standards.
Business ethics self-generating principles of moral
standards to which a substantial majority of business
executives gives voluntary assent.
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111. Code of Ethics
Set of rules for standards of professional practice or
behavior established by a group.
Influenced by codes of individuals.
Standard the measurement of what is expected to
happen.
FBM-341 Food and Beverage Management 111
112. Ethical Issues
Ethical dilemmas:
Efforts to gain inside information about competitors that
will benefit competition.
Activities that allow buyers to gain personal benefits from
suppliers.
Activities that manipulate suppliers to benefit the
purchasing organization.
FBM-341 Food and Beverage Management 112
113. Ethics Management
By implementing planning, organizing, staffing,
leading, & controlling, management can be sure ethics
are established formally & explicitly into daily
organizational life.
Leadership is the principal mechanism for increasing
ethical performance in business.
FBM-341 Food and Beverage Management 113
114. Materials Management
The unifying force that gives interrelated functional
subsystems a sense of common direction.
Transforms materials that enter the system into an
output that meets standards for quantity & quality.
Organizational concept of centralized responsibility for
those activities involved in moving materials into the
organization.
FBM-341 Food and Beverage Management 114
