Purchasing

Section Objectives

Upon completing this section, you should be able to:• Explain the process of purchasing

Purchasing

One can prepare a poor meal with good ingredients, but it is impossible to prepare a good meal with poor ingredients

Definition: Purchasing is the careful process of selecting from many choices, making sound decisions, and developing solid relationships with vendors

Importance of Purchasing

• Food items are perishable• Profitability depends on purchasing• Guest satisfaction is related to purchasing• Money can be tied up with improper purchasing• Purchasing is an important component of

management• Purchasing starts the entire process of operations

Purchasing Goals

• Purchase the right product at the right time and at the right price

• Purchase only products needed and in the quantities required

• Insist on quality at optimum price• Develop and use proper specifications• Deal with reputable purveyors• Be ethical in all dealings

Purchasing Decisions

• Inventory on hand• Storage capacity• Seasonal fluctuations• Type of market• Proximity of market• Delivery method

Points to Consider

• Take advantage of seasonal/price fluctuations• Consider available sources• Compare and select the best price, considering

all aspects• Consider hidden costs, such as handling • Consider available storage space

Points to Consider—continued

• Waste and spoilage• Duration of storage• Processing required• Theft and pilferage• Discounts• Minimum order• Transportation and delivery• Quality assurance

Purchasing Specs

Specifications, or “specs,” are a description of a particular commodity in terms of its size, quality, and/or condition.

Components of Specifications

• Meat grades• IMPS #• Description• Species• Size and thickness• Style • Conditions upon

delivery

• Grade• Quality• Variety• Size • Packaging• Density• Score

Purchasing Categories

• AP = as purchased• EP = edible portion

Yield Percentage

Percentage of yield = × 100Weight after cooking

Weight before cooking

Yield Percentage—continued

Percentage

of yield × 100 = 70%

Weight after cooking (70 lb)

Weight before cooking (100 lb)=

EP Cost

EP cost AP cost

Yield percentage=

EP Cost—continued

• Yield percentage = .75

• AP cost = $.65

• EP cost = $.65

.75

EP cost = $.87

Tracking Inventory Periodic Inventory Method

• Entire stock is physically reviewed on a regular basis

• From this review, the manager determines reorder point for each inventory item

Tracking Inventory–continuedPerpetual Inventory Method

• Uses inventory cards to keep track of what food items are in storage

Items are:• Checked in on inventory cards when delivered to

the restaurant• Checked off as they are issued for use in the

kitchen area

Maintaining InventoryPar Stock

• Par stock is the ideal amount of an inventory item that should be on hand

at all times

• It reflects a quantity that neither runs out nor spoils on the shelf

Maintaining InventoryReorder Point (ROP)

• The point or quantity limit at which stock is reordered is the reorder point

• For example, if the reorder point for 50-pound sacks of flour is two and there are only two sacks left in the storeroom, then the buyer knows to order more flour

Steps in Purchasing

• Request bids and/or quotations

• Select vendor

• Send purchase order via electronic

or other means

• Collect invoices

• Produce receiving reports

• Maintain inventory records

• Maintain requisition records