Achieving high standards of food quality begins with the selection of ingredients. The purpose of this chapter is to review the basics of the entire purchasing function. The chapter begins with a thorough discussion of the market and its regulations. Buyer characteristics are reviewed and suggestions for vendor selection are offered. The chapter continues with an in-depth review of purchasing methods and procedures.
Chapter Outline
INTRODUCTION
KEY CONCEPTS
WHAT IS PURCHASING?
THE MARKET
Market Distribution
Understanding the Market
Market Regulation: U.S. Food and Inspection Programs
THE BUYER
The Art of Negotiation
Ethics in Purchasing
Structure of Purchasing
VENDORS AND FOOD DISTRIBUTORS
METHODS OF PURCHASING
Informal or Open-Market Buying
Formal Competitive Bid Buying
Variations on Methods of Purchasing
PRODUCT SELECTION
Market Forms of Foods
Food Quality
PURCHASING PROCEDURES
Identifying Needs
Specifications
Issuing Bid Requests
Developing Purchase Orders
Tabulating and Evaluating Bids
Awarding Contracts
Legal and Regulatory Aspects of Purchasing
Part 3: The Operational Functions—Chapter 6: Purchasing
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SUMMARY
APPLICATION OF CHAPTER CONCEPTS
CRITICAL-THINKING QUESTIONS
REVIEW QUESTIONS
SELECTED WEB SITES
Learning Objectives
Following completion of this unit the student will be able to:
•
understand the market and market regulations.
•
diagram the basic flow of purchasing activities.
•
define the intermediaries who are involved in the distribution system.
•
discuss the concepts of market channels and transfer of ownership.
•
identify the knowledge requirements and desired professional characteristics of the food buyer.
•
recognize important factors to consider when selecting vendors.
•
describe the major purchasing methods used by foodservice operations.
•
establish quality standards for product selection.
•
cite a step-by-step purchasing procedure.
•
write a basic specification.
Learning Enhancement Activities
1. Schedule a tour at a local market or wholesale distribution center.
2. Have students write basic specifications for various food items:
a. fresh, frozen and canned produce
b. fresh and frozen ground beef
c. various dairy products
d. bread and bakery products
e. fresh fish
3. Encourage students to read national and local newspapers, trade journals and market newsletters. Have them identify economic, political, technological issues that can influence the purchasing function.
4. Provide case studies on Ethics and Purchasing. Discuss.
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Test Questions
Multiple Choice
1. For purchasing purposes food quality is defined and assured through:
A.
federal inspections
B.
HACCP
C.
standards of identity
D.
grading services
Ans: D Page 161
2. Composition of individual food products is defined through federal:
A.
Standards of identity
B.
Nutrition education and labeling
C.
Grading
D.
Inspections
Ans: A Page 162
3. The art of negotiation in the purchasing function is a communication skill that
A. requires an innate ability
B. is not necessary given the formal nature of purchasing
C. is used by those only in small foodservice operations
D. can be learned and acquired over time
Ans: D Page 164
4. Requesting weekly quotations from three produce vendors is typical of which type of purchasing method?
A.
formal
B.
informal
C.
cooperative
D.
primary
Ans: B Page 168
5. A long term care facility purchases at least 85% of its food and supplies from one distributor. This is an example of which type of purchasing?
A.
Centralized
B.
Prime vending
C.
Blanket order agreement
D.
Cooperative
Ans: B Page 171
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6. A foodservice uses the Mini-Max system to determine amount to order. Canned peaches have a maximum inventory level of 10 cases and a safety stock factor of 2 cases. The foodservice currently has 6 cases of hand. How many cases should be ordered?
A. 0
B. 2
C.
4
D.
6
Ans: A Page 178
7. If this same foodservice used the par stock system and the par stock level is 10 cases, how many cases should be ordered?
A. 0
B. 2
C. 4
D. 6
Ans: C Page 178
8. A buyer is writing specifications for meat products. Which of the following would be most useful in simplifying this task?
A.
IMPS
B.
Green sheets
C.
Yellow sheets
D.
The Food Code
Ans: A Page 180
9. A broad-line food distributor markets its own brand of canned fruits and vegetables. What action can a buyer take during a bid process to ensure that these products meet quality standards as outlined in the bid specification?
A. conduct a can cutting
B. request a grade certification
C. check for federal inspection stamps on the label
D. talk to other buyers that contract with this vendor
Ans: A Page 183
10. Under competitive bid purchasing, a buyer can award a contract to a vendor other than the low bidder if the low bidder:
A.
Offers to take the buyer out to lunch
B.
Is on failure-to-perform probation at a neighboring facility
C.
Can provide only national brands
D.
Does not meet the bid specifications
Ans: D Page 183
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True I False (Circle the appropriate response.)
1. T F A food is deemed misbranded if it contains substances that are injurious to health.
Ans: F Page 162
2. T F Collusion refers to a secret arrangement or understanding between buyer and seller for fraudulent purposes.
Ans: T Page 164
3. T F Vendors are not allowed to offer gifts to buyers that are employed by government funded foodservices
Ans: F Page 164
4. T F One advantage of Just-in-Time purchases is that it minimizes the amount of time that food is held in inventory.
Ans: T Page 172
5. T F Federal grades are mandated for all commodities that enter interstate commerce.
Ans: F Page 180
Matching (Match the letter of the agency with its responsibility)
1. Mandatory inspection of A. BATF
wholesomeness for meats, poultry,
and other processed foods.
2. Enforces the Federal Food, Drug, B. EPA
and Cosmetic Act; Fair Packing and
Labeling Act; and Nutritional Labeling
and Education Act.
3. Advises state and local governments C. FDA
on sanitation standards for production,
processing, and distribution of milk.
4. Sets tolerance levels for pesticide D. USDA
residuals in foods.
5. Monitors the production, distribution, E. USPHS
and labeling of alcoholic beverages.
Answers: 1-D Pages: 161
2-C 161-162
3-E 162
4-B 163
5-A 163
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Short Answer I Essay (Answer the question completely and concisely in the space provided.)
1. Write a standard specification for fresh apples.
Key Points
•
name of product: apples
•
federal grade and brand: A
•
unit on which price is quoted: case
•
count: 144
List at least two additional details that you could add to get a product that will be made available as fresh fruit in a cafeteria.
Key Points
•
degree of maturity: fully ripe
•
specific variety: Granny Smith, Red Delicious, etc.
•
geographic location: Wisconsin, Michigan, Washington
Page 180
2. Last spring devastating floods struck Southern California. Many produce fields were destroyed. Avocado, lettuce, and strawberry crops were particularly hard hit. Describe short and long term impact of this natural disaster on the functions, (functional subsystems), of a foodservice operation in the Midwest.
Key Points
•
price increases
•
product shortages
•
low quality
Page 161
3. Whole parsley – buttered potatoes have been suggested as a menu item. The following products are available.
Calculate the cost of 1 pound edible product for each item.
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•
6 x 5 = 30# $29.98 ÷ 30 = $0.99
•
50# x .81 = 40.5# E.P. $11.60 ÷ 40.5 = $0.2864
•
74 x 6 = 444 oz ÷ 16 = 27.75# $16.15 ÷ 27.75 = $0.5819
In addition to cost, what factors would you consider in selecting a potato product for this menu item?
•
labor
•
quality
Pages 172-173
Part 3: The Operational Functions—Chapter 7: Receiving, Storage, and Inventory
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CHAPTER 7
Receiving, Storage, and Inventory
Chapter Overview
Well designed policies on receiving are critical in a foodservice operation to ensure that food and supplies are handled properly from the minute they arrive on the dock to the time they are served or used. Proper receiving concludes with the prompt transfer of goods to appropriate storage. A program of inventory then ensures that proper accounting of stock levels is maintained. This chapter provides the guidelines needed to design, implement and maintain a program for receiving, storage and inventory in a foodservice operation.
Chapter Outline
INTRODUCTION
KEY CONCEPTS
RECEIVING
Coordination with Other Departments
Personnel
Facilities, Equipment, and Sanitation
Scheduled Hours for Receiving
Security
The Receiving Process
STORAGE
Dry Storage
Refrigerated and Freezer Storage
INVENTORY RECORDS AND CONTROL
Receiving
Storeroom Issues
Perpetual Inventory
Physical Inventory
SUMMARY
APPLICATION OF CHAPTER CONCEPTS
CRITICAL-THINKING QUESTIONS
REVIEW QUESTIONS
SELECTED WEB SITES
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Learning Objectives
Following completion of this unit the student will be able to:
•
Describe the importance of proper receiving, storage, and inventory procedures relative to quality and cost control.
•
Identify and describe the purpose of receiving storage and inventory documents.
•
Describe the physical arrangement, equipment, and supplies needed in the receiving area.
•
Identify security measures that are needed to prevent theft or deliberate contamination of food and supplies.
•
List the consecutive steps in proper the receiving process from receipt to storage.
•
Identify the three types of storage and describe proper conditions in each.
•
Implement and monitor proper atmospheric conditions (temperature, humidity, etc), in the three types of storage.
•
Compare and contrast the value of FIFO verses LIFO methods of storage.
•
Compare and contrast the advantages and disadvantages of physical and perpetual inventories.
•
Conduct physical and perpetual inventories as appropriate.
Learning Enhancement Activities
1. Provide students with sample purchase orders and corresponding invoices. Note discrepancies. Discuss corrective action.
2. Provide students with an inventory of food items. Have them calculate the cost of the inventory.
Part 3: The Operational Functions—Chapter 7: Receiving, Storage, and Inventory
Test Questions
Multiple Choice
1. Potential consequences of a poorly designed receiving program include all of the following except:
A.
short weights
B.
double billing
C.
low risk of pilferage
D.
substandard quality
Ans: C Page 190
2. A foodservice employee is receiving an order of frozen fish. The products are coated with large ice crystals and the box has what appears to be water stains on it. At this point the clerk should:
A.
check the internal temperature of the fish
B.
immediately place the products in the freezer
C.
report the unacceptable product to the vendor
D.
complete a discrepancy report
Ans: C Page 193
3. The “blind receiving” method means that the delivery is
A. made without an invoice
B. received without being checked by the receiving clerk
C. not seen by anyone prior to storage
D. made with an invoice listing the items but no quantities
Ans: D Page 193
4. It is not uncommon for vendors to “mis-pick” an item when filling a food order for a foodservice operation. The best document to use during receiving to catch this type of error is:
A.
Specification
B.
Purchase order
C.
Invoice
D.
Requisition
Ans: C Page 193
5. The recommended ambient temperature range for a dry storage area is:
A.
50 to 70°F
B.
50 to 70°C
C.
60 to 75°F
D.
45 to 65°F
Ans: A Page 197
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6. To insure that the FIFO system is followed, which of the following should be required of food products in dry storage?
A. store new deliveries in back of old
B. store all food items in alphabetical order by type
C. date all canned foods
D. store all food items 6” off the floor
Ans: A Page 198
7. Refrigerated storage should be maintained at
A. 0” F to –10’ F
B. 32’ C to 40’ C
C. 32’ F to 40’ F
D. 40’ F to 45’ F
Ans: C Page 198
8. A congregate meal site for a senior citizen center has only one refrigerator. Which of the following items should be stored on the bottom shelf?
A. gallons of milk in plastic jugs
B. frozen chicken that needs to thaw
C.
RTE (ready-to-eat) cream pies
D.
fresh shell eggs
Ans: A Pages 198-9
9. Which inventory record is best to ensure that appropriate authorization of storeroom issues has been granted?
A. Receiving record
B. Purchase order
C. Invoice
D. Requisition
Ans: D Pages 200-1
10. Inventory records are recommended for all items on hand except
A. china, glassware, and silverware
B. perishables stored in the production area
C. spices and other small containers
D. cleaning and paper supplies
Ans: B Pages 202-3
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True I False (Circle the appropriate response.)
1. T F The invoice is the best document to use to verify that the items delivered are what was ordered.
Ans: F Page 193
2. T F The recommended maximum storage time for canned goods is 12 months.
Ans: T Page 196
3. T F The temperature of the dry storage areas should be maintained between 50 to 70°F.
Ans: T Page 197
4. T F FIFO is an inventory rotation method and stands for First-In, First- Out.
Ans: T Page 198
5. T F A physical inventory is an actual count of items held in storage.
Ans: T Page 202
Matching (Match the letter of the one item that best corresponds to the following statements.)
1. A list of goods shipped or delivered. A. Inventory
2. Written requests to a vendor to sell goods B. Invoice
or services to a facility.
C. Purchase Order
3. A list of desired goods. Generally originates
in a foodservice department and is D. Receiving
submitted to the purchasing department.
E. Requisition
4. The point at which a foodservice takes
legal possession of goods.
5. A detailed and complete list of goods in stock.
Answers: 1-B Pages: 193
2-C 192
3-E 200
4-D 190
5-A 201-2
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Short Answer I Essay (Answer the question completely and concisely in the space provided.)
1. You are hiring a receiving clerk for a foodservice operation, skills would you look for in the applicants?
Key Points
•
honesty and integrity
•
knowledge of food quality and safety standards
Page 191
2. You are asked to write policies and procedures for managing the receiving area. Identify the topic areas that you would include:
Key Points
•
security
•
delivery schedules
•
cleaning and sanitation
Pages 191-2
3. Discuss the reasons that a physical inventory be taken in every foodservice establishment on a periodic basis even if a perpetual inventory is kept. Key Points
•
to calculate food costs
•
to check against perpetual inventory records
•
to determine quantities to keep on hand
•
to spot items that are outdated or not moving
Page 203
