CHAPTER 5

CHAPTER 5: PURCHASING AND RECEIVING CONTROL

PURCHASING OBJECTIVES AND PROCEDURES

      -          PURCHASING: It is the process of getting the right product into a facility of the right time and in a form that meets pre-established standards for quality, quantity and price.

PURCHASE SPECIFICATIONS

      

       -          A food service specification generally consist of:

1.      Product name/specification number (bacon,sliced)

2.      Pricing unit (kg,ml)

3.      Standard/grade (moderately thick slice)

4.      Weight range/size (14-16 slices per gram)

5.      Processing/packaging (2/10kg. Cryovac packed)

6.      Container size (<20kg)

7.      Intended use (bacon, lettuce & tomato slices)

8.      Product yield (60% yield)

MAXIMUM AND MINIMUM INVENTORY SYSTEM

        -          INVENTORY: A detailed & complete list of goods in stock

        -          The amount is depends on the usage & time required for ordering & delivery.

ECONOMIC ORDER QUANTITY  (EOQ)

        -          Minimizes the total holding costs & ordering costs.

          FORMULA:      EOQ = √2C_OD ÷ C_H

          C_O =  Ordering cost per unit

          D  =  Demand

          C_H = Holding Cost

·         Reorder when inventory reaches minimum stock level.

TERMINOLOGY:

     ·         Minimum stock – Amount of stock required to support testing operations until additional supplies are received.

     ·         Lead time – Time between placing an order and receiving it.

     ·         Maximum usage – Number of test devices used in a given time period

DETERMINE HOW MUCH TO RE-ORDER

       -          Never order more than your storage space can hold.

       -          Never order more supplies than you can use before they are expired.

       -          Consider shipping costs when placing orders.

Reorder level = Maximum usage x Maximum lead time

CALCULATING MINIMUM STOCK LEVEL

Minimum stock level = Reorder level – (Average usage x Average lead time)

PURCHASE ORDER / PURCHASE RECORD

      

-          PURCHASE ORDER: A detailed written sales contract between buyer and seller.