Chapter 4 | Purchasing and Receiving

Question 1

What is the product cycle?

Answer 1

1. Purchasing
2. Receiving
3. Storing
4. Issuing
5. Producing
6. Selling and serving

Question 2

What are the three purposes of purchasing control?

Answer 2

1. Maintain appropriate supplies - Quantity
2. Ensure intended quality
3. Obtain favorable prices

Question 3

Benefits of standard purchase specifications

Answer 3

1. Force owners to determine exact requirements in advance
2. Useful in menu prep
3. Facilitate checking food as it is received
4. Eliminate misunderstandings
5. Allows for true competitive bidding

Question 4

Definition of par stock

Answer 4

The maximum quantity that should be on hand right after the most recent receiving

Question 5

Definition of DEI

Answer 5

The minimum amount to have at the end of the period

Question 6

What factors affect the level of par stock

Answer 6

1. Storage space
2. Limits on the value of inventory
3. Frequency of orders
4. Usage
5. Purveryors’ minimum order requirements

Question 7

What is a standing order?

Answer 7

Arrangement with a supplier to deliver a set quantity of goods each day without being notified

Question 8

What are the functions of the Steward’s Market Quotation List?

Answer 8

1. Taking daily inventory of perishables
2. Determining suitable order quantities
3. Recording market quotations
4. Selecting vendors

Question 9

What is the method of deciding quantity to order for perishables and non-perishables?

Answer 9

Perishables: Steward’s Market Quotation list or Standing Order - Decided by purchase managers
Non-Perishables: Standing Order - Decided by supplier

Question 10

Equation for periodic method

Answer 10

Amount needed - amount on hand + DEI = Amount to order

Question 11

Equation for perpetual method

Answer 11

Par stock - Reorder point + normal usage until delivery = amount to order

Question 12

What is a purchase order used for?

Answer 12

1. Quoted price
2. Quantity ordered
3. Product specification
4. Instructions to the receiving clerk
5. Payment authorization

Question 13

Steps of purchasing food

Answer 13

1. Develop purchase specifications
2. Select suppliers
3. Establish part stock levels
4. Arrange for standing orders
5. Fill out market quotation sheets for competitive bids
6. Fill out/send purchase orders to suppliers

Question 14

What is an invoice

Answer 14

1. Comes with deliveries
2. Stamped and signed to acknowledge quantity, quality, and price
3. Forwarded to the bookkeeper for payment

Question 15

What is the difference between a bin card and a perpetual inventory card

Answer 15

Bin card: periodic method

Perpetual inventory card: perpetual method

Question 16

What are standard procedures for receiving?

Answer 16

1. Verify quantity, quality, and price
2. Move food to appropriate storage
3. Stamp invoice
4. Prepare Receiving Clerk’s Daily report
5. Forward paperwork

Question 17

What are the functions of an invoice stamp?

Answer 17

Verifies the date the food was received.

Signatures by different people vouch for accuracy

Question 18

What is a receiving clerk’s daily report?

Answer 18

A daily summary of invoices for all food received

Question 19

What is included in a Receiving Clerk’s daily report?

Answer 19

Directs - direct to Food Cost
Stores - to inventory
Others - all non food items

Question 20

What are potential problems with receiving?

Answer 20

Weight problems, Quality problems, and Control problems

Question 21

What is the effect on today’s food cost if Directs are miss-classified as stores?

Answer 21

Today’s food cost would be lower than it should be