Procurement/worksheet #5

Front 1

How does procurement impact the goal od a food service operation?

Back 1

• Procurement is the 1st subsystem in the transformation part of the foodservice system.
• Purchasing provides the right product based on the menu at the time, the right amount that impacts production and the right price that affects the financial accountability.
  

Front 2

What is the difference between profit center vs. cost center?

Back 2

• Profit center: any dept that is assigned the responsibilities of both revenue and expense.
• Cost center: a dept that manages expenses but does not generate a profit for the organization.

Front 3

What is purchasing?

Back 3

The acquisition of products (The right: product, amount, time and price).

Front 4

What is a market?

Back 4

The ways in which commodities move from the producer to the consumer with an exchange of ownership.

Front 5

What is a market channel?

Back 5

Where an exchange of ownership of a product takes place.

Front 6

What are the 5 major components of a market channel?

Back 6

• Producers
• Processors/manufacturers
• Distributors
• Suppliers
• Customers
  

Front 7

What are producers?

Back 7

They produce the raw food sold to processors/manufacturers who sell to the distributors or directly to the food service operation.

Front 8

What are manufacturers?

Back 8

They are responsible for moving the product from the producer (farmer or rancher) to the distributor.

Front 9

What is a distributor?

Back 9

They transfer the products from the processor/ manufacturer to the supplier.

Front 10

What are wholesalers?

Back 10

Distributors who purchase large quantities from various manufacturers/processors and redistribute the food trough marketing channels.

Front 11

What are special breed distributors?

Back 11

• Specialist that move products in very large amounts for resturant chains
• Purchase food directly from processors.
  

Front 12

What is a wholesale club?

Back 12

A glorified supermarket that carries food in both household amounts as well as institutional size.

Front 13

What is a broker?

Back 13

• An independent sales rep. who represents a # of products never taking title to the product they sell.
• Aids in the sales and marketing of a product.
  

Front 14

What are manufacturer's rep.?

Back 14

They represent a small manufacturing companies and do not take title, bill or set prices.

Front 15

What is a costumer?

Back 15

Anyone who is affected by a product or service.

Front 16

What is the difference between a supplier vs. a prime vendor?

Back 16

• A supplier: sells products to the costumer.
• A prime vendor: is a single source supplier used by a foodservice operation to purchase the majority of their purchasing needs.
  

Front 17

Describe the Farm/School Meals initiative?

Back 17

An initiative that began in 1997 to link the local farmer's products w/ the school food program.

Front 18

What is the function of the FDA?

Back 18

• The agency responsible for the Food, Drug and Cosmetic Act. which is responsible for providing consumer protection.
• Is a safeguard against adulteration and misbranding of foods, regulates irradiation, and implemented a policy for genetically engineered foods.

Front 19

What is the Food, Drug and Cosmetic Act?

Back 19

A set of standards for identity, quality and fill.

Front 20

What is the FSIS and it's function?

Back 20

Its is a public health agency in the USDA responsible for ensuring the nation's commercial supply of meat, poultry, and egg products is safe, wholesome and correctly labeled and packaged.

Front 21

What is the function of the US Public Health Service?

Back 21

It advices state and local government on sanitation standards for prevention of infectious disease and evaluates the wholesomeness of milk.

Front 22

What is the function of the USDA?

Back 22

It assures the nation's meat and poultry supply is safe, wholesome, unadulterated and properly labeled and packaged by enforcing an inspection program.

Front 23

What is the function of the National Marine Fisheries Service?

Back 23

It is responsible for inspecting seafood processors and importers.

Front 24

What is the market regulation for genetically engineered foods?

Back 24

The current regulation states that:

• only engineered food crops that contain substances (GMO) significantly diff from those in the consumer's diet need FDA approval.
• the product does not have to be labeled as a GMO unless the composition is changed.

Front 25

What are 4 things that buyers should know?

Back 25

1. The desire of the customers.

2. What is grown and packaged (where, by whom & when).

3. The understanding of the market and marketing channels.

4. How items are grown, manufactured or marketed.

Front 26

What is a value analysis?

Back 26

• The investigation of all components of an existing product or service.
• w/ the goal of discovering and eliminating unnecessary costs w/o interfering w/ the effectiveness of the product or service.
  

Front 27

What factors would you utilize to eval the make or buying decision of making a pizza from scratch/frozen pizza?

Back 27

Eval factors:

• Taste
• Quiality
• Qty to be prepaerd
• Acceptilbility
• Nutrient profile
• Apperance
• Labor skill required
• Storage capacity
• Preperation time

Service

Front 28

What are the cost items you would eval for the making of the pizza?

Back 28

Cost Items:

• Food cost
• Labor cost
• Yeilds
• Comparison of cost/pizza from scratch
• Frozen dough ball
• Pre-made frozen
  

Front 29

What are specifications (specs)?

Back 29

A detailed description of a product stated in terms understood by both buyer and seller.

Front 30

What type of spec would a manager use if they wanted to purchase a specific brand?

Back 30

They would need to buy an approved brand.

Front 31

What is this an example (Spec's) of: "a dishwasher has the capability to wash 7,000 dishes per hour".

Back 31

Performance

Front 32

A tilting skillet is an example (spec's) of?

Back 32

Technical

Front 33

What are the 5 things that must be included in all specs?

Back 33

1. Name of product

2. Federal grade or brand

3. Unit on which price is quoted

4. Name and size of container

5. Count per container or #/lb.

Front 34

What are quality grades?

Back 34

The palpability qualities of beef including:

• Tenderness
• Juciness
• Flavor
  

Front 35

What are the quality grades for beef?

Back 35

US:

• Prime
• Choice
• Select
• Standard
• Commercial
• Utility
• Cutter
• Canner
  

Front 36

What are yield grades?

Back 36

They identify "cut ability" diff among beef carcasses which are based on the predicted % of carcass weight in trimmed, boneless, retail cuts from the chuck, rib, loin and round.

Front 37

What does a kosher inspection entail?

Back 37

• Noting that the product meets the standards of a Mosaic and Talmudic laws
• as a supervised by a rabbi
• as "fit and proper"/"properly prepared"
  

Front 38

What are packer's brands?

Back 38

Quality standards are defined by the food producer for their own brand product following federal grades and standards>

Front 39

What is th difference between a Shield stamp and a round stamp (symbols for grading and inspecting meat)?

Back 39

A shield stamp: Identifies the federal grade.A round stamp: Denotes federal inspection that all processing was done under government supervision and that the product is wholesome.

Front 40

What are two methods of purchasing?

Back 40

Informal and formal

Front 41

Describe what informal and formal purchasing methods are?

Back 41

Informal: Involves ordering needed food supplies from a selected list of vendors based on daily, weekly or monthly quotes.

Formal: Competitive bid buying utilizing written specs, quantities needed and advance quoting of pieces from a vendor.

Front 42

What foodservice organizations would use informal purchasing methods?

Back 42

• Small restaurants
• Private institutions
• Commercial operations
  

Front 43

What foodservice organizations would use formal purchasing methods?

Back 43

• School systems
• Hospitals
• Most tax-supported institutions
  

Front 44

What are the methods for award biding?

Back 44

• Line-item bidding
• All-or-nothing bidding
  

Front 45

What is line-item bidding?

Back 45

Each supplier bids on each product and the one offing the lowest price on each item receives the order for that product.

Front 46

What is all-or nothing bidding?

Back 46

It is referred to as a bottom-line pricing and the award goes to the supplier who bids the best price on the complete list of items.

Front 47

What purchasing procedure identifies what needs to be purchased to fulfill the menu and needs of the food service operation?

Back 47

Recognition of need

Front 48

What purchasing procedure is a written form that identifies the product needed that can be internal or external?

Back 48

Purchase requisition

Front 49

What purchasing procedure can reach a common understanding on the elements of the product needs between the buyer and the seller.

Back 49

Negotiation

Front 50

What purchasing procedure is a list of goods shipped or delivered itemizing the product, price and any additional charges.

Back 50

Invoice

Front 51

What purchasing procedure is a form for recording the type and amount of supplies to order including specs and required date of delivery?

Back 51

Purchase order

Front 52

What does the purchasing procedure F.O.B stand for and what is the procedure?

Back 52

• It stands for free on board
• The procedure: The products are delivered to a specified place w/ all transport charges paid.
  

Front 53

What does this statement mean: "The economic advantages gained by competitive purchasing based on complete and thorough specs can be lost by poor receiving practices."

Back 53

• The receiver must do more than simply sign the invoice and accept the product.
• The receiving must accept responsibility for evaluation and verification of a product followed by proper storage and distribution.

Front 54

List 5 ways theft can be reduced in the receiving process.

Back 54

• Management/supervision of receiving, storage and distribution.
• Not having the same person responsible for purchasing and receiving.
• Maintaining good receiving practices
• Moving products immediately to storage.
• Do not allow delivery personal and sales persons in storage areas.

Front 55

List 5 steps a receiver should follow when ending with storage (except the weekly dry good order).

Back 55

• Inspect food for quality, in particular matching HACCP critical limits, QTY, and packing.
• Inspect food upon arrival in accordance w/ purchase order and specs.
• Acceptance or rejection of the order would take place .
• Upon acceptance, the receiving record would be completed.

The order would quickly be stored in either cold or dry stores using FIFO.

Front 56

What is invoice receiving ?

Back 56

Checking the QTY of each product delivered against the purchase order and the invoice.

Front 57

What is blind receiving?

Back 57

• Using an invoice or purchase order w/ the QTY blanked out
• The receiver records the QTY of each product received.
  

Front 58

What is electronic receiving?

Back 58

The use of computerized processes such as tabulator scales, UPC codes, bar codes, handled scanners.

Front 59

What is theft?

Back 59

Premeditated burglary

Front 60

What is pilferage?

Back 60

The internal stealing, usually in the smaller quantities.

Front 61

Identify 3 requirements for dry storage?

Back 61

• Dry and temp not over 70 degrees F
• Good ventilation
• Orderly and thematic storeroom arrangement

Front 62

Describe 4 requirements for refrigerated and freezer stores?

Back 62

• Hold internal fridge temps @ less than 40 degrees F and freezer boxes @ 0 to -10 degrees F
• Check temps @ lest 2 times daily w/ thermometers on each fridge and freezer.
• Train employees on energy conservation methods.
• Regular cleaning and organization of fridge and freezer.
  

Front 63

What is physical inventory?

Back 63

The actual counting of all inventory iems w/in a specified period of time (usually once per month).

Front 64

What is perpetual inventory?

Back 64

A running record of items on hand.

Front 65

Using the cost of food formula calculate the cost of food used the month of November:

Purchases in November $10,500

November 30 Inventory 2,250

October 31 Inventory 1,950

Back 65

$1950 + 10,500 = 12,450 – 2250 = $10,200

Front 66

Explain why an overabundance of inventory on hand can be costly to the foodservice organization.

Back 66

The carrying cost of the inventory prevents money from being used for other things. Large amounts of inventory can be wasted due to spoilage or create the potential for theft.

Front 67

Calculate inventory turnover for the following (Hint: Food cost for the month must first be calculated). Show your calculations.

• Beginning Inventory/month $2000
• Food Purchases/month $9000
• Ending Inventory $4000
  

Back 67

• $2,000 + 9,000 = 11,000 – 4,000 = 7,000 (cost of food used)
• BI $2,000 + EI 4,000 = 6,000/2 = 3000 (average food inventory)
• 7,000 / 3000 = 2.3. Inventory turnover is 2.3 times/month which is acceptable. A typical foodservice operation should turn over the inventory between 2-4 times/month.