Purchasing

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Purchasing

• Chapter 6

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What is Purchasing?

• Purchasing is the process of getting the right
  product into a facility at the right time and in
  a form that meets pre-established standards for
  quantity, quality, and price.
• Procurement

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The Market

• Market Channel
• Primary Market
• Secondary Market
• Local Market
• Brokers

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Market Regulations

• USDA
• Food Safety and Inspection Service
• Meat, Poultry, Eggs

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Market Regulations

• FDA
• Pure Food and Drug Act, 1906
• Food and Drug Cosmetic Act, 1938
• Fair Packaging and Labeling Act, 1966
• Nutrition Labeling Regulations, 1973
• Nutritional Labeling and Education Act, 1990

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Market Regulations

• Enforced by FDA
• Misbranded food
• Standards of identity
• Standards of quality
• Standards of fill

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Market Regulations

• National Marine and Fisheries Service
• U.S. Public Health Service
• Environmental Protection Agency
• Department of the Treasury

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Flow of Purchasing Activities

• Identify needs

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Flow of Purchasing Activities

• Identify needs
• Determine standards of quality and write
  specifications

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Product Selection

• Market forms of food
• Value Analysis
• Determining the best value in services and
  features for the price obtained.
• Standards of quality vary from operation to
  operation
• Considerations
• Cost
• Facility
• Employee skills
• Menu
• Equipment use
• Storage
• Customers

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Standards of Quality

• Quality standards
• Grades
• Grading and Acceptance Services
• Pg. 212
• Brands

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Specifications

• Includes
• Name of the product
• Federal grade or brand
• Unit on which price was quoted
• Name and size of container
• Count per container or approximate number per
  pound
• Example
• Yellow Cling Peaches, Choice, 6-No. 10 cans/case

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Specifications

• Additional information
• Count and size of items in the container
• Weight ranges
• Type of processing or packaging
• Degree of ripeness
• Additional information for different food
  categories pg. 219
• Example Yellow Cling Peach Halves, Choice, size
  30-35 in No. 10 can, packed in light syrup, 6-No.
  10 can/case.

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Specifications

• Chicken Breast Fillets
• Form boneless, skinless, Cajun marinated
  breast halves with no rib meat
• Use grilled Cajun flavored chicken breast
• Class broiler/fryer
• Preservation form frozen, 0 F inside case on
  delivery in refrigerated truck
• Quality U.S. Grade A
• Weight 3 ½ to 4 ½ ounces
• Pack 10-pound carton
• Price by the carton

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Flow of Purchasing Activities

• Identify needs
• Determine standards of quality and write
  specifications
• Estimate quantities needed

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Quantities Needed

• Frequency of deliveries
• Storage space
• Amount of money
• Method of buying
• Type of food

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Flow of Purchasing Activities

• Identify needs
• Determine standards of quality and write
  specifications
• Estimate quantities needed
• Calculate desired inventory or stock levels

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Inventory Stock Level

• Par Stock
• Mini-max

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Flow of Purchasing Activities

• Identify needs
• Determine standards of quality and write
  specifications
• Estimate quantities needed
• Calculate desired inventory or stock levels

• Identify amounts to purchase
• Develop purchase orders

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Purchase Orders

• P.O.
• Written requests to vendor to sell goods or
  services to a facility
• Requisitions
• Authorization

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Flow of Purchasing Activities

• Identify needs
• Determine standards of quality and write
  specifications
• Estimate quantities needed
• Calculate desired inventory or stock levels

• Identify amounts to purchase
• Develop purchase orders
• Conduct market research

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The Vendor

• Careful evaluation
• Facilities
• Policies
• Value added services
• Ethics in purchasing
• Collusion

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Flow of Purchasing Activities

• Identify needs
• Determine standards of quality and write
  specifications
• Estimate quantities needed
• Calculate desired inventory or stock levels

• Identify amounts to purchase
• Develop purchase orders
• Conduct market research
• Select and negotiate with vendors

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Methods of Purchasing

• Formal
• Issuing bid requests
• Tabulating and evaluating bids
• Awarding bids
• Informal
• Price quotations
• Select vendor and place order

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Variations

• Cost-plus purchasing
• Prime vending
• Blanket purchase agreement
• Just-in-time purchasing

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Types of Purchasing

• Centralized purchasing
• Group or cooperative purchasing
• Group purchasing organization (GPO)