Managing Inventory Control and Procurement
Read this chapter. It uses the food service industry as a case study because of the different types of raw material inventory food establishments need to consider. As you read the section on Three Ways to Increase Your Value, can you recommend a fourth or even a fifth to help these businesses?
BASIC INVENTORY PROCEDURES
Ordering Process
The amount of food to order depends on the number of people to be served (including customers, patients, employees and staff, students, retail operations, and catering), the portion size, and the number of times an item is on the menu. For example, canned tomatoes could be used in a number of menu items during the order period. Other factors that affect the purchase amount include the amount of food on hand, the frequency of food deliveries, and the storage space available for inventory, as previously discussed.
Steps in the Ordering Process
| Step 1: | Make a list of all the food items required for the menu. Estimate the demand for each menu item based on records of past experience. |
| Step 2: | Refer to standardized recipes to determine the required amounts of various ingredients. |
| Step 3: | Translate quantities needed into purchase units, e.g., No. 10 cans. |
| Step 4: | Take inventory of food on hand and subtract this amount from the total amount required to determine the amount to purchase. |
Table 10.16 The Four Steps in the Ordering Process
Once the supplier is chosen and the order compiled, typically a purchase order is prepared. The purchase order lists information for both the purchasing organization and the supplier, the products ordered, with the amounts, bid price and extended price and the total for the purchase order. Several copies are typically prepared so that the purchaser, supplier, accounting office and receiving clerk all have copies.