Published on September 25, 2015
1. DMC2523 MENU PLANNING AND COST CONTROL LAURA LAW - PERAK COLLEGE OFTECHNOLOGY
2. • Responsibility for purchasing • Perishable and non-perishables • Developing standard-procedures • Food receiving control LAURA LAW - PERAK COLLEGE OFTECHNOLOGY Handout Copy of Text Book
3. 3 Responsibility for Purchasing The responsibility of purchasing can be delegate to any one in the foodservice operation depending on organizational structure and management policies. Control Process and Purchasing Four steps in the control process apply here: 1. Requiring that standards and standard procedures be established 2. That employees be trained to follow those standards and standard procedures 3.That employee out-put be monitored and compared to established standards 4. Remedial action be taken as needed
4. 4 Perishable and Non-perishable Perishable are those items, typically fresh foods, that have a comparatively short useful life after they have been received. Should be purchased for immediate use only as they deteriorate quickly. Non-perishable are those food items that have a longer shelf life. Often referred to as groceries or staple. They may be stored in the containers in which they are received, stored on shelf at room temperature for weeks or months. They do not deteriorate quickly.
5. 5 Establishing control over purchasing ensure a continuing supply of sufficient quantities of the necessary foods, with each of quality appropriate to its intended use and purchase at the most favorable price. Standard must be develop for: 1. The quality of food purchased 2. The quantity of food purchased 3. The price at which food is purchased
6. 6 •It is important first to determine which perishable & non-perishable food is required in order to produce products of consistent quality. •Thus it is important to draw up the list of all food items to be purchased, including those specific and distinctive characteristic that best describe the desired quality of each in written description also known as standard purchase specifications. •It is usually base on federal grading or common market grading.
7. 7 Through Standard Purchasing Specification : 1. To determine exact requirement in advance for any products 2. To purchased according to specification to prepare several different items on the menu. 3. They eliminate misunderstanding 4. To have standard competitive bidding 5. They eliminate for detail verbal description 6. To facilitate checking food as it is received.
8. 8 •Quantity standard for purchasing are subjected to continual review and revision, often on a daily basis. •Perishable Item .The correct amount must be purchased to avoid wastage. •A basic requirement of the purchasing routine is to take daily inventory of perishable. •The routine requires that determinations be made of anticipate total needs for each item, base on future menus and often on experience as well.
9. 9 Non-perishable items does not present the problem of rapid deterioration, the do represent considerable amount of money invested in material in storage. The goal here is to avoid excessive quantities on hand. Through proper planning. The ways to maintain inventories of non perishables at appropriate levels, most are variations on two basic methods: 1. Periodic order method 2. Perpetual inventory method
10. A method for ordering food or beverages based on fixed order dates and variable order quantities. The calculation of the amount of each item to order is comparatively simple: Amount required for the upcoming period -Amount presently on hand + Amount wanted on hand at the end of the period to last until the next delivery =Amount to order
11. orders for non perishables are placed every two weeks, one of the items ordered is crushed tomatoes, purchased in cans, packed 6 cans to a case. The item is used at the rate of 7 cans per week, and delivery normally takes five days from the date an order is placed. If the steward in this establishment found 9 cans on the shelf, anticipated a use of 14 cans during the upcoming period of approximately two weeks, and wanted 10 cans on hand at the end of that period, the calculation would be: 14 cans required - 9 cans on hand +10 cans to be left at the end of the period (desired ending inventory) = 15 cans to be ordered on this date
12. Both delivery time and daily usage for the period must be used to determine the DEI. Furthermore, it is advisable to include some additional quantity to serve as a safety factor, just in case the normal delivery is delayed or business volume is higher than expected in the coming period. For the example given, the calculations for DEI would be as follows: Daily usage X Number of days in delivery period = Normal usage Normal usage + Safety factor (50%) =DEI 14 cans per week ÷ 7 days = 2 cans per day 2 cans per day X 5 days in delivery period = 10 cans normal usage 10 cans normal usage + 50% safety factor =15 cans DEI This is known as the Reorder Point in the Perpetual Order Method
13. 13 Perpetual Inventory Method 1. To ensure that quantity purchase are sufficient not excessive 2. To provide effective control on stored item for the future. The reorder point is quite simply the number of units to which the supply on hand should decrease before additional orders are placed. The Par Stock means simply the maximum quantity of a given item that should be on hand. This helps to 1. Storage space 2. Limits on total value of inventory 3. Desired frequency of ordering 4. Usage 5. Purveyors’ minimum order requirements
14. Reorder point is calculated in the following manner. If normal usage is 14 cans per week and it takes five days from date of order to get delivery, then the basic number of cans needed is 10. However, because delivery may be delayed, because usage may increase for unforeseen reasons, or because both of those possibilities may occur at once, it is advisable to increase that amount somewhat. The amount of the increase is a matter for management to decide. For our purposes, we will use 50 percent for all calculations. If that were so in this case, the reorder point would be set at 15 cans. Under the periodic method, the DEI would similarly be calculated as 15 cans. Par stock 20 -Reorder point 15 =Subtotal 5 +Normal usage until delivery 10 =Reorder quantity 15 14
15. 15 The availability of sources of supply varies considerably from one location to another. It depends on ownership policy, availability of supplies and general market condition, supplies can be choose from: •Wholesalers •Local producers •Manufactures •Packers •Local farms •Retailers •Cooperative association Perishable because prices for perishable often fluctuate daily it is necessary to find the price from different supplier through telephones. Non-Perishable normally with fewer suppliers with lowest price and consistent quality, small quantity & delivery wise.
16. 16 This is usually used in chain operations and occasionally established by small groups of independent operator with similar needs/ Advantage. •Purchased at lowest price because of volume •Desired quality as agent has greater choice •Obtain exact specification •Larger inventory ensuring reliable supply •Dishonest greatly reduced. Disadvantage •Little freedom for its particular needs •No advantage on local specials at reduce price •Limiting changes of menu.
17. 17 INTRODUCTION The primary objective of receiving control is to verify that quantities, qualities and price of food delivered conform to orders placed. The person that usually responsible for this job is given the job title as “receiving clerk’. Establishing standard for receiving Established standards to govern the receiving process are: • The quantity delivered should be the same as the quantity listed on order forms and also should be identical as the quantity listed on the invoice or delivery bill. •The quality of item delivered should conform to the establishment’s standard purchase specification for that item •The prices on the invoice should be the same as those stated on the order form
18. 18 THE INVOICE A bill from a vendor for good or services, often presented as the goods are delivered or the services performed. Quantity Unit Description Unit Price Amount 30 biji Durian 8.50 255.00 10 kg Striploin 12.35 123.50 INVOICE. Gunasemula Company. 230 Kampung Saya To: The Sugar & Spice Café Jalan Haji Taha. Date: June 12th Received By:___________________ Date: ___________
19. 19 Example of Standard procedure for receiving 1. Verify that the quantity, quality and price for each item delivered conforms exactly to the order place 2. Acknowledge that quantity, quality and price have been verified by stamping the invoice with the rubber invoice stamp provided for that purpose 3. List all invoices for foods delivered on a given day on the Receiving Clerk’s Daily Report for that day, and complete the report as required, or enter appropriate information directly into a computer terminal 4. Forward complete paperwork to proper personnel 5. Move food to appropriate storage areas.
20. 20 INVOICE STAMP rubber stamp used by a receiver to overprint a small form on an invoice for the purpose of recording the data on which goods were received, as well as the signature of the several individuals verifying the accuracy of data on the invoice. 1. Verification of the date on which food was received 2. The signature of the clerk receiving the food who vouches for the accuracy of quantity, quality and price. 3. The steward’s signature, indicating that the steward knows the food has been delivered 4. The food controller’s verification of the arithmetical accuracy of the bill. 5. Signatory approval of the bill for payment by an authorized individual before a check is drawn.
21. 21 INVOICE STAMP Date: Received by: (Receiving Clerk) Steward: Price and Extensions Verified: (F & B Cost Controller) OK for Payment: (Account Department)
22. 22 Receiving Clerk’s daily Report is an important accounting documents. Food is divided into at least two categories: •Item Purchase for immediate use – direct (extremely perishable nature that are purchased more or less daily basis for immediate use) – and will become the cost immediately. •Item Purchase to be kept in inventory – store (Meat, cans, bottles and boxed) – and will become the cost when the item is issued for production. The Receiving Clerk’s Daily Report is prepared by receiving clerk, who merely copies data from each invoice to appropriate columns on the reported and then enters the total for each invoice into one of the three columns under the general heading “Purchase Journal Distribution” – Food Direct, Food Stores or Sundries.
23. Receiving Clerk’s Daily Report No. 1 Date: June 11, xxxx QTY Unit Description √ Unit Price Amount Total Amount Purchase Journal Distribution Direct Food Food Stores Sundries Market Price Meats 30 lbs Strip Steak √ 7.95 238.50 10 lbs Breast of veal √ 4.65 46.50 285.00 285.00 Jong’s Farm 10 kg Crocodile Meat √ 2.50 25.00 25.00 25.00 Kau Pun Farm 1 Kg Daun Kucai √ 5.00 5.00 2 Bdl Pucuk Paku √ 2.00 4.00 9.00 9.00 319.00 319.00 9.00 310.00 23
24. 1. List 10 items considered perishable and 10 considered nonperishable in the foodservice industry. 2. Nestor ’ s Restaurant uses the periodic order method, placing orders every two weeks. Determine the quantity of canned peaches to order today, given the following: a. Normal usage is one case of 24 cans per week. b. Quantity on hand is 10 cans. c. Desired ending inventory is 16 cans. 3. Harvey ’ s Restaurant uses the periodic order method, ordering once a month. Determine the proper quantity of tomato juice to order today, given the following: a. Normal usage is one case of 12 cans per week. b. Quantity on hand is 6 cans. c. Desired ending inventory is 18 cans. d. The coming month is expected to be very busy, requiring 50 percent more tomato juice than normal.
25. 4. The Midtown Restaurant uses the perpetual order method. One of the items to be ordered is canned pears. Determine reorder point and reorder quantity, given the following: a. Normal usage is 21 cans per week. b. It takes four days to get delivery of the item. c. Par stock is set at 42 cans. d. Cans come packed 12 to a case. 5. The Last Chance Restaurant uses the perpetual order method. One of the items in the inventory is canned green beans. Determine reorder point and reorder quantity, given the following: a. Normal usage is two cans per day. b. It takes five days to get delivery of the item. c. Par stock is 29 cans. d. Cans come packed six to a case.
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