1. Methods of Purchasing
By: Kheesa Marie B. Sonaba
BSND 3-1N

2. Two principal Methods of Buying:
• Informal or open-market buying
• Formal competitive bid buying

3. Purchasing is a management function, and,
as such, the foodservice administrator will
have policies and procedures to guide him
or her in setting up a course of action.

4. The selected methods of buying
depends on:
•
•
•
•
•
Institutional policies
On the size of the organization
The amount of money available
Location of the vendors
And the frequency of deliveries

5. 1.) Informal or Open-Market
Buying

6. Informal purchasing is a commonly
used method of buying, especially in
smaller foodservice operations.
Example: karinderya

7. Characteristics of Informal or Open-Market
buying the system involves:
Ordering needed food and supplies from
the list of vendors based n daily, weekly, or
monthly price quotations. (Quotation- an
amount stated in current price for a
desired product or service.

8. • Prices are based on a set specifications furnished to
interested vendors.
• The buyer may request daily prices for fresh fruits
and vegetables but may use a monthly quotation list
for grocery items.
• The order is placed after consideration of price in
relation to quality, delivery, and other services
offered.
• Contact between the buyer and vendor is made by
fax, computer, telephone, or through sales
representatives who call on the buyer.

9. • The buyer and vendor must agree on quantities
and prices before delivery.
• Only vendors who give reliable service and
competitive prices should be considered for
open-market buying.

10. Purchasing order form

11. Purchase
order form

12. The use of Price Quotation and order
forms on which to record the prices
submitted by each vendor is an ais to
the buyer.

13. 2.) Formal competitive Bid
buying

14. In formal competitive bid buying,
written specifications and estimated
quantities needed are submitted to
vendors with an invitation for them to
quote prices, within a stated time, for
the items listed.

15. Bids are opened on a designated date,
and the contract generally is awarded
to the vendor with the best price and
quality.

16. Advantages and disavantages
• Bid buying is often required by government
procurement systems, such as those found in
correction facilities, and is found to be
advantageous by large foodservice or multipleunit organizations.
• The bid sytem is satisfactory for canned goods,
frozen products, staples, and other nonperishable foods.

17. Advantages and disavantages
• the system is time consuming, and the planning
and requests for bids must be made well in
advance so that the buyer has time to distribute
the bid forms and the suppliers have time to
check availability of supplies and determine a
fair price.
• It lend itself to manipulationwhen lage amount
of money is involved.

18. Example: ketchup in McDonalds

19. Example: Ice cream in Vikings
“Big scoop”

20. Example: softdrinks in PUP- “pepsi”

21. Variations on methods of
Purchasing

22. Cost-plus Purchasing
• A buyer agrees to buy certain items from a
purveyor for an agreed-on period of time
based on fixed mark up over the vendor’s
cost.

23. Prime Vending
• Is a method of purchasing that has gained
popularity and acceptance among restaurant
and non-commercial buyers during the past
several years. The method involes formal
agreement with a single vendor to supply the
majority of product needs.

24. Blanket purchase agreement
• Is sometimes used when wide variety of
items are purchased from local suppliers,
but the exact items, quantities, and
delivery requirements are not known in
advance and may vary.

25. Just-in-time Purchasing
• It is in fact an inventory and production
planning strategy where the product is
purchased in the exact quantities required
for the specific productionrun and
delivered “just-in-time” to meet the
production demand.

26. -the
Thank you ! ;)
END-