1. PURCHASING

2. Definition – Ownership of commodity changes from one
person to another in terms of money.
INTRODUCTION
Purchasing is the second important step for a complete operation.
Once the planning of menu is over, we concentrate on purchasing so
that the following steps to be verified for an effective operation.
1. To balance the food cost.
2. Verification of stock for required purchasing.
3. Availability of raw material.
4. Availability of supplier.
5. On time supply.

3. OBJECTIVES
Maintain adequate supplies.
Minimise investments.
To run a smooth operation.
Maximise quality.
PURCHASING RESPONSIBILITIES
1. Determine when to order.
2. Control inventory level.
3. Establish quality standards.
4. Determine / write specifications.
5. Obtain competitive bids.
6. Investigate vendors.
7. Arrange financial terms.
8. Oversee deliveries.
9. Handle adjustments.
10.Arrange for storage.

4. PURCHASING CyCLE
Demand
from kitchen
Prepare
specification
for supplier
Prepare
order
Expedite
order
Send
requirements
on
requisition to
user
department
Check order
receipts &
invoices
Inspect foods
Receive food
& delivery
notes
Accounts for
payment
Stores
Requisition with
specification
Selection
of supplier
Order to
selected
supplier

5. IMPORTANT STEPS FOR FOOD PURCHASING
1.Determine purchasing need.
2.Know the market.
3.Establish and use specifications.
4.Design the purchase procedure.
5.Receive and check materials.
6.Evaluate the purchasing task.

6. KNOW THE MARKET
The buyer has knowledge of the items to be purchased
1. Where they are grown.
2. Seasons of production.
3. Approximate rate.
4. Conditions of supply and demand.
5. Government laws and regulations.
6. Marketing agents and services.
7. Processing.
8. Storage requirements.
9. Commodity & product, class and grade.

7. PURCHASING ACTIVITIES
1. Supplier selection
a. Price
b. Quality
c. Selection
d. Service
e. Delivery schedule
f. Dependability
g. Emergency order
h. Financing terms
2. Maintain appropriate inventory
a. Proper amounts
b. Proper items
3. Conduct negotiations
4. Market survey
5. Determine requirements
6. Maintain supplier relation
7. Educate suppliers about needs
8. Purchase, receive, store and issue
9. Record keeping and controls
(LIFO, FIFO & FEFO)

8. DIFFERENT METHODS OF PURCHASING
PURCHASING
By Contract By Daily
Market
List
Weakly or
Fortnightly
Quotation
List
Cash
&
Carry
Paid
Reserve
Specific
Period
Contract
Quantity
Contract
Total
Supply
Cost
Plus

9. PURCHASING by SPECIFIC
PERIOD CONTRACT
It determines the sources of supply and the price of
goods for a fixed period. This reduces the time and
labour of negotiating and ordering. It assists with
budgeting and pricing, when he prices of items are
fixed for a period of time. Items with a fairly stable
price such as milk, cream, bread, etc can be
contracted in this way.

10. PURCHASING by
QUANTITy CONTRACT
It ensures continuity of supply of a given quantity
of an essential item at an agreed price over a
particular trading period. The purchase of frozen
fruit and vegetables for use in a banqueting or a
summer season are typical examples when the
supply could be affected by the weather conditions
with subsequent price fluctuations.

11. Purchasing by DaiLy
MarKET LisT
This method is used when purchasing perishable foods on a
daily basis from 2 or more approved supplier. After a quick
stocktake, the head Chef complete a daily market list
according to the departmental requirements for next days
business. The list would then be processed by purchase
manager. Each approved supplier then asked to quote a
price for each of the item required. After that the decision
made by purchase manager as to where to place the order.
This may result in 2 or 3 suppliers each receiving part of
the total order.

12. Purchasing by wEEKLy
quoTaTion LisT
This method is used to purchase grocery items. The head
store keeper complete the stock in hand and based on
business expected prepares the order list. Purchasing
officer sends this list to all approved suppliers to quote
their prices. On receipt of quotation a decision then made
about where the orders for each items are to be placed. This
would be based on the requirements in the next week.

13. Purchasing by cash &
carry
This method is of particular interest to the medium and
small establishments whose orders are often not large
enough to be able to get regular deliveries from
wholesalers and food manufacturers. ‘Cash and carry’ food
warehouses are situated in all towns and resemble in layout
and operation that of very large food supermarkets. The
main difference is that the ‘cash and carry’ food
warehouses is only available to traders.

14. aDvanTagEs of buying by cash & carry
1. The hours of business are usually longer than the other
food wholesalers.
2. Small or large quantities may be purchased at
competitive prices.
3. Customers are able to see, check and taste the particular
products.
4. It helps to keep low stock in hand.
DisaDvanTagEs of buying by cash & carry
1. Caterers have to provide their own staff and transport to
collect the items.
2. Caterers have to pay cash for the items they purchased.

15. Purchasing by PaiD
rEsErvE
This method is used to ensure the continuity of supply of
an item for the menu which is particularly important for the
restaurant. Caterers are buying in advance a large quantity
of commodity to cover the needs for several months ahead
and requisitioning their weekly requirements from
suppliers who would hold the stock. Example frozen jumbo
pacific prawns.

16. Purchasing by total
suPPly
This method is relatively new. It is a method offered only
by a few major suppliers who are able to offer a full supply
service of all commodities. Its reduces volume of
paperwork's and far fewer deliveries. The main
disadvantage is that prices may not be as competitive as
when using several suppliers.

17. Purchasing by cost
Plus
This method is used frequently in the welfare sector. The
establishment agrees to pay an approved supplier exactly
the same price that the supplier paid for the commodities
plus a minimum agreed percentage. The percentage
includes the cost of handling and the delivery charges and a
lowest profit element for the supplier.

18. Purchase sPecification for food
Purchase specification should be used whenever
possible in purchasing. It is a concise description
of the quality, size and weight required for a
particular item.
The reason for preparing specification:
1. It establish a buying standard of a commodity.
2. It informs the supplier in writing precisely what is required.
3. It provides detail information of the goods to the receiving clerk and
storekeeper.

19. Purchasing tiPs
1. Keep update and sound knowledge of all commodities.
2. Be aware of different types of qualities of each
commodity.
3. Keep eye on price variation.
4. Organise a efficient system of ordering.
5. Explore all possible supplier.
6. Request price list as frequently as possible.
7. Buy perishable goods when they are in full season.
8. Deliveries must all be checked against the orders.

20. Thank you
… an
anish banerjee
initiative