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Agenda
 Chapter Two- Key terms review
 Chapter Three – The Purchasing Function
 Chapter Three – Key terms review
 Chapter Four – The Procurement Process & Supplier
Selection
 Inventory Book Set-Up
OH 3-1
Key Term Review
 Blanket order
discount
 Buyer’s authority
 Buyer’s responsibility
 Cash discount
OH 3-2
 Free sample
 Job description
 Job specification
 Kickback
Key Term Review continued
OH 3-3
 Promotional discount
 Reciprocity
 Purchasing skill set
 Steward sales
 Quantity discount
 Volume discount
Quality Standards in Purchasing
3
OH 3-4
3-4
 Inventory and Purchasing
Chapter Learning Objectives
 Identify and communicate quality standards.
 Identify factors contributing to the establishment
of quality standards.
 State why it is important to convey and adhere to
quality standards.
 Describe buyer considerations when conducting
a make-or-buy decision.
OH 3-5
Quality Standards
Identify and communicate in writing a record of
purchasing criteria, product standards and
specifications for
 Managers
 Vendors
 Employees
OH 3-6
Quality Standards continued
 Clearly communicate product and service
standards and requirements to staff and
suppliers to avoid ordering and shipping errors.
OH 3-7
Quality Standards continued
 Identify an operation’s specific product or service
requirements for bid purposes.
 In most cases, bid buying results in
OH 3-8

Lower prices

Consistent quality

Reduced paperwork

Lower purchasing-related labor costs
Quality Standards continued
 Allow an operation to clearly identify acceptable
replacement items
 For use when
 Requested products are unavailable
 Product demand exceeds requested product supply
OH 3-9
Quality Standards continued
 Improve the ability of employees to identify and
prepare menu items by providing
 Consistent yield
 Predictable trim
 Constant viscosity (thickness or flow)
 Predictable plate coverage
OH 3-10
Determining Quality Standards
 Quality standards are based upon the style of
restaurant and its needs for products and
services.
 Resources available when developing quality
standards include
 Purchasers
 Suppliers (vendors)
 In-company personnel
 Outside consultants
OH 3-11
Product Specifications
 Product specifications specify exactly what an
operator is seeking to buy from its vendor.
 In this case, the operator is the customer, and
the vendor must fulfill the customer’s needs.
 It is easiest to fulfill customers’ needs when they
are clearly known!
OH 3-12
Product Specifications continued
 An item’s intended use is its most important
characteristic when specifying quality standards.
 Intended use addresses
 In what form?
 In what size?
 At what temperature?
 At what stage of processing?
 In what packaging?
OH 3-13
Product Specifications continued
Specific information includes:
 Yield
 Packaging
 Color
 Quality level
 Grade
 Count
 Size
 Temperature
 Processing requirements
 Shipping methods
OH 3-14
Product Specifications continued
 The exact name is used to identify, as closely as
possible, the desires of the buyer.
 Food names may vary by region
 May include sizes and other factors
OH 3-15
Product Specifications continued
 Brands can be indicators of quality.
 Operators may prefer to buy a brand name.
 Guests may prefer to see brand name products
served to them.
OH 3-16
Product Specifications continued
 When products come
in different packaging
formats, product
specifications must
be very exact.
OH 3-17
Product Specifications continued
 Item size will, in many cases, directly affect
portion cost.
 Size may refer to
 Weight
 Volume
 Count
OH 3-18
Product Specifications continued
 Acceptable trim indicates the amount of
allowable waste acceptable upon delivery.
 Excessive trim will increase portion costs.
 Excessive trim reduces profits.
 Purchase prices typically increase as trim loss
is reduced.
OH 3-19
Product Specifications continued
 Grade is an indicator of quality.
 The United States Department of Agriculture
(USDA) grades are recognized standards in the
foodservice industry.
 In most (but not all) cases, grading is not
mandatory.
OH 3-20
Product Specifications continued
 Market form indicates how an item is processed
prior to packaging.
 Examples include
 Whole
 Diced
 Shredded
 Chopped
 Fresh
 Frozen
OH 3-21
Product Specifications continued
 Color is an indicator of age and identification
 Age examples include
 Green bananas
 Red strawberries
 Identification examples include
 Green beans
 Red grapes
OH 3-22
Product Specifications continued
 Accuracy in menu legislation requires that places
of origin, if used on the menu, must correctly
reflect the true origin of the item sold.
 For example
 “Idaho Rainbow Trout” must actually come from
Idaho.
 “New York Cheesecake” must come from New York.
OH 3-23
Product Specifications continued
 When designating acceptable substitutes, it is
always best not to reduce quality standards!
OH 3-24
Product Specifications continued
Unit Pricing
 Pricing by
 The dozen
 The case at an agreed-upon case size
 Alternative units
Price Limits
 Buyers may predetermine the maximum
price (limit) they will pay. Examples include
prices for fresh lobsters and other types of
rare seafood.
OH 3-25
Product Specifications continued
 Temperature control procedures
 Room temperature
 Refrigerator temperature
 Frozen (freezer) temperature
OH 3-26
Factors Affecting Quality Standards
 The item’s intended use
 The operation’s concept and goals
 The menu
 The skill level of employees
OH 3-27
Factors Affecting Quality Standards
continued
 Budgetary constraints
 Customer’s wants and needs
 Seasonal availability
 Availability of storage
OH 3-28
Make or Buy:
The Case for Buying Food
 Buying food in a partially or fully prepared state:
 Ensures consistency
 May be cost effective because product waste is
reduced
 Saves time
 Saves storage space
OH 3-29
Make or Buy:
The Case for Making Food
 Quality may be better.
 Guests’ satisfaction may be higher.
 Food costs are generally lower.
 Signature dishes are easier to develop.
OH 3-30
How Would You Answer
the Following Questions?
1. Product (specifications/standards) identify the
characteristics desired in a product or service purchased
by a foodservice operation.
2. Which of the following is not a category typically used to
develop product specifications?
A.
B.
C.
D.
Brand
Delivery times
Size
Packaging
3. Employee __________ __________ is an important
factor affecting quality standards.
4. The final quality of a “made from scratch” item will
always exceed the quality of a purchased item.
(True/False)
OH 3-31