The Purchasing Function

Chapter 6

The Purchase Function

• The importance– Not how much you make but rather how much you

spend!!– Training• Sources• Pricing• Seasonal quality• Possible subs

• Controlling

The Purchase Function

• Controlling– What do you need– Essential vs non-essential– Bulk vs splits– Quality• What is your level• How important is it• Color, shape, form, length, age, desired ripeness, size,

brand, region

The Purchase Function

• Controlling– Quantity• Too much or too little• Space• Perishability

– Specs on time & price• Ordering should be at your convenience, not the vendors• Vendors need to have the products to ship• Vendors need to able to deliver items

Purchasing Strategies

• Strategies allow purchasers to level the playing field– Identify needs– Maximizing purchases• Co-op large volume vs small less trips for

vendor– Comparing – purveyors, brands, & yields• Know them, do your homework• Its not always about the price• Sanitation• Backups

Purchasing Strategies

• Strategies allow purchasers to level the playing field– Comparing – purveyors, brands, & yields• Brand loyal yes or no????• Yields – what are they, how do I get them• Different types of F&B operations need different items

– Cost effective discounts• Use of coupons and promotions• Buy so many get rebate

Purchasing Strategies

• Strategies allow purchasers to level the playing field– Unit pricing• Gallon vs qt items – ketchup, sugar

– Safe amounts of inventory• Inventory is money• Pars – vary by type of op

– Labor saving products• Labor skill level, equipment, storage

Purchasing Strategies

• Strategies allow purchasers to level the playing field– Compare cash to credit• 15 to 30 days• Avoid late charges• Cash flow

– Compare interest rates• Credit from purveyor or bank??

Purchasing Strategies

• Strategies allow purchasers to level the playing field– Contracts, understand them• Read them• Authorized to do it• Invoice signing

– Be aware of “good deals”• Accurate invoices• Watch busy times

– Reputable sources ethically

Purchasing Systems

• Ask these questions– Can you make it or buy it– Do you need that brand– Can you delay purchase– Cash or not– Who is the best source

Purchasing Systems

• Purchasing directs– Used right away– Theft/waste issues– Corporate purchasing card

• Buying methods– Cost plus -Co-op – Bid -One stop shopping– Stockless– Standing orders

Purchasing Furniture, Fixtures & Equipment

• Larger cost – usually – pens• Watch for:– Ethical behavior– Replacing or discarding usable equipment– Discarding salvageable parts– Improper disposal of old stuff– Intentionally breaking or marring– Discard repairable items– Substandard equipment