Controlling Food Costs in

Module Purchasing and Receiving

Purchasing and receiving are two key areas in the

control process of the restaurant and foodservice industry.
When customers orders an item from the menu, the customer
expects to receive what the menu is offered. The person
responsible for purchasing the items for the operation must
recognize this customer expectation and procure early what
is stated on the menu.
This module introduces you to the purchasing the
process and various factors that need to be considered to
ensure that the customers’ food and menu expectations are met or exceed. It will also present
the various methods you can use in purchasing various products.
You will learn that in addition to buying the correct item, the correct amount must be
acquired. If too many goods are purchased, not only is the restaurant’s capital tied up in inventory,
but the goods are perishable, they might spoil. If too few goods are purchased, there is the danger
of running out. Like in other section, purchasing is an area where costs can get out of line.
Therefore, controls must be instituted to prevent this from happening.
You will learn how to determine pricing by looking at the AP and EP costs of items. You
will learn to figure costa and the amounts to purchase using such techniques as yield tests, par
stock and butcher tests.
Perishable and nonperishable food items also have unique attributes that need to be
considered in the purchasing process.
Finally, receiving is an area in many restaurant or foodservice operations that gets little,
if any, consideration. In this module you will learn that inaccurate deliveries and invoices, spoilage
and the theft can all contribute to food cost deviating from the standard.

Learning Outcome: Calculate a butcher test, par stock amount to order purchase,
amount of goods to purchase for catered events.
.
Learning Objectives:
 Explain how a specification becomes a control in the purchasing function
 Distinguish between perishable and non perishable goods and their relationship to
the purchasing cycle
 Describe the proper procedures for receiving goods
Content Exploration
Purchasing Procedures and Cost Control
The first decision that needs to be made in purchasing is to determine who will do it. In
very large foodservice operations such as major hotels, hospitals and college
foodservices, a purchasing agent will do the buying. In smaller operations, it could be the
general manager, production manager, or chef. Regardless of who will do it, there is one
person should purchase and this person is referred to as the buyer and is the sole person
responsible for purchasing goods for an operation. This eliminates regarding what to
purchase and when, also, minimizes the risk of running out of a product or having too
much of it on hand.
It is very important that the person selected to purchase products is trained and
knowledgeable about the product to purchase. Management should delegate this
responsibility it must be passed on someone who has been trained in the operation’s
purchasing procedure.

What to Purchase?
The question of what should be purchased is answered by the use of a product
specification or spec for each item purchased. A product specification (spec) is simply
a detailed description of a recipe ingredient or menu item. A spec is a way for you to
communicate with a vendor, in a very precise way, so that your operation receives the
exact item you have requested, every time you request it.
Because there Is such a wide variety of food available, specification is a major control
device. Management can use a specification by setting a policy as to which brands,
grades, and variety of food products will be ordered for the operation. Basically, it tells the
supplier exactly what the buyer wants. For example, if a buyer were to order a case of
apples from a produce company, the company could possibly ship any type of apple.
Without a specification, the supplier would not know the variety, degree of ripeness, pack,
and size.
Sample Product Specification
Product Name Bacon, sliced Spec #:117
Pricing Unit: lb.
Stabdard/Grade: Select No. 1
Moderately thick slice
Oscar Mayer item 2040 or equal
Weight Range: 14-16 slices per lb.
Packaging: 2/10 lb. Crayovac packed
Container size: Not to exceed 20 lb.
Intended Use: Bacon, lettuce, and tomato sandwiches
 Other Information: Flat packed on oven-proofed paper, never frozen
Product Yield: 60% yield

A properly prepared product specification will include the following information:

1. Product name or specification number
2. Pricing unit
3. Standard or grade
4. Weight range/size
5. Processing and/or packaging
6. Container size
7. Intended use
8. Other information such as product yield
Product Name
Example, a mango is a tropical fruit to those in the Southwestern United States, but may
mean a bell pepper to those in the Midwest. Most common color of bell peppers are green,
but it can be purchased in yellow, orange and red forms. Thus, the product name used
on a specification must be specific to clearly identify the item you wish to buy.
It is also helpful to assign a number, as well as a name, to the item you wish to buy. A
deli restaurant might use 10 to 20 different types of bread, depending on the intended use
of the bread. Each type of bread may be given a specific name and number. Other items
such as cheese which come in a variety of forms (block, sliced, shredded).
Pricing Unit
These maybe pounds, quarts, gallons, cases or any other commonly used measurement
unit which the item is sold.
Standard or Grade
The US Department of Agriculture (USDA), the Bureau of Fisheries, and the Food and
Drug Administration have developed standards or grades for many food items. One
example is the USDA’s grades for beef used in most foodservice operations. In
descending order of quality these are:
 Prime
 Choice
 Select
 Standard
Weight Range/Size
Weight range or size is important when purchasing some meats, fish, poultry, fruits and
vegetables.
Count, in the hospitality industry, is a term that is often used to designate product size.
For example, 16 to 20 count shrimp refers to the fact that, for this size shrimp, 16 to 20 of
the individual shrimp would be required to make 1 pound.
Processing and or Packaging
This refers to a product’s state when you buy it. Apples for example, maybe purchased
fresh, dried, canned or frozen. Each form will carry a price appropriate for its processed
or packaged state.
Container Size
This refers to the can size, number of cans per case, or weight of the container in which
the product is delivered.
Intended Use
Different types of the same item are often used in the same foodservice operation but in
a variety of ways. Breads, dairy, apples, and other fruits are additional examples of foods
that come in a variety of forms. It is important to recognize that the best for of a product
is not necessarily the most expensive form. Rather, it is the form that is best for a product’s
intended use.
Other Information such as Product Yield
Product yield is the amount of product that you will have remaining after subtracting losses
resulting from cleaning, trimming, cooking and portioning.
THE PURCHASE ORDER
Purchase order (PO) is a tool used throughout the purchasing, receiving and accounts
payable process. Also, a detailed listing of products requested by a buyer. It may include
a variety of product information but must always include the quantity ordered and the price
quoted by the supplier.
Example of Purchase Order (PO)
Vendor: Scooter’s Produce Purchase Order #: 56
Vendor’s Address: 123 anywhere Delivery Date: 1/18/20
Vendor’s Telephone #: 1-800-999-000
Vendor’s Fax #: 1-800-999-0001
Vendor’s E-mail: scootersproduce@isp.org.

Item Purchased Spec # Quantity Ordered Quoted Price Extended Price

1.bananas 81 30 lb. 0.44 lb. 13.20

2. parsley 107 4 bunches .80/bunch 3.20
3.oranges 101 3 cases 31.50/case 94.50
4.lemons 35 6 cases 29.20/case 175.20
 5.cabbages 85 2 bags 13.80/bag 27.60
Total 313.70

Order Date: 1/15 Comments: ________________________

Ordered By: Lawrence Go Faxed on 1/15
Received By: ____________________ Transmitted by Lawrence Go
Delivery Instructions: After 1:00 p.m. ________________________

Ordering can be via interne, by telephone or by placing orders in person. Regardless of

communication method it is critical that you prepare a written purchase order because it
serves as a record of what you have decided to buy.
PO should be made in triplicate copies (three copies). One copy goes to the receiving
area for use by the receiving clerk. Management retains one copy for bookkeeping area.
The original is sent to the vendor.
Without PO many things can and usually do, go wrong. Picture illustrates what can
happen without the control of a purchase order. The buyer ordered 100 pounds of beef
tenderloin at 9.50 per pound. The supplier shipped 200 pounds. The receiver, not knowing
what the buyer ordered, signed for 200 pounds, which was the quantity on the invoice.
Without a purchase order, accounting paid the
supplier’s invoice for 200 pounds at 11.00 per
pound. Instead of 9.50 per pound. What do you
think happened to this operation’s standard food
cost? Using a PO for every order that the buyer
places can prevent the lack of control as illustrated.
PO preparation can be simple or complex, but
should always contain the following information:
Purchase Order Information
1. Vendor information
2. Purchase order number
3. Date ordered
4. Delivery date
5. Name of person who placed order
6. Name of person who received order
7. Name of ordered item
8. Item specification #, if appropriate
9. Quantity ordered
10. Quoted price per unit
11. Extension price
 12. Total price of order
13. Delivery instructions
14. Comments
Advantages of a written PO are:
1. Written verification of quoted price
2. Written verification of quantity ordered
3. Written verification of the receipt of all goods ordered
4. Written and special instructions to the receiving clerk as needed
5. Written verification of conformance to product specifications
6. Written authorization to prepare vendor invoice for payment
HOW TO PURCHASE
Once the purchase specifications have been developed and quantities to be purchased
are known, the next step is to determine how to buy these items at the best price. The
best price, is more accurately stated as the lower price that meets the product
specifications of the operation and achieves the long-term goals of both the foodservice
operations and its suppliers.
The following methods used by most restaurants or foodservice operations in purchasing
process.
PURCHASING METHODS COMAPARISON

Competitive Standing One-Stop Cost-Plus Sealed Commissary

Quotes Order Shop Bids
Independent Bakery, Independents Chain Large Chains and
restaurants, coffee, and chains operations foodservice franchised
Primary use

Smaller dairy units such operations

operations products as schools,
hospitals,
governmen
t
Detailed Par Restaurant Purchase Amount Paper
specs stock; specs; 100% of needed for supplies
must Par stock product a period of printed with
Requirements

show line from time, company

manager one usually a logo;
what is purveyor year Purchase
removed 100% of
and supplies
brought
in
 Lowest price Keeps Delivery costs Lowest Lowest bid Efficient;
stock reduced with possible customized
levels one truck price supplies
Pros

even stopping;
Purchasing
on line
Lack of Abuse If supplier is No Delivery Often
specs could by out of item, no competitio times need owned by
lead to delivery backup n between to be parent
Cons

lesser-value person; purveyor; bidders negotiated company of

shipments food supplier may restaurant
cost not offer chain;
goes up lowest prices conflict of
interest

 Competitive quotes --- the buyer completes a market quotation sheet with the
items and item specifications that the operation needs. This sheet is standardized
form that is given to two or more suppliers who are then asked to provide a price
quote for the items needed. The quotes, which are the prices cited by a purveyor
for a specific product, are analyzed, and the order is placed with the chosen
supplier. If specifications is used, then the lowest price would be the best value, as
all suppliers are bidding on an identical product.
 Standing order – in this method, the restaurant or foodservice operation
establishes a par stock for each item. A par stock is the level must be continually
in stock from one delivery to the next. To determine a par stock level the following
steps:
1. Determine the amount of time between deliveries (i.e. weekly, bimonthly
or monthly)
2. Determine the estimated amount used during this period. This should be
done for each item in the storeroom.
3. Add a safety factor to this amount to cover any unexpected sharp
increases in business or to cover the possibility of a stock-out from the
supplier.
4. Add the estimated amount of product used and safety factor together to
get the par stock of that item.
PURCHASING ETHICS
Ethics is defined as the choice of proper conduct made by individuals in their
relationships with others. Ethics come into play in purchasing foodservice products
because of the tendency for some suppliers to seek an unfair advantage over their
competition by providing "personal” favors to buyers. These favors can range from small
holiday gifts given in appreciation for another year’s business to outright offers of cash
bribes or kickbacks to the buyer in exchange for volume purchases.
ETHICAL GUIDELINES
1. Is it legal? Any course of action that violates written law or company policy and
procedure is wrong.
2. Does it hurt anyone? Are benefits that rightly belong to the owner of the business
accruing to the buyer? Discounts, rebates, and free products are the property of
the business, not the buyer.
3. Am I being honest? Is the activity one that you can comfortably say reflects well in
your integrity as a professional, or will the activity actually diminish your reputation
with other suppliers?
4. Would I care if it happened to me? If you owned the business, would you be in
favor of your buyer behaving in the manner you are considering? If you owned
multiple units, would it be good for the business if all of your buyers followed the
considered course of action?
5. Does it compromise my freedom as a buyer? If your action negatively influences
the way you perform as a buyer, then you should not do it. For example, you accept
a gift from a supplier provides you poor service. Will you feel comfortable
reprimanding the supplier even though he has given you a gift? If you do feel
uncomfortable, then maybe you should not accept the gift.
6. Would I publicize my action? A quick way to review the ethical merit of a situation
is to consider whom you would tell about it. If you are comfortable telling your boss
and your other suppliers about the considered course of action, it is likely ethical.
If you would prefer that your actions go undetected, you are probably on shaky
ethical ground. If you would not want your action to be read aloud in a court of law
(even if your action is legal), you probably should not do it.
What To Pay: AP Price vs. EP Cost
Many buyers in the restaurant and foodservice industry select a purchasing method
based on price alone. It is human nature to want to buy goods at the lowest price, it is
good idea if the product purchased matches the product specification. For example, you
are purchasing ground beef for a standardized recipe requiring 80/20 (80 percent lean,
20 percent fat) ground beef. Buying ground beef at the lowest price could result in
purchasing 70/30 ground beef. While the price would be low, the quality and yield would
not meet the specification. It is important to distinguish between the costs on a per serving
basis and the costs as purchased, because product waste is not accounted for in the as
purchased (AP) price and can increase the per serving cost.
Another way of selecting a purchasing method is to look for the best price edible portion
(EP) cost. Suppliers quote AP prices and paying this price might be fine for some items.
Since most products have less than 100% yield, calculating the EP cost will enable you
to more accurately determine which supplier’s is best for the needs. There are two steps
in calculating EP cost. First, calculate the product’s yield percentage. Yield percentage
is the EP weight divided by the AP weight. To determine the products yield percentage,
two methods can be used. A yield chart is a register that gives the EP weight of products
as opposed to the AP weight
The second method is to conduct a yield test. Yield test is an analysis done in an
operation to determine the difference between a products AP weight and its EP weight.
To calculate a yield percentage, weight the product when it arrives. The result is the AP
weight. The first thing to do is to clean, trim, and put the product into the form called for
in the recipe (i.e. slice ,dice, cut) and then weigh the product again. The result is the EP
weight. Divide the EP weight by the AP weight to get the edible portion percentage (EP
percent) or product yield percentage.
EP weight / AP weight = EP%
The second step in calculating EP cost is to divide the AP price by the product yiel
percentage.
AP price / EP% = EP cost
Example, a case of iceberg lettuce weighs 30 pounds and costs 25.50. the lettuce is
washed, its outer leaves and core are removed, and it is shredded as called for in the
recipe. The lettuce is weighed again. The weight now is 24 pounds. The EP cost for 30
pounds of usable lettuce is:
24 / 30 = 0.80 or 80%
25.50 / 0.80 = 31.88
The cost per pound of the lettuce is 0.85 AP (25.50/30) or 1.06 EP (31.88/30). The cost
per ounce is 0.05 AP (.85/16) 0r 0.07 EP (1.06/16).

WHEN TO PURCHASE
One of the controls in purchasing is when, or how often to purchase. It takes time to
receive bids, complete purchase orders, phone in or electronically transmit orders,
receive the goods, store the goods and pay the invoices.
Less frequent orders would be best for the organization. However, this is not always true
for two reasons. First, with fewer orders being placed, the inventory level must be higher.
High levels of inventory tie up the organization’s cash flow. Others are the cost of the
storage space. Storage space costs money to build and may take space away from other
functional areas such as dining space. Another cost to build storage space is the
maintenance, some storage such as cold storage requires cooling and ventilation
equipment that runs on electricity that increases the utility costs. Second, not all of the
goods purchased lend themselves to being stored for any length of time. To optimize the
timing of purchases, goods are broken down into two categories:
  Perishable goods are products that have a relatively short shelf life – usually one
to three days. Some might last a few days longer, but their quality and yield would
be considerably diminished. It should be purchased as often as possible.

 Nonperishable goods are products that have a relatively longer shelf life. It can
last for a few months to a year if stored and handled properly. It should be
purchased as seldom as possible for reasons previously given. The size of the
storage area, the operations cash flow and location are all factors that the buyer
must consider when determining how often to order. Some purchase by weekly,
bimonthly and others monthly.

Perishable Quantity to Purchase

To keep the products as fresh, only the amount needed should be purchased. Therefore,
it is necessary to take inventory each time perishables are ordered. Bid sheet is necessary
to facilitate this process. A bid sheet is a listing of items needed and is used to get price
quotes from suppliers. The following steps in determining the amount to purchase:
1. Determine the amount of product needed until the next delivery.
2. Inventory what is on hand.
3. Subtract what is on hand from the amount needed.
4. The result of this calculation is the amount to purchase.
Following this method the operation is assured of having only the fresh product available
for service to the customer.
Another method of purchasing specific types of perishables is the standing order. This
method is quite satisfactory as long as the supplier removes the unused stock and gives
proper credit. If proper stock rotation does not occur, use of product that is not fresh as
it should be, which could result in dissatisfied customers. This has an advantage of saving
management time, but should be used only if the supplier agrees to give credit for excess
inventory.
Nonperishable Quantity to Purchase: the Par Stock Method
The most common method used for determining the quantity of nonperishables to
purchase is the par stock method. The key to this method is assigning to every item in
the storeroom a level that should be constantly on hand. When it is time to order, inventory
the item and subtract that number from the par stock number. The resulting number is the
amount to order.
For example, a restaurant famous for its fried chicken serves green beans seasoned with
smoked ham chunks and onion as one of its side dishes. It uses one case of canned
green beans each day, except on Saturday and Sunday when it uses two cases a day.
Therefore, its usage is nine cases a week. Management has decided to add a safety
factor of three cases. Consequently, its par stock for green beans is twelve cases. The
restaurant receives a grocery delivery weekly. When the manager orders, he or she
subtracts inventory from par stock for each item that needs to be ordered. When taking
inventory of the green beans, the manager finds four cases on the shelf. The manager
subtracts four (stock on hand) from twelve (par stock) and orders eight cases of green
beans.
AP Amount versus EP Amount
To determine the AP amount to purchase, divide the EP amount needed by the yield
percentage.
EP amount needed / Yield percentage = AP amount
For example, the chef tells the buyer that she needs 50 pounds of cauliflower ready to
use. The buyer looks up the yield of cauliflower and finds its yield percent is 55 percent.
The buyer purchases 91 pounds of cauliflower.
50 pounds needed / 55% or .55 = 90.9 pounds
BUTCHER TEST
The butcher test is a process in which a wholesale cut of meat is broken down into a
retail cut and the trim, bone, and waste are analyzed and recorded to arrive at an EP cost
for the retail cut. When breaking down a wholesale cut, there is some loss. Depending on
the cut, the loss could be considerable, while sometimes it is small. Some of the loss is
usable, such as bones and trimmings for the stockpot, small cuts for stew or soups, or
scraps for grinding. This loss can have value to the operation. Some of the other loss is
not usable and therefore has no value.
Example of a butcher test on beef tenderloin :
Item Beef tebderloin Weight Lb 8 oz 0
Used for Steaks Portion 8 oz
Price AP 10.00 per pound Total price 80.00
Supplier Bridgeport Meat Packig Co. Date 02/20/20

Trim Breakdown Weight Market Value Total Value

Fat/silver skin 1 lb 6 oz 0 0
Tenderloin strips 1 lb 12 oz 7.00 12.25
Ground beef 6 oz 1.75 0.66

Total 3 lb 8 oz Total 12.91

--------------------------------------------------------------------------------------------------------------------
Weight AP 8 lb 0 oz Total price AP 80.00
Less : trim weight 3 lb 8 oz Trim total 12.91
Yield of item 4 lb 8 oz Net price 67.09

Net price / Yield of item = Cost per pound

67.09 / 4 lb 8 oz or 4.5 lb = 14.91

CATERING PURCHASES
Restaurant and foodservice operations that cater one-time special events, such as
banquets need to purchase items specifically for that occasion. To calculate how much
product to purchase, the caterer must know the menu, portion size, number of guests and
the product yield. He steps to be followed in calculating the purchasing quantity:
1. Determine the number of servings per purchasing unit (SPU) by dividing the
purchasing unit by the portion size. The purchasing unit and the portion size must
be in the same unit of measure. For example, if the portion size is in ounces, the
purchasing unit must be in ounces.

Purchasing unit / portion size = servings per purchasing unit (SPU)

2. Determine the purchase factor (PF) by multiplying the SPU by the edible portion
yield percent (EP %).

SPU x EP% = purchase factor (PF)

3. Determine the amount to purchase by dividing the number of guests by the

purchasing factor (PF).

Number of guests / PF = amount to purchase

For example, a catering company is going to serve 350 guests a 6 ounce portion of roast
round of beef. The yield on a top round is 75 percent, including cooking loss. The
purchasing unit is 16 ounces.
16 oz / 6 oz = 2.67
2.67 X .75 = 2.00
350 / 2.00 = 175 pounds of top round to purchase
If the caterer also were to serve three ounces of fresh sugar snap peas with a yield of
95%, the amount to purchase would be calculated as follows:
16 oz / 3 oz = 5.33
 5.33 x .95 = 5.06
350 / 5.06 = 69.17 (round to 70) pounds of sugar snap peas
to purchase

PURCHASING BEVERAGES
In the area of alcoholic beverage products, several levels of equality and packaging
format are generally chosen. This ensures that a beverage product is available for those
guess who wish to purchase the very best and a product is also offered for those guests
who spend less. Thus, the beverage buyer is faced with deciding not only whether, for
example, to carry wine on the menu but also how many different kinds of wine and their
equality levels.
WINE PRCHASING
Determining which wines to buy is a matter of selecting both the right product and
packaging form for your operation’s needs. To do so, you must determine if you will sell
wine by the glass:
1. Glass
2. Split or half-bottle
3. Carafe
4. Bottle
Wines sold by the glass or carafe can be served from bottles opened specifically for tat
purpose or they can be drawn from specially boxed wine containers. Wines in a box
typically are house wines sold to the beverage manager in milliliter-sized boxes to ease
handling, speed and service and to reduce packaging costs.in addition, you may find that
you must purchase specific wines for cooking. These products will be secured from your
beverage wholesaler rather than your grocery wholesaler.
As a manager, you will build a wine list, the tem used to describe your menu of wine
offerings selected for our own particular operation and guest expectations. Example of a
wine list.
Sparkling Wine and Champagne Price per glass/
Price per bottle
101 Gloria Ferrer, Brut, Sonoma Country 7.00/26.00
102 Pommery, Reims, Fance 43.00
Chardonnary
201 Kendall-Jackson, California 5.00/20.00
202 Camelot, California 6.00/22.00
Cabernet Sauvignon
301 Tessera, California 5.00/20.00
 302 Sebastiani Cask, Sonoma 35.00

Each category of wines is then numbered as follows: 100s for sparkling wine and
champagne, 200s for white wines and 300s for red wines. The numbering is used to assist
the guest and to help the server identify the correct wine in storage. Some guests
sometimes feel intimidated by the French, Italian or German names of wines and might
not order for fear of pronouncing the words incorrectly. This numbering allows the guest
to choose a number rather than a name.
The second column lists the name and place of the vintner, or wine produce. The third
column lists the price by the glass/or the price per bottle
In wine list development, points must be kept in mind. First, seek to provide alternatives
for the guest who wants the best, as well as the guest who prefers to spend less. Second,
wines that ether complement the food or in the case of a bar are popular with the guests
must be available. Avoid the temptation to offer too many wines on a wine list. Third, wine
sales can be diminished due to the complexity of the product itself.
RECEIVING FOOD AND BEVERAGE PRODUCTS
After PO had been made, the buyer sends the PO to the supplier and a copy to the
receiving clerk. The receiving clerk ,who performs this function, receives the items, notes
on the purchase order what the supplier delivered and forwards the PO to the accounting.
Accounting then compares the PO to the supplier’s invoice, a bill that accompanies the
delivery of goods to determine the correct amount to pay the supplier.
Proper receiving is important, because this an area where the quality and quantity of the
products ordered. There are four requirements for effective receiving:
1. Proper location. The backdoor which is the most used for receiving and it must be
adequate to handle the job of receiving or product loss and inconsistency will
result.

First, the receiving area must be large enough to allow for checking products
delivered against both the delivery invoice, which is the sellers record of what is
being delivered, and the PO, the buyers record of what is ordered. A location near
refrigerated storage areas is desirable for maintaining deliveries of refrigerated and
frozen products at their optimal temperatures.

Second, must be free of trash and clutter, for easy to hide delivered food items that
may be taken home at the end of a dishonest employee’s shift. It is important that
the receiving clerk work in area that has clear view of delivery personnel and their
vehicles.
 Third, it must be kept extremely clean to avoid contamination of the incoming food
or provide a carrying vehicle for pests. A clean receiving area makes it easier to
both to prevent and detect this type of problem. Properly lit and ventilated.

Fourth, flooring should be light in color and of a type that is easily cleaned.

PROPER TOOLS AND EQUIPMENT

1. Scales should be of two types: those accurate to the fraction of a pound (for
large items) and those accurate to the fraction of an ounce (for smaller items
and pre-portioned meats). Scales should be calibrated (adjusted) regularly to
ensure their accuracy.
2. Wheeled equipment: these items, whether hand trucks or carts, should be
available so that goods can be moved quickly and efficiently to their proper
storage areas.
3. Box cutters: allow the receiving clerk to quickly remove excess packaging and
thus accurately verify the quality of delivered products.
4. Thermometers: foods must be delivered at their proper storage temperatures.
5. Calculator: vendors calculations should always be checked, especially if the
invoice has been prepared by hand. It must be available in case the original
invoice is either increased or decreased in amount because of incorrect vendor
pricing or because items listed on the invoice were not delivered.
PROPER DELIVERY SCHEDULE
Ideally, accept the delivery of products only during the hours you choose. These times
would likely be during slow periods, when there would be plenty of time for a thorough
checking of the products delivered. Some operators scheduled the deliveries, say
between 9:00 A.M. and 10:30 A.M. These are called acceptance hours. The operation
may refuse to accept the delivery of products at any other time. Some large operations
prefer to establish times in which they will not accept deliveries, say between 11:00 a.m.
and 1:00 p.m. These are called refusal hours.
Receiving personnel should be properly trained. There are four key characteristics of
delivered items:
1. Weight
When an item Is ordered by weight, its delivery should be verified by weight.
2. Quantity
If you order five cases of Scotch, of course you want to receive and pay for five
cases. For two reasons, fist, you only want to pay for products that have been
delivered. Second, if you prepared your PO correctly, you truly need five cases of
scotch.
Shorting is the term used in the industry to indicate that an orders item has not
been delivered as requested. When a vendor shorts the delivery of an item you
 ordered, that item may or may not appear on the delivery invoice. If it does not
appear, it must be noted so that management knows that the item is missing and
appropriate reorder be taken.
If the item is listed on the delivery invoice, the delivery driver should sign a credit
memo. A credit memo indicates an adjustment to a delivery invoice and it should
be in triplicate copies. One copy is retained in the receiving area to be filed.
Management retains one copy for proper bill payment. The original is sent to the
vendor.
3. Quality
Product specification is very important for verification of quality so that the
receiving staff insures of the quality level is met.
When receiving beverage products, the following items are of special concern and
should be verified;
1. Correct brand
2. Correct bottle size
3. No broken bottles or bottles seals
4. Pull dates (beer)
5. Correct vintage or year produced (wine)
6. Correct unit price
7. Correct price extension
8. Correct invoice total
4. Price
To verify proper pricing, two major concerns be addresses:
1. Matching PO unit price to delivery invoice unit price
2. Verifying price extensions and total
Exercises
A. Give at least five (5) examples of perishable and nonperishable goods and explain
why they are categorized as perishable and nonperishable.
Assessment
A. Calculate the Amount to Purchase in Catering Services

1. You are serving a 4-ounce portion of an item to 750 guests. The item has an edible portion
yield of 55%. How many pounds should you purchase?
B. Butcher Test for Turkey

Complete the following butcher test problem. Fill in the blanks that will complete
the test.

Item Turkey breast Weight lb 5 oz 0

Used for Turkey sandwiches Portion 3 oz
Cost AP 1.45 per pound Total cost
Supplier Chicks’s chicken Date 09/12/21

Trim Breakdown Weight Market Value Total Value

Fat, skin 8 oz 0.04 0.02
Bone 1 lb 10 oz 0.05 0.08

Total 2 lb 2 oz Total 0.10

Weight AP ____________________________ Total cost AP _______________

Less: trim weight_______________________ Trim total __________________
Yield of item___________________________ Net cost __________________
Net cost / Yield item = Cost per pound EP
Reflective Analysis
How will you use what you have learned here in the near future?

References

3G E-Learning (2017). The Restaurant: From Concept to Operation. USA: 3G E-Learning

LLC.

This ends your module in Food Service Management. Congratulations! You did a great job!
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