HBM 131 1st Edition Lecture 26Outline of Last Lecture:I. Group PresentationsA. Proprietorships B. OwnershipsOutline of Current Lecture:I. Affiliates Current Lecture:I. Affiliates A. Vendor Relations1. Price2. Quality3. Consistency of product, delivery 4. Delivery Dates and timesB. The objectives of purchasing 1. Maintain adequate supply2. Maintain quality standards3. Minimize investment4. Maintain an operations competitive position 5. Obtain the lowest possible EP or AS price (edible portion or as serviced price)C. Purchasing has a direct impact on the following1. Availability of items for sale2. Type and quality of the operations products 3. Available funds an operation has on hand4. Profitability and competitive position of an operation D. Inventory and Purchasing 1. Allows control of products so you can measure your operation against standards and goals. 2. When variances are discovered action can be taken to eliminate, or exploit those variances. E. Purchasing Objective # 1 Maintain Adequate supply1. Customer count history (covers)2. Popularity index of items sold (PMIX)3. Vendor delivery schedules4. Availability of items from vendors5. Analysis of outside influences that might affect an operation, such as conventions festivals, and weather forecastF. Purchasing Objective #2 Maintain Quality Standards1. Following the operation’s established quality standards for each item or service when purchasing. (Specification sheets)2. Clearly communicating these standards to potential vendors. G. Purchasing Objective #3 Minimize Investment1. Customer count forecast 2. Anticipated cash needs for a given period3. Availability of storage for products 4. The forecasted future costs of items purchased H. Purchasing Objective #4 Maintain an Operation’s Competitive Position 1. Choose vendors who will provide the combination of price and service for the operations needs2. Concentrate on obtaining the lowest possible edible portion price (the cost of an item after all trimming and fabrication but before cooking)3. Or, “AS” as served price (the cost of an item as it is served to the customer)I. Purchasing Objective #5 Obtain Lowest EP or AS Price1. Operations must focus on the true cost of each item as it is served, not the as purchased “AP” price, (which is the price of an item before all trimming, and fabrication, and cooking)2. What is the difference? If you buy it cheaper shouldn’t it be cheaper when it hits the plate?-Think of Yields, quality waste etc. J. The Make or Buy Decision 1. Make or buy analysis is done to discover the proper balance in food production, yielding the best possible outcome to satisfy the quality standards set for the operation...2. Value added products: proportioned and processed food items. In many cases, the cost incurred for paying a premium price attached to a value added products is offset by other overhead involved in running the operation K. The Make or Buy Decision 1. To Buy: consistency, cost effectiveness, time effectiveness, space saving2. Or not to Buy: Value added must grader than cost added, signature sauces and styles, generally the food’s cost will be lower, the nutritional value higher, fewer additivesL. Associations and Organizations1. WSRA2. NRA3. ACF4. Lodging associations5. NRA Oct. Report M. Certification and Educational Programs that educate and prepare people for the hospitality Industry and the trade journals that keep us abreast of the industry 1. Serv Safe2. Spot Check3. Nations Restaurant
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