Principles of Purchasing Goods

Purpose of purchasing

Ensures a business has the right goods available at the right time to meet customer and operational needs.

The Six Rs of Purchasing

Right quality, right quantity, right time, right source, right price, and right place.

FIFO (First-In, First-Out)

Using older stock before newer deliveries to prevent spoilage and maintain freshness.

Par stock levels

Maintaining a minimum level of goods to meet operational needs without overstocking.

Hidden costs of purchasing

Includes delivery, storage, shelf life and waste, supplier reliability, and cost per serve.

Supplier compliance requirements

Suppliers must have an ABN, follow a food safety plan (FSP), and comply with WHS and food safety standards.

Consequences of poor purchasing

Customer dissatisfaction, increased costs, and inefficiencies in production and service.