Quantity food production - exam 3

ABC inventory method

Effort, time, and money for inventory control should be allocated among products

according to their value

Approved brand specification

Specification that indicates quality by specifying a brand name or label.

Bid

A price quotation from seller.

Bid buying

Buyer decides which supplier will be chosen for the order based on bids submitted from the

seller

Broker

Independent sales and marketing representative who contracts with manufacturers, processors, or prime-source

producers to sell and conduct local marketing programs with wholesalers, suppliers, or foodservice operations

Code of ethics

Set of rules for standards of professional practice or

behavior established by a group

Cost center

Department that has expenses but does not generate profits to cover those expenses

Distributor

Wholesaler responsible for transferring products from the processor or manufacturer to the

supplier

Economic order quantity (EOQ)

Derived from a sensible balance of ordering cost and inventory holding cost

Ethics

Principles of conduct governing an individual or business

F.O.B.

free on board

F.O.B. destination

Buyer pays freight charges, but seller owns

product during transit

F.O.B. origin

Buyer selects freight company, pays freight charges, and

owns product during transit

FIFO

first in, first out

Genetically engineered foods

Food whose genetic structure has been altered by adding or eliminating genes to enhance qualities of the product. Also known as genetically modified

organisms (GMOs)

Inventory turnover

this calculation provides an indicator of the ability of the operation to control the amount of product held in inventory; the

formula for inventory turnover is food cost/ average food inventory

Invoice

Document prepared by the supplier that includes product name,

quantity, and price

Irradiation

Exposure of foods to gamma rays or radiant energy to

reduce harmful bacteria

Just-in-time (JIT) purchasing

Purchasing products just in time for production and immediate consumption by customers without

having to record them in inventory

Law of agency

Buyer’s authority to act for the organization, the obligation each owes the other, and the extent to which each may be

held liable for the other’s actions

Law of contract

Signed agreement between two or more parties related to the purchase of a product or

service

Law of warranty

Guarantee by the supplier that an item will perform in a

specified way

LIFO

last in, first out

Manufacturer’s representative

Distributor who represents a manufacturing company and informs suppliers of products by this

manufacturer

Market

The medium through which a change in ownership moves commodities from producer to

consumer

Minimum-Maximum Method

Method for controlling inventory involving the establishment of minimum and

maximum inventory levels

Performance specification

Specification that indicates quality by functioning characteristics of the

product

Perpetual inventory

Purchases and issues continuously are recorded for each product in storage, making the

balance in stock available at all times

Physical inventory

Periodic actual counting and recording of products in

stock in all storage areas

Processor

Organization that takes raw food items and transforms them into packaged products for sale to

consumers or foodservice operations

Producer

Someone who produces raw food to sell.

Profit center

Department that generates revenues greater than its expenses and creates profit for the

organization

Purchase order

Document completed by the buyer and given to the supplier

listing items to be purchased

Purchasing

Activity concerned with the acquisition of products

Receiving

Activity for ensuring that products delivered by suppliers are

those that were ordered

Requisition

Form used by foodservice manager to request items from

purchasing manager or department

Specification

Statement understood by buyers and suppliers of the required quality of products, including

allowable limits of tolerance

Standards of fill

Tell the packer how full a container must be to avoid the charge of deception.

Standards of identity

Federal standards that identify what a given

food product contains

Standards of quality

Federal standards for product quality attributes such as tenderness, color,

and freedom from defects

Storage

Holding of products under proper conditions to ensure quality until

time of use

Supplier

Organization that offers products for sale

Technical specification

Specification that indicates quality by objective and

impartial test results

Universal Product Code (UPC)

System for uniquely identifying products that consists of a rectangular box with vertical lines of various widths.

Value

The result of the relationship between the price paid for a particular item and its utility in the

function it fulfills

Value analysis

Methodical investigation of all components of an existing product or service with the goal of discovering and eliminating unnecessary costs without

interfering with the effectiveness of the product or service

Wholesaler

Distributor that purchases from various manufacturers or processors, provides storage, sells, and delivers products to suppliers

– Full Wholesalers

– Special Breed Distributors

– Wholesale Clubs

inventory Control Tools

– ABC Method

– Mini-Max Method

– Economic Order Quantity Method

– Inventory Valuation Methods

Elements of the Receiving Activity

• Competent Personnel

• Facilities & Equipment

• Specifications

• Critical Control in

Receiving

• Sanitation

• Adequate Supervision

• Scheduled Hours

• Security

Purchase Order

• Format

• Required Number of Copies

• Shipping Terms

• Invoice

Purchase Requisition

– Requisition Number

– Delivery Date

– Budget Account Number

– Quantity Needed

– Description of the Item

Stages of Supplier Selection & Evaluation

• Survey Stage

• Inquiry Stage

• Supplier Performance Evaluation

Goals of JIT Purchasing

• Secure a steady flow of raw materials

• Reduce the lead time required for ordering a product

• Reduce the amount of inventory in the storage and

production areas

• Reduce the cost of purchased materials

Buying Methods

– Independent Purchasing

– Centralized Purchasing

– Group Purchasing

– Warehouse Club

– Just-in-Time Purchasing

Skills of Purchasing Managers

• Interpersonal

Communication

• Customer Focus

• Ability to Make Decisions

• Negotiation

• Analytical Ability

• Managing Change

• Conflict Resolution

• Problem Solving

• Influence and Persuasion

• Computer Literacy

Government Regulations

• U.S. Department of Health and Human Services

• U.S. Department of Agriculture

• U.S. Department of Commerce

• Imported Food

FDA Standards

standards of identity, standards of fill, standards of quality

Methods of Purchasing

informal and formal

Law of Warranty

– Express Warranty

– Implied Warranty of Merchantability

– Implied Warranty of Fitness

Law of Contract

• Offer

• Acceptance

• Consideration

• Competent Parties & Legality

Buying Methods

– Independent Purchasing

– Centralized Purchasing

– Group Purchasing

– Warehouse Club

– Just-in-Time Purchasing

Legal Considerations

law of agency, law of warranty, law of contract

Distributors

whole salers, brokers, manufacturers representatives