Receiving, Storing, and Issuing Chapter 8. Objectives Evaluate the receiving process Explain the use of a product specification reference guide and the.

Receiving, Storing, and Issuing

Chapter 8

Objectives

• Evaluate the receiving process

• Explain the use of a product specification reference guide and the buyer’s order form

• Describe product inspections, discrepancies, product rejections, and credit memos

Objectives (cont’d.)

• Summarize the storing process

• Define formal and informal issuing

• Describe the use of storeroom requisitions and purchase requisitions

• Explain the differences between a physical inventory and a perpetual inventory

Objectives (cont’d.)

• Identify the hardware and software used with computerized inventory systems

• Describe the methods used to determine inventory valuation

• Apply the use of ingredient rooms as they relate to inventory management

The Receiving Process

• Operator can exercise greatest control at the receiving dock– Where the financial, physical, and legal

responsibility for product is transferred

• Receiving department verifies the order– The three “Q’s” of receiving: quality,

quantity. and quote

Product Inspections

• When setting receiving dock hours– Consider kitchen needs and when

receiving personnel are available– Exceptions may need to be made

• Conduct efficient, thorough inspections of all products– Specification, quality, and quantity

Product Inspections (cont’d.)

• Reviewing specifications and orders– Verify delivered goods were ordered– Blind receiving

• Receiving clerk counts and weighs everything

– Key stop (drop stop) occurs without receiving clerk present

Product Inspections (cont’d.)

• Inspecting the quality– Chef must train the receiving clerk– Factors: freshness, color, size, consistency,

and taste

• Inspecting the quantity– Products must be counted or weighed– Weight tags used to record weight of large

cuts of fish or meat

Product Discrepancies

• Mistakes can occur in the quality, weight, or count of delivered items– Chefs and clerks have right to reject

inferior product• Most vendors have credit agreement in place• Credit memo should be issued• Make sure bookkeeper knows credit is

expected for that invoice

Maintaining Statement Files

• Receiving clerk should file a copy of vendor’s signed delivery statement– Attach original order form, if required– Send original to bookkeeper for payment

• Keep a separate file for each vendor

• Validate monthly invoice totals against delivery statements for accuracy

The Storing Process

• Delivered products must be stored immediately

• Money can be lost in storing process– Carrying excessive inventory– Improper handling of perishables– Product deterioration or inaccurate

bookkeeping

Inventory Management

• Process of controlling inventory volume until it is to be issued

• Consider shelf life– Good food is a financial loss if left to spoil

• Informal systems of control– Check sheets used by employee when

items are removed from stockroom

Inventory Management (cont’d.)

• Formal systems of control– Consists of a system for tracking issues– Must have staff to do this– Employed by larger food service

operations

• A system to determine when and how much product to order is needed

Inventory Management (cont’d.)

• ABC analysis– Greatest cost or volume items are given

highest priority

• Par stock method– Kitchen storeroom containing partial stock

• Mini-max method (safety stock)– Establish min and max inventory levels

Inventory Management (cont’d.)

• The Levinson approach– Buyer must closely approximate product to

be used between deliveries– Then calculate the amount to order

• Economic order quantity– Costs associated with receiving, stocking,

and inventory control reduced with infrequent ordering

Conducting Inventories

• Physical inventories are done in the storeroom or cooler– Requires complete accounting of all items

• Perpetual (virtual) inventory– Count of stock that is supposed to be on

the shelves in the storeroom• Allows physical inventory to be taken less

frequently

Inventory Record Systems

• Storeroom inventory database should contain:– Stock item number– Storage location code– Product description and specifications– Approved brand names and suppliers– Inventory information, and more

Valuing Inventory

• Business must determine a method for valuing their inventory– Inventory valuation systems include FIFO

(first in, first out), LIFO (last in, first out), weighted average, actual cost, and latest purchase price

• Valuation method should be used consistently

Fixed Asset Inventory

• Some companies create methods for tracking their fixed assets– Fixed assets include computers, office

equipment, vehicles, and furniture– Bar codes may be used

• Or determination made by weight or storage area that holds a predefined number of items

The Issuing Process

• Food assets must be issued into production in order to earn a profit for the business

• One of two methods is used– Informal issuing– Formal issuing

Informal Issuing

• Storeroom is open to the kitchen staff– Free to enter when supplies are needed– Room is subject to theft if not properly

controlled

• No ability to separate costs– If multiple retail outlets use same

storeroom

Formal Issuing

• Buyer purchases goods on behalf of all outlets and issues them at cost to each individual outlet– Process of releasing items controlled by

requisition– Immediate information on daily food cost

by revenue center is available

Direct Issues

• Products issued immediately into production from the receiving dock– Should be recorded in storeroom’s

inventory for recordkeeping purposes– Expenditure must be charged to the cost

center to which it is issued

• Product requisitions are forms used to identify foods needed by the chef

Direct Issues (cont’d.)

• Purchase requisitions are internal documents used:– In businesses that have formal storeroom

operations– For special equipment that is needed

Summary

• At the receiving dock, product is inspected for quality, quantity and whether it meets the order specification

• There are a variety of inventory management systems to choose from

• There are formal and informal ways of managing storeroom inventory