Chapter 5

1. A purchase specification is defined as a listing of all the criteria for ingredients and supplies, while a
purchase specification includes all of the information about receiving the production into the Establishment.

2. Due to the fact, that during production a percent of the product is lost, thus at the end a higher amount of
food must be ordered I order to get the needed amount.

3.
Advantage:
Generally lower prices per dollar Volume
Do not have to get quotes
Disadvantage:
Only one relationship with a supplier
Who determines the cost? Creates a need to negotiate the prices costing time and effort

4. Due to the fact, that in order to Calculate the appropriate amount needed to be ordered, one must know
must know, how much food is lost during the production.

5. Due to the fact, that it is needed to calculate, how much product needs to be ordered and to calculate the
needed amount of food for production.

6.
Calculation utilising the forumla: EP=AP x Yield percent
Looking it up Online
Ordering , producing and then measuring the product yourself

7.
Needed Amount to be eaten by the guests:

EP=800 oz or 50 pounds

Needed amount to be Purchased:

AP=800/0,6=1333,33 oz or 83,33 pounds

8. EP=( 83,33 x 0,75) / 50 = 1,25 $

9. Needed amount of EP:

EP= 6 x 100= 600 oz or 37,5 pounds or 4,5 Gallons

Needed amount to be pruchased

AP=600 / 0,95= 570 oz or 35,63 pounds or 4,27 gallons

10.

EP= ( 14 x 4,5) / 4,27 = 14,8 $

11.

EP= 1 x 0,75 = 0,75 pounds

EP= ( 0,40 x 1) / 0, 75 = 0,53 $

12.

Item Serving Amount of Needed EP EP % Price per Needed AP Cost

size People portion
Steak 10 oz 171 1710 85 % 5,78 $ 2011,76 715,22 $
oz(123,74
Pounds)
Mashed 4 oz 171 684 75 % 0,29 $ 912 oz ( 76 22,04 $
Potatoes Pounds )
Green 4 oz 171 684 81 % 0,89 $ 844,4 oz 62,66 $
Beans ( 70,4
Pounds )

Total: 799,92 $

FC= ( 799,92 x 100) / 17,5

FC= 4570,97 $

13.
Quality Standart Must be Established for the needed Production in order to Get a consistent product and
thus a consistent service and product specification does exactly this.

14.

Open Bid: An offer is sent to a collection of companies, which after proceed to compete with varying
offertas following this the Purchaser is Free to choose a single Provider or mix and match.

Sealed Bid; Specificatuins are sent to suppliers, but no competition takes place, the buyer after receivinb the
offers in secret chooses the best option.

Cost Plus: The Buyers agree with each other mano-o mano, on the price. No other Parties are involved.

Co-op: Small businesses bond together and form a Legal person, afrer which they can use there collective
Purchasing power to negotiate and receive better prices, as the purchasing amounts are increased.

One stop: Simply Purchasing everything fron one source, that can Supply everything, the the establishment
requires for operation.

Warehouse buying: Simply buying the needed product at a warehouse and then lugging them back to your
establishment.

Standing / Standart order: Is when an agrreement is made with the supplier to either have the same order
on the same weekday or to have the supplier to fill up the stock to a certain level upon the delivery day.

Online Purchasing: Utilisation of a online purchase plan,which allows to send specification for anyone
connected to the system and allow for real time bidding.

15.

It is a list with all the Products Utilised by the Establishment and what it has on hand. The sheets have a
column , that Includes the required amount and a place to put the Bids of atleast 3 suppliers, after which the
buyer can compare and choose the best price.
16. In Periodic order metthod the order dates are set, what changes is the order amounts. In the case of
Perpetual ordering method the quantity of ordered products remains the same, while the order date changes.

17. In the case of perpetual inventory method, the products are counted as an on-going, theoretical count of
what should be in the Inventory. Where as in the case of the physical invetory method, the product is
physically counted.

18.

(4 x 14 ) + 12-8= 60

60 cans must be ordered

19.

(3 x 14) + 6 -5= 43

Either order 7 or 8 Packages According to preference or storage availability.

20.

Ordering Point: 8+ ( 8 x 0,25) = 10

43-10= 33

33+8= 41 ordering amount

21.

100-12=88

88+6=94

94 / 4 = 23,5 or Aprox 24 Units needed

22.

28+6=34

34- 10= 24 Unit ordering amount

23.

Since The orderd are made in cases:

8 x 24 = 192 Real Max Capacity

192 / 24 = 8

Since The daily usage is close to single case and the leftover chicken can be placed within a spare crate:

21/24 = 0,87 = 1 Ordering Point

8-1= 7

7+1 = 8 Cases are Needed to be ordered.