Unit 3:

Purchasing, Receiving and Storing

Food Purchasing

The purchasing cycle is pivotal to overall business performance, and a firm purchasing policy
is the initial control point of the catering business. Once the menu is planned, number of
activates must occur to bring into the reality. One of the first and most important stages is to
purchase and receive and the materials needed to produce the menu items. Skillful purchasing
with good receiving can do much to maximize the results of good menu. There are six
important steps to remember.

1. Know the market

2. Design the purchase procedures
3. Determine the purchasing needs
4. Receiving and check the goods
5. Establish and use specification
6. Evaluate the purchasing task

Need

Payment

Purchase
Specification
Invoice
Checkin
g
Select
Supplier
Into Stock

Negotiate
Inspectio
nn
Purchase
Order
Delivery

Fig. Purchasing Cycle

CONSIDERATION OF PURCHASING OF GOODS

Prepared by: Raja Ram Mahat, Food Production and control Instructor 1
The factors that could have an impact on the purchasing system and procedures are as follows:

Type of establishment
The type of an establishment will largely govern its purchasing systems and procedures. A free-
standing restaurant serving only a few meals a day would handpick and select commodities and not
necessarily buy in bulk whereas in hospital catering the establishment might go in for commodities
that are approved by dieticians and doctors. Every catering establishment has its own operating
policies designed by the senior management and these are clearly written down.

Style of operation and service

The style of service also determines the kind of purchases required. It is also largely responsible for
creating standard specifications. For example, the cuts of meat for a buffet would be different from
those for a al carte.

Storage space available

The amount of storage space available at a particular establishment can have huge impact on the style
of the purchasing system and procedure. If the establishment has fully equipped dry and could storage
areas, then purchases can be made in bulk and stored to avail the best competitive prices. But if an
operation does not involve storage, as in the case of airline catering, where the emphasis is on fresh
product then the establishment would prefer to make daily purchase.

Geographical location
The geographical location of an establishment can also play a major role in its purchasing system. If
commodity is not available locally it would have to be procured through either international markets
or national markets, depending on the necessity of the commodity.

Financial aspect
Some catering establishments that provide subsidized meals would purchase only seasonal and local
produce as it helps to get good prices and quality. Since the sole purpose of hotels is to earn profits,
each establishment wants something special on their menu as a unique selling proposition, also
commonly known as USP, to help bring in customers and boost sales.

Skills of the employees

The skill set and experience of staff also play a substantial role in the purchasing of goods. If the
employee cannot prepare certain item them self-need to buy from other. For example, if someone
cannot fillet the filet, on most by already filleted fish.

Purchase System and Specifications

Purchasing: Everything in a food operation actually beings with the kind of market that an
operation would cater to. Menus are planned on the basis of the market segment. Once the
menus are planned, all the other requirements such as buying of equipment and other things,
planning and layout of the area are carried out. This function of buying is classified as
purchasing, and in hotels a separate department known as the purchase department carries out
these functions.

Material need to purchase against some standards and such standards are known as
‘specification’. These specifications are made on the basis of the end product and how it is

Prepared by: Raja Ram Mahat, Food Production and control Instructor 2
perceived to be served. Skillful purchasing with good receiving and storage can play a major
role in the bottom line of the establishment. It is often said that one could produce low-
quality food to a high-quality ingredient, but never can produce high-quality food from
substandard ingredient. These are the few factors or procedure that one has to be aware of
before carrying out the purchase functions. Once the right market is located, samples are
procured from the supplier and then tests such as for quality and quantity are done to narrow
these down in a document known as Standard Purchase Specification. Such format can differ
from one establishment to another.

Standard Purchase Specification

The standard purchase specifications are documents that are drawn up for every commodity
describing exactly what is required for establishment. These standard purchasing
specifications will assist with the formulation of standard recipes. A water tight specification
is drawn up which, once approved will be referred to every time the item is delivered. It is
statement of various criteria related to quality, grade, weight, size and method of preparation.
Other information given may be variety, maturity, age, color, shape, and so on. A copy of the
standard specification is often given to the supplier and the storekeeper, who are left in no
doubt as to what is needed. These specifications assist in the costing and control procedure.

Commodities that can be specified include the following:

 Grown (primary): Butcher’s meat, fresh fruit, fresh fruits, milk and eggs.
 Manufactured(Secondary): Bakery goods, dairy products
 Processed (Tertiary/ Third): Frozen foods including meat, fish, and fruit and
vegetables, dried foods, canned foods.

It can be seen that any food product can have a specification attached to it. However, the
primary specification focuses on raw materials, ensuring the quality of these commodities.
Without quality at this level, a secondary or tertiary specification is useless. For example, to
specify a frozen apple pie, this product would use:

 A primary specification for apple

 A secondary specification for the pastry
 A tertiary specification for the process (freezing)

But, no matter how good the secondary or tertiary specification, if the apples used in the
beginning are not of a very high quality, the whole product will not of a good quality.

For more perishable items, rather than entering into long-term contract, a daily or monthly
quotation system is more common. This is essentially a short-term contract regularly
reviewed to ensure that a competitive situation is maintained.

Standard Purchase Specification format:

HOTEL ABC

Prepared by: Raja Ram Mahat, Food Production and control Instructor 3
 STANDARD PURCHASE SPECIFICATION:
________________________________
NAME OF THE PRODUCT:_________________________________________
INTENDED USE: ______________ GRADE/QUALITY:
________________________
UNIT: _____________________ PRICE PER UNIT:
_________________________
AVAILABILITY: SEASONAL/ALL THE YEAR
APPERENCE: ___________________ TEXTURE:
__________________________
COLOUR: _____________________ FLAVOUR: __________________________
SIZE & SHAPE: ___________________________________________________
PAKING: __________________ NO.PER KG: ___________________________
ANY OTHER REQUIREMENT: _______________________________________
SIGNARUTE OF PURCHASE OFFICER: DATE:

A few factors or procedures that one has to be aware of before carrying out the purchase functions are
as follows.

Market knowledge
Purchase manager has to know the commodity market as it is a highly volatile market, where products
vary in both quality and pricing. Paying good money does not always ensure quality so need to build
up good relationships with reputed suppliers. Purchase manager has to know where a particular
commodity is grown and what its seasonality as well as legal aspect of purchasing. Market knowledge
also includes conditions of supply and demand, information on the suppliers available in the market,
their reputation and their scale of business.

Determine the kind of purchases

The requirement would largely be perishable commodities which would include vegetables, fruits,
and meat items. Since these items have a limited shelf life, it is important to control the quantity. Non-
perishable food has a comparatively longer shelf life; one could always purchase such food in bulk
and demand a good rate from the supplier.

Specifications
The chef carries out yield tests to determine the specifications of a product. The specifications of a
product could also depend on the usage. E.g. Large volume operation it would be intelligent to buy
large potatoes that are easy to peel and process for volumes.

Designing the process of buying

There are two kinds of buying methods, formal and informal. Informal buying method may vary
according to the market conditions and is done verbally either in person or over telephone through
oral negotiations before ultimately purchasing the product. Such transactions might involve cash
purchases or some suppliers might give a credit period depending on the relationship between the
purchaser and the supplier. Formal buying is a very competitive method of buying, where the user
provides the specifications to the supplier who in tern quotes the price of the product depending on the
specifications. Such buying involves negotiations and filling-up tenders. The suppliers agree to supply
the goods at the agreed rate even when there is a fluctuation in the rate.

Prepared by: Raja Ram Mahat, Food Production and control Instructor 4
Receiving procedures
Check whether the goods received are as per their specifications. Otherwise, the organization might
be paying more for the substandard quality. Chefs constantly check all the food products and reject
any food that is not as per the specifications. The goods are received as per the food safety laws, and
the temperature and the condition of the packaging are given outmost importance. The next step after
receiving goods is the proper storage of the food.

Principles of indenting for volume catering

The basic fundamental of a food operation is to turn a raw food item into an edible product by
applying or extracting heat. The success of any food operation is depend on how the raw
ingredients are procured, processed, cooked, and then served to the customer to generate
profit. If there is a flaw in any one of the steps, it will affect the profit margin of any
organization. Also for volume catering establishments the principles of indenting would be
based on the number of people an establishment is catering to. In volume catering, one has to
look at the menu in totality and only then can he/she write a detailed product list that needs to
be prepared. The basic principles of indenting for volume catering are as follows:

a. Yield of a production:
The yield of a particular commodity has a huge impact on the indenting for volumes.
All the recipes should be updated with the yields, as ingredients are purchased in the
net weight in a recipe and not for the useable weight. Similarly, when a product is
ordered for a particular recipe, the cut listed in the recipe must be strictly followed to
adhere to the cost and quality. Also, if one has to order 20 kg of fish for a party, there
could be various combinations available on the market, such as
i. Twenty pieces of fish each weighting 1 kg
ii. Ten pieces of fish each weighing 2 kg
iii. Two pieces of fish each weighting 10 kg

The procurement of the fish would depend on the usage of the product as well as the
maximum yield that one would get out of the product with regard to costs and quality.
The cheapest item might prove to be expensive if the yield of the product is low.
Some suppliers now even sell pre-portioned meat so that he buyer gets an advantage
and there is a consistency in the product quality and cost.

b. Type of event:
The type of event for which food is required also plays a major role in the indenting
of food. A weeding function would have a huge range of menu catering to up to 1,000
people or sometimes even more. When the variety is more, the quantities consumed
will comparatively less as most of the guests would like to taste most of the varieties.
But in case of a conference menu where the menu is limited, as good judgment based
on experience would determine the right quantity to be produced.
c. Regional influence:

Prepared by: Raja Ram Mahat, Food Production and control Instructor 5
 Regional food also plays an important role in deciding the indenting for a particular
item. People from different region (territory) have their own preference of food. The
type of dish also plays an important part in deciding the quantity to be produced. For
example, batter-fried fish would consumed more than the fish curry and rice, and
similarly the consumption of chicken kebab will be more than chicken curry with
bread or rice.
d. Service style:
The style of service, whether buffet or a` la carte, also determines the indenting and
portion size of a dish. It is easy to predict the quantities for a fixed portion size, but
the challenge arises when food is laid out on a buffet for self- service. In many
institutional catering a buffet is controlled by the catering managers and strict portion
control is exercised over expensive food items, but in hotels, the food on buffet cannot
be controlled.

Receiving of purchase goods

Receiving: It is important to check whether the goods received are as per their specifications.
Otherwise, the organization might be paying more for substandard quality. It is important for
chef to constantly check all the food products and reject any item if is not as per the
specification. The supplier is then given a time to procure the items as per the specifications,
or else hotel can buy the product from the open market charge the same to the supplier. The
items are received as per the food safety laws, and the temperature and the condition of
packaging are given utmost importance. Catering establishment such as airline and hospitals,
have very strict receiving quality standards to control quality and standardization. The next
step after receiving goods is the proper storage of the food.

Document used by receiving department for Store and Purchase: The receiving
department needs to maintain certain document in specific formats in order to help in the
control of goods received and rejected. The receiving department is usually in an area which
is separate from the guest area. The staff entrance into the hotel is also usually near the
receiving area. The following are certain documents that are used:

a. Gate Pass (Returnable): The receiving department issues this document whenever
hotel property is to be taken out from the hotel on a returnable basis. This is mainly
use by the department for outdoor functions or when equipment is taken out for
repairs, etc. Usually, the head of department makes out the gate pass from where the
item is being taken out. Four copies are made first copy goes to security personnel at
the gate, second copy goes to receiving department, third for the person who is taking
the item out of the hotel and fourth copy goes to user department for the records.

b. Gate Pass (Non-returnable): This document use for any item leaving the hotel
which will not be returned to the hotel (premises) e.g., equipment that is being
discarded. Same procedure follows as returnable gate pass. However any item
leaving the hotel premise which is not going to be returned required permission of
general manager, upon which the purchase manager finds a buyer and the gate pass
issue by the receiving department.

Prepared by: Raja Ram Mahat, Food Production and control Instructor 6
 c. Memorandum Invoice: This invoice is made only when the receiving department
does not receive a proper bill for any item received by it. The detail of the received
item, its quantity, and its supplier are entered in the invoice and kept as a record till
the department receives the proper bill. When the bill is received it is matched against
the invoice for the item’s details, quantity, and price.

d. Inspection report: This report is prepared in case the quality of imported items
received by the department does not match the standards specified for the unit. The
item then has to be returned. A detailed explanation of why the item was rejected and
under what conditions it was received needs to be given in the report. Four copies of
the report are made – one copy goes to the purchase department (which then sends it
to the supplier), the second copy goes to the controls department, the third copy is left
with the receiving department, and the fourth copy is sent to the user department.

e. Short supply report: This report is made for perishable items only. Any shortage in
the quantity received from the supplier due to miscommunication or all details of
rejected items are recorded. The supplier is intimidated about shortage and the
quantity is adjusted in the next delivery. This report is to be made in duplicate. One
copy is sent to the executive chef and one copy is left with the purchase department.

STORING SYSTEM OF GOODS

Store areas are places that are designed to store the raw or cooked food before or after the
cooking and service operations. Storage of food items in any catering establishment is like
saving money in the bank. So it is important to ensure that food items purchased with care
and researches, are stored properly to preserve their freshness.

It is mandatory to keep the store under clean and hygienic conditions, as commodities that
would yield profits are stored here for future use by different departments. If the conditions
are not as per the food safety laws, then the store would be infested with pests and rodents,
which in turn would contaminate the food items. Theft, spoilage, infestations through pests,
and non- accessibility of the products in the store are the four major concerns of any food
stores department and so it is important to have strong control system in place

The following points must be considered while designing a storeroom for bulk feeding:

1. The storeroom’s proximity to the receiving department as well as to a central position

for all user departments should be kept in mind.
2. The volume of business and the type of establishment also play a major role in the
designing of a storeroom.
3. It should be spacious, free from pests and rodents, and low in humidity.
4. There should be ease of operation and ease of cleaning after goods have been stored.
5. It should facilitate the monitoring of goods in store.
6. It should have an optimum space utilization design and should have a sufficient
number of racks and shelves.
7. The type of food store required-cold store or dry-store should also be considered.
8. The store room design should aid proper stock rotation methods.
9. The storeroom should have proper lighting and should also be well ventilated.
10. The variety or number of items to be stored with their par stocks and the space
required for them should also be considered.

Prepared by: Raja Ram Mahat, Food Production and control Instructor 7
 11. The store room should be well illuminated as dark corners can be prone to pest
infestation.
12. The flooring should be durable and heavy duty, as this would be a heavy traffic area.
13. The flow of work of operations would determine the style and design of the
storeroom.
14. The spacing between shelves and storage cabinets should be kept in mind, and the
required space for them needs to be available.
15. All storage area has to be kept clean and tidy at all times. Regular cleaning schedules
need to be in place to keep the storeroom clean. Any spillages on the floor must
immediately be cleaned as they invite pests and rodents.

Storage Accommodations of Goods perishable and Non-perishable

A food store can either be a cold store or dry store. The ideal temperature for a dry store is
approximately 20°C. A cold storeroom needs to be divided into a reach-in and a deep freezer.
The temperature in the reach-in should be maintained at around 2-4°C and should never
exceed 8°C, while the temperature in the deep freezer must be maintained at -°C.

The storeroom design should aid proper stock rotation methods and safety precautions must
be taken into consideration, for example, heavier items should be placed next to the entrance
and lighter items at a height. It is also important to have good lighting and ventilation in the
storeroom.

Categories of store items and their storage rules

Fruits and vegetables

1. These perishables should be neatly stored in separate walk-in cooler in plastic crates
and placed on shelves.
2. The temperature of the walk-in needs to be maintained at 1-4°C.
3. No food items should be kept on the floor and the minimum clearance from the
ground should be at least 6 inches.
4. Items such as onions, potatoes, and bananas should not be stored in the refrigerator.
These should be stored in cool, well-ventilated storage bins.
5. Any decaying vegetables should be segregated at the receiving bay. The old stock
should be moved forward and the new stock kept in a way so as to ensure first-in first-
out, also known as FIFO.

Dairy products
1. Dairy products are to be kept either in a separate area or in a separate refrigerator, as
commodities such as cheese, butter, etc, can pick up odor from strong-smelling foods
such as ginger and garlic.
2. The temperature of the area should be maintained at 1-5°C.
3. Already cut products should be covered in plastic and stored.

Meat and fish

1. Separate storage areas should be designated for fish and meat.
2. Meat that require chilling and processing need to be stored at -1to 1°C and processed
frozen meat should be stored at -18°C with a bin card attached.
3. Fish should store at temperature of -1°C to 1 °C.
4. Large meat carcasses are to be hung on hooks and a drip tray placed underneath to
collect all drippings.

Prepared by: Raja Ram Mahat, Food Production and control Instructor 8
 5. Some portioned-out meat can also be vacuum packed before storage.
6. Fish should usually be stored in a refrigerated unit known as ‘fish-file’.
7. In many hotels, these items are sent first to the butcher department to be processed.
After processing they are immediately stored at the required temperature.
8. Items should be stored in crates that are clearly labeled and dated with bin cards and
items of the same kind should be kept together.

Egg
Store refrigerated at 1-4 °C
Keep away from other foods; their shells are porous and they can absorb strong smells.
Keep in their delivery boxes; handle as little as possible

Dry food items

Items stored in a dry store need to be categorized into local and imported items. All imported
items should be stored on one side and local items on the other side.

Beverages
Beverages in a beverage store need to be categorized into local and imported items. All local
alcoholic beverages need to be stored together one side; while all imported alcoholic
beverages need to be stored together on the other side. There should be separated wine racks
for local and imported wines. Soft drinks, mineral water, and soda water should be stored
together in a separate store.

General items
The items in a general store are also stored categorically and divided into front office, room,
housekeeping, paper and stationary, and kitchen items such as chef caps, requisition books,
etc.

INVENTORY CONTROL IN STORES

Since stored stocks are equivalent to tangible money, it is important that proper inventory
control systems are in place to keep a check on the stocks at hand. The food cost of a kitchen
is calculated on the basis of items with drawn from the store. A simple formula to calculate
the food cost would be:
Items withdrawn from the food stores
Food cost percentage= -------------------------------------------------- X 100
Total food sales

The following processes are usually involved in inventory control.

a. Inventory Control- minimum and maximum par stocks and their calculation
The inventory for the food and beverages store is carried out once a month, while that for the
general store is carried out quarterly. No items are issued to any department on the day of
inventory. The par stock for each item is different and it is determined depending on the
following factors:
 Turnover items: Every item has a stock level, maximum and minimum inventory, as
well as a reordering level. These can be checked from an item enquiry i.e. software
process. A safety stock, also known as minimum level inventory, is maintained for all
items to be able to run operations under all possible conditions.
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  Consumption of the item: The higher the consumption, the more stock one need to
keep and vice versa. But if an item is being ordered for a special function, then it
needs to be communicated to the stores so that adequate stock levels can be
maintained.
 Lead time: the time it takes for ordered goods to arrive at the store is known as lead
time. It plays a very crucial part in ordering and par stock levels. For example.
Imported goods have to be ordered well in advance as such goods need more time to
reach from another country.

Distance from supplier

The distance from the supplier, as discussed from lead time, plays an important part in par
stock levels, this is directly related to lead time.

Reordering level
This is the par stock level which when reached indicates that the item must be reordered.
Different items have different reorder levels depending on the policy of the company and the
need of the user department.

Slow and fast moving items

Slow and non-moving items are separated from the inventory at the end of the month and are
displayed on racks. The chef and the food and beverages manager are requested to devise
methods of utilizing these items, as they were the ones who had earlier indented there items if
there items do not get to be used, then partial recoveries are made by disposing of the items in
the market.

Space available in stores

Once must decide on par stocks based on the storage space available in the area. Haphazard
stocking would lead to non-accessibility of the product, which will result in spoilage and loss
of money.

Guidelines for receiving goods

 List of the day's deliveries are prepared.

 All items received must be counted, weighed and marked.
 Meats and fish should be weighed and tagged.
 Receiver should randomly check some of the products for count and quality.
 Check products to written specifications
 The vendor's invoice should be checked to (1) purchase order documentation and (2)
the actual quantity received
 Complete the receiving report.
 Receiving clerk stamps and signs vendor invoice.
 Receiver moves products to kitchen and storage.

Guidelines for issuing goods

 Certain issuing time duration should be allocated.
 Items need to be issued on receiving only requisition form.
 Form has to be made into 4 copies.
 Items must be issued as quantity requested on the requisition form.

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 Must check the signature of “ordered by” and “department head”
 Quantity of issued items must be entering in form after issuing.
 Cost can be calculated within the form if needed.
 While issuing goods, bin cards in the basket must be updated.
 Final signature must be made by the storekeeper after issuing all items.

Prepared by: Raja Ram Mahat, Food Production and control Instructor 11