Typical Ordering Procedures

Typical Ordering Procedures13YOU SHOULD BE ABLE TO:Explain the objectives of storage.Describe the factors needed to achieve storage objectives.Illustrate the process of managing inventory and storage facilities.Generate a stock requisition and describe its use.List important storage-management practices that small hospitality operators should follow.A BUYER’S CONCERNSObtaining theRight amountAt the right timeWith the right supplier servicesFor the right EP CostPURCHASE REQUISITION Document listing the products or services needed by someone in the hospitality operation; sent to buyer to find the best deals; typically used for items buyer doesn’t purchase on a regular basis.PURCHASE REQUISITION (CONT.)DisadvantagesToo many people involved in deciding types and qualities of products and servicesInvites backdoor sellingRequires time and effort to implement/maintain such a system PURCHASE REQUISITION (CONT.)AdvantagesUseful training device for department heads who want to become full-time buyersCan relieve a buyer of responsibility for ordering mistakesCan relieve buyer of paperworkHelps provide control of product use in different departmentsORDERING PROCEDURESBuyer determines amount to orderBuyer prepares purchase order (PO)Buyer sends purchase order to suppliers Purchase order form varies, but basic information the sameORDERING PROCEDURES (CONT.)Placing the orderHanding the sales representative the POCalling in or faxing the orderSending the order by emailSending the order via the WebPURCHASE ORDERSResembles a purchase requisition. However it is an external document used to procure goods and services.PURCHASE ORDERS (CONT.)Information usually includesDateTransportation requirementPackaging instructionsQuantity Item typeUnit sizeUnit priceExtended pricePURCHASE ORDERS (CONT.)Operations use different number of copies of the POSupplier -- originalSecond supplier copy – to use as a billThird supplier copy—for initialing and to send back to the buyerBuyer copyReceiving clerk copyRequisitioner copyAccountant or bookkeeper copyHead office copy CHANGE ORDER Used if a buyer wishes to alter a purchase order that was recently placed with a vendor; may be a written document, or it could be accomplished with a phone call or email.EXPEDITINGBuyer’s effort to monitor suppliers to ensure that products and services arrive at the right time in the right conditionSpecial times – steaks required for a banquetOften used with FFE, since unlike foods or beverages, it is much more difficult to ship and install themSTREAMLININGBlanket OrderPurchase Order Draft SystemSupplier’s FormsStanding OrderComputerization