PRCH 100

PURCHASING, STORAGE, COST CONTROL AND

MENU PLANNING
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• What is Purchasing?
Paying for an item or service.

• What is Selection?
Choosing from among various alternatives on various levels.

• What is Procurement?
An orderly, systematic exchange between a seller and buyer.
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• Types of Hospitality Operations

Commercial Segment Commercial Hospitality
Operations
Profit-Oriented Companies

Institutional Segment
Facilities operated on a break-even basis
Non-Commercial
Military Segment Hospitality Operations
Operations that include troop feeding and housing
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Purchasing Process
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• What is Product Distribution?

Making a product available for purchase by dispersing it through the
market.
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• What is a Distributor?
A wholesaler who assumes extra responsibility.

• What is a Wholesaler?
Fulfills orders of retailers and purchases in bulk which lowers the
price from distributors.

• What is a Retailer?
The outlets where consumers can purchase products.

• What is Broker/Agent?
They represent the producer in the sales process.
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Product Distribution System
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• What is Purchase Specification?
Includes product spec information and also includes services
required from suppliers.

• What is the purpose of Purchase Specification?

Create quality and cost control standards
Help avoid misunderstandings
Can be used as a training device
Assist in the bid process

• Who decides on what to include on the specs?

Owner or manager
Buyer
User
Some combination of the three
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• What is included in the specs?
Performance requirement Type of package
Exact name Preservation or processing
Packer’s name Point of origin
Grade Packaging procedure
Size
Ripeness
Trim
Package size Form
Color

• Who writes the specs?

Company personnel
Industry publications
Hire an expert
Buyer and supplier can work together
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• Potential problems with Specs
Unreasonable requirements
Inadvertent discrimination
Too high of quality standards
Broad grades
Not flexible
Employees expertise in understanding information

• Problems associated with Bid Buying?

Lowball bids
Inequality among bidders
Restrictive specifications
Redundant favoritism
Delivery schedules
 PHIL-GEPS
Philippines Government Electronic Procurement System
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• What is Quality?
Means to incorporate features that have a capacity to meet consumer
needs (wants) and gives customer satisfaction by improving products
(goods) and making them free from any deficiencies or defects.

• Who makes decision on the quality?

Customer
Owner/Manager
Inspectorate
 Questions?
If none, let’s end the meeting for today!