IV B Procurement, production, distribution and service Flashcards by Grace Duffy

profit center (purchasing department)

assigned both expense and revenue responsibilities (cafeteria)

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procurement

function of acquiring material for production

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cost center

manage expenses, but do not generate revenue (patient)

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can-cutting**

request SAMPLES from vendors, OPEN CANS, COMPARE QUALITIES

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purchasing: informal, open-market***

SMALL AMOUNT is needed QUICKLY (buyer gets quote, contact made, place order after considering price/quality/delivery)

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purchasing: bid buying is AKA***

formal, competitive buying

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purchasing: bid buying***

WRITTEN SPECIFICATIONS to vendors who submit a price; PLACE ORDER WITH LOWEST BID (PRICE)

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a bid is aka**

contract! (BID….contract)

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purchasing: future contracts

purchase goods at a specific price to be shipped later

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purchasing: prime vending

use SINGLE vendor for MAJORITY of purchases

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purchasing: centralized purchasing*****

personnel in ONE OFFICE (ONE hospital) DOES ALL PURCHASING for ALL UNITS in that organization

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purchasing: group or co-op purchasing***

UNION OF SEPARATE UNITS (ex: multiple hospitals) for LARGE VOLUME purchasing! (save $$$)

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just-in-time (JIT) purchasing***

purchase AS NEEDED for IMMEDIATE CONSUMPTION, NOT STORING OR RECORDING IN INVENTORY (ex: use products from the morning to serve for lunch)

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in JIT purchasing, do you place it in the inventory for a short period of time before use?***

NO - DO NOT PUT IN INVENTORY

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purchase order or requisition

written record of items ordered with quantities

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standing orders

no need to call in weekly or daily orders (???)

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free-on-board (FOB)

products delivered with all transport charges paid

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TECHNICAL product specifications**

TEST RESULTS, also GRADED FOOD PRODUCTS

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APPROVED BRAND product specifications**

BRAND NAME or label

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PERFORMANCE product specifications**

FUNCTIONING CHARACTERISTICS of the product (ex: pH level of detergents)

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formularies***

descriptions of APPROVED PRODUCTS that an ORGANIZATION would like ALL PERSONNEL TO USE (ex: CC TF formulary is all Nestle products)

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benefits of formularies?***

1) get VOLUME DISCOUNTS

2) STANDARDIZES usage

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what is collusion?***

DECLINE GIFTS & FAVORS that would compromise ability to make OBJECTIVE PURCHASING DECISIONS

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can you keep an item from a vendor with the intention to use it as an employee prize?***

NO - DO NOT TAKE OR KEEP THE ITEM

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who is a food broker?***

does NOT own products; CONNECTS BUYERS WITH SELLERS

EP***

portion size x # servings

AP formula***

AP = EP / yield (decimal)

yield = ? ****

100 - shrinkage

shrinkage is AKA***

waste = loss = shrinkage

how to determine EP portions***

1) % shrinkage X AP = amount lost in cooking 2) AP - amount lost in cooking = EP 3) EP / portion size = # portions able to be served

when determining EP portions through an equation, you should: **** A) round up B) round down C) round up if .5 or more, down if <.5

EP portions - ALWAYS ROUND DOWN! (can't make more than you have, can't serve a 1/2 portion to someone)

economic order quantity (EOQ)***

approach to ordering staple or regularly stocked items

purpose of EOQ****

find quantity that MINIMIZES PURCHASING & INVENTORY COSTS, determines ORDER SIZE THAT IS MOST ECONOMICAL

EOQ formula components -->

sq rt (2 x FS / CP)

EOQ: F****

fixed cost = fixed cost of making an order, acquisition cost, time of ordering/receiving/paperwork

EOQ: S***

sales or usage in units/year

EOQ: C***

carrying costs of inventory/holding costs; expressed as a % of the total inventory

EOQ: P***

purchase price per unit

2 types of time series forecasting***

1) moving average | 2) exponential smoothing

moving average***

UNIFORMLY WEIGHS PAST OBSERVATIONS (numbers weighted EQUALLY)

how to calculate moving average***

take the average of the most recent numbers

exponential smoothing***

uses SOFTWARE; gives MORE RECENT VALUES MORE WEIGHT (does not uniformly weigh past observations)

causal models

assumption that relationship exists between item being forecast and other factors

subjective model

used when relevant data are scarce or when relationships between data do not tend to persist over time

what is the first control in the receiving process?****

PURCHASE ORDER/PO

what is the invoice?***

VENDOR'S DELIVERY SLIP- SUPPLIER'S STATEMENT OF ITEMS BEING SHIPPED, UNIT PRICE, TOTAL PAYMENT

how to receive with documents?***

check items against PO FIRST, THEN INVOICE

blind check receiving method***

give CLERK BLIND INVOICE or PO OMITTING QUANTITIES & WEIGHTS, have him fill it in

benefits & disadvantages of blind check receiving method***

- benefits = SERIOUS CHECK of delivery, accurate | - disadvantages = takes LONGER, COSTS MORE in labor

who should be the person receiving items?***

NOT THE PERSON WHO PURCHASED

when should receiving be done?***

AT SCHEDULED TIMES; not at busy production times

what temperature should fresh fish arrive at?***

<= 41 degrees F

what should you do if there is indication that frozen fish has been thawed?***

reject it

amount of storage required depends on?****

MARKET FORM OF FOOD PURCHASED- raw, prepared, partially prepared

temperature of dry storage?***

50-70 F

cartons and bags on shelves should be how far off the floor?

humidity in dry storage should be what #?****

50-60%

fresh fruits and vegetables require what % humidity?***

85-90%

all potentially hazardous food should be stored below?

41 F

refrigerated storage: what temperatures? 1) fresh fruits and vegetables 2) meat, dairy, eggs

- fresh F&V = 40-45 | - meat, dairy, eggs = 32-40

frozen foods should be stored at?****

0 to -10 F

what does inventory management help with?***

tells you WHEN and HOW MUCH TO ORDER

perpetual inventory

running record of balance on hand; updated everytime you take something out or in

physical inventory

actual count of all goods on hand at end of accounting period

fixed order quantity inventory system****

determines the ORDER POINT WHEN YOU SHOULD REORDER THE ITEM

what is lead time?***

of days from placing order until the delivery

what is the safety stock?***

small back-up supply to ensure against sudden increases in use

how to determine the order point?****

(average daily use X lead time) + safety stock

par stock method

bring stock up to par level (or specific quantity) each time an order is placed, regardless of how much you have on hand (ex: if the par is 10 but you only have 8, then order 2)

FIFO for inventory****

stock ROTATION- older is in front and issued first

mini-max stock

stock is allowed to deplete to safety level before a new order is placed; have minimum and maximum amounts on hand, order when minimum is reached

ABC classification system- overview***

valuation depends on types of items on hand- high value (A) or low value (C)

activity level in the ABC system***

how much the total value of purchases in the inventory is for that item (low medium or high priced) each year

___% of items in the inventory comprise 75-80% of the value of the inventory*****

A items or VITAL/HIGH VALUE = only 15-20% total items (quantity)

_____% of inventory items comprise 5-10% of the value

C items or TRIVIAL, LOW VALUE = 60-65% of the inventory

what types of items are usually A items?***

proteins!

items between the A and C ranges are?***

B class = moderate, medium value

the tightest possible controls are needed for what items?***

A items = most expensive, usually protein foods

inventory valuation: purchase price

based on actual purchase price of the product, counts products, add value of all products on hand

inventory valuation: weighted average purchase price

based on average price paid for products over time: (probably review this below, no need to spit back out) 1) units of product in opening inventory X purchase price + units purchased during the month X purchase price 2) divide this number by total number of units

inventory valuation: FIFO***

uses MOST RECENT prices, inventory usually PRICED HIGH

inventory valuation: LIFO***

uses OLDEST PRICE paid for items, usually UNDERESTIMATES value of inventory

what is a central ingredient room? what is the purpose of a central ingredient room?***

(one person weighs and measures) QUALITY CONTROL measure, SAVES FOOD COSTS

IV B Procurement, production, distribution and service Flashcards

(83 cards)