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Flashcards in procurement2 Deck (27):
1

methods of purchasing

informal/open market, formal competitive bid

2

what is informal/open market?

involves ordering needed food and supplies from selected list of vendors on daily, weekly, biweekly, or monthly price quotations

3

informal used when ___ is an important factor

time

4

informal is common in ___

smaller restaurants, private institutions, commercial ops

5

informal usually done under these circumstances:

amount of purchase small, an item only can be from a couple sources, need is urgent, stability of market uncertain, size of op too small

6

what is formal competitive bid buying?

buyer selects group of suppliers, written specs and estimated quantities needed are submitted to suppliers with invitation for them to quote prices, suppliers compete over price quotations on buyers specs, buyer decides, formal contract

7

formal need to consider ___

legal considerations

8

formal common in:

school sys, correctional institutions, hospitals (tax-supported places)

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advantages of formal?

reduce misunderstanding due to quality, price, delivery; cost savings by buying bulk, good for standing orders (pay at regular intervals)

10

disadvantages of formal?

time consuming, not practical for perishable items cuz day to day fluctuation in market price, dishonesty when involve large amt money

11

what is line item bidding?

choose suppliers with lowest price item by item

12

what is all or nothing bidding?

whole line of items, choose supplier with lowest price on all

13

what are diff buying methods?

independent purchasing, group purchasing, centralized purchasing, warehouse club, JIT

14

what is independent purchasing?

done by unit or department of org that has been authorized to purchase

15

advantage of independent?

sole responsibility and authority for purchase without need for multi org lvls approval

16

what is centralized?

purchasing activity done by one person or department (head of dpt report directly to top mngmt, has responsibility make profit)

17

examples of centralized?

stores/procurement dpt in hospital; stores/supplies in uni

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advantages centralized?

better control, development of personnel just responsible for purchasing, better performance in other dpt without additional need to procure, more economical/profit

19

what is grp purchasing?

2+ independent orgs combine to buy together, involving bring together foodservice managers from diff ops/schools, most often onsite foodservices, for joint purchase

20

example group purchase?

sakatoon health region long term care

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advantages group?

increased leverage, buy at lower price, reduced contact with sales reps, time savings, update specifications

22

disadvantages group?

may require central warehouse unless grp large enough, must agree specs/bid schedule, food preferences differ

23

goals of JIT?

secure steady flow raw materials, reduce lead time required ordering product, reduce amt inventory in storage/production, reduce cost associated w/ storage

24

what are stages of supplier selection and evaluation?

survey-->inquiry-->supplier performance evaluation

25

what is survey stage?

explore all possible sources for product, examine records of experience with suppliers (consider incorrect orders, handles emergency)

26

what is inquiry stage?

compare suppliers for quality, quantity, price, time; narrow list from possible to acceptable

27

what is supplier performance evaluation?

meeting performance standards? New ones considered for future?