W9 Procurement

Question 1

Define procurement

Answer 1

systematic exchange between seller and buyer to
obtain goods & services
-determining types of products needed, making purchases, receiving & storing shipments,
administering purchase contracts.

Question 2

What part does procurement play in the systems approach?

Answer 2

first step of transformation

Question 3

What activities exist in procurement?

Answer 3

• purchasing
• receiving
• storage
• inventory control

Question 4

What is the proper purchasing procedure?

Answer 4

1.recognition of need
2.description of needed item
3.authorization of purchase requisition
4.negotiation w/ potential suppliers
5.evaluate proposals and place order
(follow up of order)
6.verification invoice and delivered material
7. closure of purchase record, payment for materials

Question 5

Purchasing can be viewed in two ways, what are they and give examples for each.

Answer 5

1.cost center: generated profit does not cover expenses
eg. patient food services

2.profit center: generates revenue greater than expenses
eg. hospital retail cafeteria

Question 6

What is the marketing channel order?

Answer 6

producer>manufacturer > distributor>suppliers>customers

Question 7

What groups are considered for market regulations?

Answer 7

-government
- consumers
-industry

Question 8

What government regulations are there for the market?

Answer 8

-legislation that protects consumer
- promotes competition among industries

Question 9

What industry regulations are there for the market?

Answer 9

• satisfies consumer while making profit
• responsible for complying with legislation

Question 10

What consumer regulations are there for the market?

Answer 10

• alerts government about food safety, nutrition, environment concerns
  -expects industry to produce appropriate products

Question 11

What knowledge is needed to make purchases?

Answer 11

• products to be procured
• market
  -buying procedures
• market trends

Question 12

What is the primary function of the buyer?

Answer 12

procure required products for desired use at minimal cost
- conduct value analysis (quality & price relationship)
- make or buy decisions

Question 13

What are the factors of a make or buy decision?

Answer 13

• quality
  -quantity
  -service
  -cost

Question 14

Define specifications and state the different types.

Answer 14

list of detailed characteristics desired in product for specific use.
1. Technical specifications (eg. grade A meat)
2. Approved brand specifications (manufacturer specifications)
3. Performance specifications (eg. dishes/minute cleaned)

Question 15

Specifications for food products should include…

Answer 15

• name of product/standard
• federal grade, brand
• size of container
  -count/container
  -unit for price based on

Question 16

Criteria written for specifications should be…

Answer 16

• clear, simple, specific,
• consistent with market
• verifiable w/ label statements, grades, weight
• fair to supplier, protect buyer
• realistic quality standards
• able to be met by several competitors

Question 17

What are the different types of purchasing?

Answer 17

formal (w/contract) & informal (by phone or in person)

Question 18

What legal considerations need to be considered during purchasing?

Answer 18

law of agency: buyer’s authority to act for organization

law of warranty: government institutions must use competitive bidding

Question 19

What are the different methods of purchasing?

Answer 19

1. Independent purchasing: done by unit/ department of organization
2. Centralized purchasing: done by one person

Question 20

What are the pros of centralized purchasing?

Answer 20

Pros:
-better control; one complete set of records
- development of personnel with specialized knowledge, skills
- better performance in other departments
-economic & profit potentials of purchasing, making it a profit > cost center

Question 21

What are the cons of centralized purchasing?

Answer 21

Cons:
- buyers are not experts in specific product lines such as food

Question 22

What are methods of purchasing are there?

Answer 22

1. Group purchasing
2. Warehouse club purchasing eg. Costco
3. Just in time purchasing- reduce inventory, lead time

Question 23

What does a supplier evaluation consist of?

Answer 23

-Current suppliers need to be monitored to be sure they are meeting performance expectations

-New suppliers need to be screened to determine if they should be considered in future

Question 24

What is the most important decision in purchasing?

Answer 24

choosing your supplier :)

Question 25

Ideal method of purchasing based on…

Answer 25

price, quality, delivery from supplier

Question 26

what are the different types of purchasing records and what is the purpose of each?

Answer 26

1. purchasing requisition: first doc in purchasing process; used to request food items
2. purchase order: completed by buyer and given to supplier; outlines specific terms agreed upon
3. Invoice: prepared by supplier

Question 27

what should be considered for receiving practices?

Answer 27

1. competent personnel
2. facilities & equipment (adequate space, HACCP)
3. Process (inspect against purchase order and invoice, accept/reject order, compete receiving records, remove to storage)