Receiving, Storage & Inventory

Average Food Inventory

(Beginning Inventory + Ending Inventory) / 2

Dry Storage Ventilation

-50-70 degrees F -50%-60% relative humidity -Air circulation around products is crucial -Insulate Piping

Ordering Costs

-A curve diminishing in ordinates as the abscissae, the order quantities, increase -Total operating expenses of purchasing & receiving (purchase orders, invoices, data processing -If you order in bulk only a few times a year the ordering costs are going to be less

Inventory JIT (just in time)

-A philosophy & strategy with effects on inventory control, purchasing, and suppliers -"to draw material through the production and distribution system on an 'as needed' basis rather than on a forced feed flow driven by an order quantity" -Order things as they are needed, less storage space needed, don't have to spend as much money on things yo udon't need. -Downfall is you might not have supplies that you need.

Inventory

-A record of material assets owned by an organization -Products in storage areas are a significant investment

Inspect Against Purchase Order

-A written record of all orders must be kept to provide a basis for checking deliveries -Ensure products accepted were actually ordered -Check for missing items -Check quality based on HACCP plan

Complete Receiving Records

-Accurate list of deliveries, date of delivery, supplier name, quantity & price -Receiving records help verify invoice payment (so that payment gets completed properly) -Are cost control records (in the systems model, part of the memory and control portions. Making sure that costs are under control)

Receiving

-Activity for ensuring products delivered by suppliers are those ordered -Take legal ownership & physical possession -"the economic advantages gained by competitive purchasing..Can be lost by poor receiving practices"

Inventory Valuation Method

-Actual Purchase Price -Weighted Average -FIFO Method -LIFO Method *Not ways of ordering, ways of putting value on what you have in the storeroom

Facilities

-Adequate space -Located near delivery door & storage sites -Minimal cross-traffic with production -Minimal Handling - direct transfer to storage

Dry Storage Shelving

-Adjustable, metal -The barbed shelving prevents pests from getting on the shelves easily -Compact, greater amount of product stored in limited space -Sectional slatted platforms -Delivery pallets

Inspecting Tips

-Anticipate arrival -Have purchase orders (request to supplier) and specifications ready -Inspect food -Check temperatures of refrigerated its -Check frozen items for evidence of thawing or burn -Randomly open cases or crates for large deliveries

Food Cost

-Beginning inventory (value of how much you had in stock the beginning of the month) + Purchases (how much additional food did you buy that month) = (Cost of food available - Ending inventory) = Cost of food used

Inspect Against Invoice

-Compare delivery to supplier invoice

Receiving Elements

-Competent Personnel -Facilities & Equipment -Specifications -Critical Control -Sanitation -Adequate Supervision -Scheduled hours -Security

Storeroom

-Completes daily issue record -Monitoring storeroom, delivering foods to where they need to go

Inventory Perpetual

-Continuous recording of purchases & issues of each product in storage -Balance in stock is known at all times -Also $$ value -As its coming into storage it's tracked, as it's coming out of storage its tracked -Common in operations with computerized inventory -Periodic check against a physical inventory to make sure it is working.

Recording thermometer

-Continuously records temperatures in the unit

Weighted Average

-Cost based on both.... Unit purchase price and Number of units in each purchase -Used to determine value of inventory

Schedule Hours

-Defined by policy or contract -Coordinate between deliveries -Avoid busiest production periods -Consider nature of the shipment (perishable vs. non perishable)

Accept or reject orders

-Delivered products become property of the foodservice operation when -PO = specifications = supplier invoice -Taking legal ownership of the products -Take legal ownership (payment according to agreed timing) -Rejection at the time of delivery is easier -Continued evaluation as products are used

Minimum/Maximum Method

-Determine minimum & maximum levels of inventory -Determine how much you can store and the minimum you want on hand that's considered a safe level. -Safety Stock -Lead Time -Usage Rate -Reorder point -Differences in safety stock & minimum inventory due to impact of time & usage -Quantity ordered is the difference between safety stock and maximum inventory.

Sanitation

-Easy Cleaning -Cleaning policy defined -Plan for pest management -Supplies available for cleaning

ABC Method

-Effort, time & money for inventory control should be allocated among products according to their value -Keep track of high end, expensive items -A: steaks vs. C: straws

Reorder point

-Established from lead time & usage rate -At the minimum

Critical control

-First HACCP step, especially perishable foods -If you're not receiving it well then the food safety could drop

FIFO

-First in, first out -Pricing closely follows physical flow of products -Oldest products used first -Ending inventory reflects current posts of products, valued at the prices for most recent purchases -B/c you are using things as they are coming in, you are valuing your inventory based on the newest costs from the newest products that came in.

Dry Storage

-Foods with off-odors stored separately (onions) -FIFO: putting newer received items behind the older items so that older items are used first -Foods should be checked periodically for evidence of spoilage. -Floors & walls: easy to clean, impervious to moisture (no carpeting) -Windows: opaque, barred -Gated or locked: limited access -Doors & aisles: width to accommodate delivery equipment (room for carts) -Ventilation is essential to control temperature & humidity levels -Arrangement of products -Shelving

Blind Receiving

-Given a blank purchase order with just items listed but no quantities, go through and list all the quantities you received -Use of PO or invoice with blank quantity column -Quantify each item -Completed blind document compared to original order -Unbiased but time consuming -The person who is receiving is given only a list of what was ordered and has to write the quantity of the products, counting and filling in the PO.

Electronic Receiving

-Have barcodes so that you can use scanners to document food/take inventory. -Handheld scanners to read UPC bar codes -Tabulator scales -Speed up receiving process

Refrigerators

-Hold internal temperature below 41 Degrees F

Storage

-Holding of products under proper conditions to ensure quality until time of use -Links receiving & production (facilities should be accessible to both) -Competent employees are essential -If not stored properly, bad food will go into production. -Prevent theft & pilferage -Bulk cost savings vs. storage availability -Amount & type will vary - depends on type of foodservice operation (will have different amounts of storage depending on what is being brought in)

Removal to storage

-Immediate transfer from receiving to secure storage -Personnel are not permitted to 'wait until they have time' -Security measures to prevent theft & pilferage -Spoilage & deterioration can be problematic -Marketing & tagging -Marketing will e date and cost -Tagging will just be dates

Time & Usage

-Impact reorder point

Low-Temperature Storage

-Important in food safety & nutrient retention -Menu & purchasing policies dictate amount of low-temperature storage needed -Limiting low-temperature storage discourages. -Refrigerators -Tempering Boxes -Freezer -Humidity Control -Cleanliness -Remote Reading thermometer -Recording thermometer -Refrigerator/freezer thermometer -Frozen food should be wrapped in moisture-proof or vapor-proof material -Foods that absorb odors must be stored away from those that give off odors -Storage can be a critical control point for food (if not stored well, food can become dangerous)

Inventory Turnover

-Indicator used to monitor effectiveness of inventory control -Calculated monthly -Estimated of how rapidly product is being used -Goal: 2-4 X/month in most foodservice operations =Food Cost/Average Food Inventory

Receiving Process

-Inspection against purchase order -Inspection against the invoice -Acceptance or rejection of orders -Completion of receiving records -Removal to storage.

Inventory Control Tools

-Inventory Turnover -ABC Method -Mini-Mac Method -Economic Order Quantity Method -Inventory Valuation Methods

Receiving Methods

-Invoice Receiving -Blind Receiving -Electronic Receiving

Adequate supervision

-Irregular intervals -Ensure policies are followed -Recheck weights

Equipment

-Large deliveries - forklift or hand truck -Scales -Tables -Thermometers -Can opener, crowbar, short-blade knife -Carats for transporting to storage -Documentation records & supplies

LIFO

-Last in, first out -Assume current purchases made to meet current demands of production -Therefore oldest stock should be charged out first

Invoice

-List of goods shipped or delivered -Includes quantities & prices -What the supplier puts with the order, this is what we sent you, this is how much it will cost you

Invoice Receiving

-Looking at invoice and purchase order and make sure they are matching -Quantities of each product checked against the purchase order -Discrepancies noted on both PO (purchase order) & invoice -Efficient method -Potentially unreliable (can be unreliable if the receiver is not using both documents)

Value of Inventory

-Lowest using LIFO -Highest using FIFO

Freezer

-Maintain temperatuer range 10-0 degrees F

Safety Stock

-Maintained backup supply -Always going to have a safety stock amount on hand (bad weather, late shipments, sudden popularity of certain product). -Products are rotated through FIFO.

Refrigerator/Freezer thermometer

-Mounted or hung on a shelf in the warmest area inside the unit -Normally right inside the door up high

Dry Storage Arrangement of Products

-Orderly: designated location for each item (may set up inventory items list in order of where they are stored) -Similar products grouped together -Time saving = inventory form matches order of products

Inventory Physical

-Periodic actual counting & recording of products in stock in all storage areas -Two people, one person who is not directly involved with storeroom operations, one counts and one records data -Form matches physical arrangement of storage area -Monthly Inventory - cost of food -Less frequent inventories - daily food costs, add them up for the month -Check against food cost formula

Actual Purchase Price

-Pricing inventory at exact price of each individual product -Detailed record keeping -Mark each item with $$ when received.

Inventory Records

-Provision of accurate information of food & supplies in stock -Determination of purchasing needs -Provision of data for food cost control -Food cost is going to determine menu prices -If you don't know what your spending on your food, you won't know what to make menu prices -Prevention of theft & pilferage

Security

-Receiver is different than purchaser -Scheduled hours for receiving -Adequate facilities -Immediate storage -Locked doors - only personnel with access to receiving

Low-temperature Storage Humidity Control

-Recommend relative humidity 75%-95% -Things will dry out if not high enough

Specifications

-Reference notebook or files -Copy of the PO

Inventory Control

-Restrict access to storage areas (only people who are aloud in are going in) -Require authorized requisitions for goods -Monitor inventory levels -Record keeping of all of the above.

Tempering Boxes

-Separate units for thawing frozen foods, maintain 40 degrees F

Competent Personnel

-Specific staff member -Familiar wit food quality standards -Able to detect defective products -Undestands specifications -Given authority within organizational guidelines

Inventory Issuing

-Supply food to production units after receiving -Control of food & supplies removed from storage -Avoid pulling too much out at one time and not putting it back properly -Direct issue/Direct purchase -Products sent directly from receiving to production -Do not go into storage at all -Storeroom issues -foods received but not used the same day -Requisition is needed for control -Proper authorization -Only required quantity should be issued -Storeroom employee -Ingredient room

Remote Reading Thermometer

-To permit reading the temperature without opening the door

Economic Order Quantity

-Total annual cost of restocking an inventory product depends directly on the number of times is is ordered per year -Lower costs by larger, less frequent orders -Buying in bulk will cost more for storage -Holding costs of large inventory directly opposed to concept of large orders -EQQ: Balance between ordering cost & inventory holding cost. -Ordering Costs -Holding Costs -Objective: determine relationship between ordering & holding costs (minimum total cost)

Latest Purchase Price

-Uses latest price to value ending inventory -Value of inventory determines menu prices, which ill mean profit or loss -Inventories are a current asset on balance sheet.

Holding Costs

-Varies directly with order quantity, & shows as a straight line -Cost to maintain inventory -Capital, obsolescence of products, storage,insurance, handling, taxes, depreciation, deterioration & breakage -Holding a small amount of product is going to cost less than holding a bulk order

Low-temperature Storage Cleanliness

-Vital to food safety -Floors, walls & shelves: hard surface, easily cleaned, non-absorbent materials -Drains -Scheduled cleaning

Usage Rate

Based on experience & forecasted usage

Daily Food Costs

Direct issues (how much was sent directly from delivery to production) + Requisition issues (how much was sent from storage into production everyday) = Daily Food Costs -Add up daily food costs for the month -Check against food cost formula -Total direct & requisition issues subtracted from the cost of food used -If significant difference, then analyze reasons for the discrepancy.

Lead Time

Interval between requisition & product receipt

Ingredient room

Requisition supplies for production