There are nine buying methods that may be used for
purchasing foods. The particular method chosen often
depends on the location of establishment, the type and size of
the business, its purchasing power and the type of food being
purchased.
1. Purchasing by Contract
2. Purchasing by Daily Market Quotations List
3. Purchasing by Weekly/Fortnightly Quotation lists.
4. Purchasing by Cash & Carry
5. Purchasing by Paid Reserve
6. Total Supply
7. Centralized Purchasing
8. Periodical Purchase
9. Standing Order Purchase
Two common types of contract used:
The Specific Period Contract.
The Quantity Contract.
The Specific Period Contract:
Aims at determining the source of supply and the price of
goods for a stated period often of three or six months.
This reduces the time and labour of negotiating and
ordering to a minimum.
When the prices of items are fixed for a period of time,
items with a fairly stable price such as milk, cream, bread,
etc. can be contracted in this way.
The Quantity Contract:
Aims at ensuring continuity of supply of a given quantity
of an essential item at an agreed price over a particular
trading period.
Examples are frozen fish, frozen vegetables etc.
The advantages of this method are the safeguarding of
continuity of supply, and that a known and stable price
has been agreed upon which accurate pricing of menus
can be made.
Although large quantities are involved, then caterer
would not be required to take delivery of the total
amount contracted at one time, but depending on the
wording of the contract, would take delivery every week
or two weeks, or any period of time of a proportion of
the contracted quantity.
This method is used when purchasing perishable foods on a
daily basis and when it is possible to have two or more
approved suppliers.
A senior member of the staff or the chef would take a
quick stocktake of the foods left after each lunch service,
pass this information to the head chef who would
complete the ‘daily market list’, by entering the
quantities of all items he/she requires to be purchased
for the next day’s business in the ‘wanted column’.
The list would then be processed by a member of staff in
the purchasing office. Every approved supplier would be
phoned and asked to quote a price for each of the items
required. The price quoted would be based on the
quantity of the items required.
This method is used to purchase grocery items where a
delivery of once a week or fortnightly is adequate.
This method is similar to that described when purchasing
perishable foods by daily market list.
In this case quotations are sought from various suppliers and
on receipt of quotations these would be entered on to a
Master Quotation List and decision then made about where in
orders for each item are to be placed
It should be noted here that the specifications for items will
usually be just by brand name of the product together with
the size, weight, count e.g. Heinz Tomato Ketchup, Spices like
MDH, catch, BMC etc.
This method is of particular interest to the medium and small
establishments whose orders are often not large enough to
be able to get regular deliveries from wholesalers and food
manufacturers.
Cash and carry food ware houses are situated in all towns and
resemble in layout and operation that of very large food
markets.
Advantages:
1. The warehouses are situated near to most catering
establishments and their hours of business are usually
longer than those of most food wholesalers.
2. Small or large quantities may be purchased at
competitive prices.
3. Customers are able to see what they are buying, as
against buying just from a pricelist or catalogue.
4. Customers may use the warehouse as often as they like
and in doing so keep the level of stocks held low.
Disadvantages:
1. Caterers have to provide their own staff and transport to
collect the items from the warehouse.
2. Caterers have to pay cash for the items they purchase.
This method is used when it is necessary to ensure the
continuity of supply of an item for the menu which is of
particular importance to a restaurant.
Caterers are buying in advance a large quantity of a
commodity to cover the needs for several months ahead.
E.g. frozen jumbo size prawns, and frozen fillets of beef.
This method is relatively new.
It is a method offered only by a few suppliers who are
able to offer a full supply service of all commodities.
Advantages:
1. Negotiation with one supplier only.
2. Reduced volume of paper work.
3. There will be a fewer deliveries with the result less
wastage of time and less staff required to receive the
items.
The main disadvantage is that of being tied to one major
supplier, whose prices may not be as competitive as when
using several suppliers and whose range of certain
commodities may be limited.
A chain of hotels may prefer to have a centralised-
purchasing system for non-perishable items.
All requisitions/requirements for the entire year or for a
specific period are sending to head office.
The purchase department places order for all the hotels
and dispatch to various hotels.
The advantage of centralized purchasing is that it
reduces the purchase department’s overheads and due
to large quantity of supply ordered, more competitive
rates can be settled for all commodities.
Sometimes the suppliers are directed to supply the
requisite quantity to the respective hotels and the hassle
of supplying is also eliminated.
Foods and beverages are purchased at a lower price
because of volume purchasing.
It provides a better opportunity to obtain desired quality
because purchaser has a greater choice of markets.
Goods can be purchased to the purchaser’s exact
specifications.
Larger inventories can be maintained assuring a more
constant supply to individual units.
Greater control over dishonesty of individual unit food
purchasers can be maintained.
Units must accept the standard item in stock and has
little freedom to purchase for own peculiar needs.
Units cannot take advantage of local “specials” at
reduced prices.
Menus usually must be more standardized, thus limiting
the individual unit’s manager’s freedom to change a
menu.
Finally, it should be noted that decisions about whether or not
to become involved in centralized purchasing systems are
normally made by top management, not by food controllers.
However, there are times when food controllers may be
called upon for advice and opinions, and they should
understand what is involved in centralized purchasing.
Aims at purchasing the commodities procured
periodically.
The procedure adopted for their purchase is usually
quotations, cash and carry or contract purchasing.
Usually either the non-perishable items are purchased
through periodical purchase system or those items which
may not be required on regular basis.
In this method buyers commonly make arrangements
with certain purveyors for the delivery of goods without
specific orders.
This arrangement takes one or two forms.
One arrangement calls for the delivery of specific no. of
certain items each day; e.g. twelve loaves of bread, one
packet of butter etc. The number will remain constant
unless specifically changed by the buyer.
The second arrangement usually calls for the
replenishing of stock each day up to a certain
predetermined number. For instance, the steward might
arrange with a diary supplier to leave sufficient
quantities of bulk milk each morning to bring the total
supply up to a predetermined figure, such as twenty
gallons.
While these arrangements are convenient, they do
present a number of possibilities for both waste &
excessive cost to develop.
