TASK 1: IMPORTANCE OF STOCK CONTROL IN FOOD AND

BEVERAGE CYCLE

1.0 Introduction

In the hospitality sector—especially within food and beverage

operations—stock control is one of the most crucial management
functions. It refers to the structured process of tracking, recording, and
regulating the flow of goods such as raw ingredients, beverages, and
cleaning supplies from the moment they are ordered until they are
used. This process ensures that the right items are available in the
right quantities, at the correct time, and in optimal condition.

The hospitality industry is highly dynamic, with seasonal changes,

fluctuating customer demand, and a heavy reliance on perishable
goods. Without effective stock control, businesses face two costly risks:
overstocking, which ties up capital and increases the likelihood of
waste, and understocking, which can lead to service delays,
customer dissatisfaction, and lost revenue. In addition, a well-
organised inventory management system supports accurate
forecasting, reduces operating costs, and ensures consistency in
service quality. This makes stock control not just an operational
necessity but also a strategic tool for maintaining competitiveness in a
demanding market (Jones & Robinson, 2021).

1.1 Importance of Stock Control

The advantages of strong stock control practices in hospitality and

catering businesses extend far beyond cost savings. One of the most
significant benefits is waste reduction. Perishable products like
vegetables, dairy, meat, and baked goods can spoil quickly if not
stored or rotated properly. Using inventory rotation systems such as
First-In, First-Out (FIFO) ensures older products are used first,
preventing spoilage and minimising loss.

Another key benefit is theft prevention. Regular stock counts,

combined with accurate record-keeping, make it easier to identify
irregularities such as missing items or unexplained usage increases.
This level of control can reveal theft, misuse, or inefficient handling of
goods.

Stock control also improves purchasing efficiency. By tracking sales

and usage patterns, managers can order only what is needed, avoiding
over-purchasing or last-minute shortages. Additionally, well-maintained
storage systems—complete with clear labeling and logical organization
—preserve product quality and allow for faster, more efficient
operations.

Finally, effective stock control contributes to customer satisfaction.

Consistent availability of menu items, along with the ability to maintain
quality standards, ensures a reliable dining experience for customers,
which encourages loyalty and repeat business (Davis et al., 2020).

1.2 Food and Beverage Control Cycle

The food and beverage control cycle is a structured sequence of stages

that manages goods from procurement to sale. It ensures that stock is
handled efficiently, safely, and profitably.

1. Purchasing – This stage involves sourcing goods from approved

suppliers who meet quality, cost, and reliability standards.
Establishments often compare prices, check product samples,
and assess supplier performance before making buying
decisions.
2. Receiving – Goods are inspected upon delivery to confirm they
match the purchase order in quantity, quality, and condition.
Damaged or incorrect items are documented and returned to the
supplier.
3. Storage – Products are stored according to type: dry goods in
cool, ventilated spaces; chilled goods in refrigerators; and frozen
goods in deep freezers. Proper organization, clear labeling, and
restricted access help maintain quality and security.
4. Issuing – Stock is released from storage to production areas
only upon authorized request, documented through requisition
forms. This ensures accurate usage tracking.
5. Production – Stock is used to prepare menu items, with portion
control enforced to manage costs and ensure consistency.
6. Service – Finished products are delivered to customers promptly
and accurately, ensuring satisfaction.
7. Sales Recording – Data on items sold is collected and analysed
to monitor performance and forecast demand.
8. Evaluation – The entire process is reviewed to identify
inefficiencies, wastage, or improvement opportunities (Pizam,
2022; Rutherford & O’Fallon, 2017).

1.3 Costs of Holding Stock in a Catering Establishment

Keeping stock in a catering environment comes with both visible and

hidden costs that can impact profitability if not managed carefully.
  Spoilage – Perishable goods like dairy, meats, and fresh produce
must be used quickly to avoid waste. Overstocking significantly
increases this risk.
 Storage Costs – Temperature-controlled environments such as
refrigerators and freezers require electricity, regular servicing,
and space, all of which add to operating costs.
 Security Risks – Without proper security and access controls,
goods can be stolen or misused.
 Capital Tie-Up – Excess inventory locks up funds that could be
used for marketing, staff training, or new equipment.
 Labour Costs – Larger stock volumes mean more time spent on
counting, organising, and issuing goods (Kotas & Teare, 2020).

Task 2: METHODS OF CONTROLLING STOCK IN HOSPITALITY

ESTABLISHMENTS

In hospitality businesses, effective stock control relies on systematic

procedures that safeguard resources, reduce wastage, and ensure food
safety. From the moment goods are purchased to the point they are
served, specific control measures help maintain quality and
accountability.

2.1 Purchasing Control

Purchasing control is the process of ensuring that the right goods are
bought from reliable suppliers at the best possible price without
compromising quality. This starts with requisitioning, where detailed
requests are made by relevant departments. Many establishments
keep an approved suppliers list to ensure consistency and reduce the
risk of fraud. Competitive bidding, supplier performance reviews, and
market research support informed purchasing decisions (Sanders,
2021).

2.2 Receiving Control

This step verifies that all goods delivered match the order in terms of
quality, quantity, and condition. Deliveries are checked against
purchase orders and delivery notes. Any discrepancies, damages, or
expired items are reported and returned. The Goods Received Note
(GRN) is an important document that records this process and updates
inventory systems (Singh, 2019).
2.3 Storing Control

Storage control focuses on keeping products in the right environment

to preserve quality and prevent theft. This involves proper shelving,
labeling, and separation of goods. Perishable items must be stored in
clean, temperature-controlled facilities, while dry goods require well-
ventilated spaces. Applying the FIFO method ensures older stock is
used first (Jones & Robinson, 2021).

2.4 Issuing Control

Issuing control manages the distribution of goods from storage to
production areas. Departments must submit requisition forms detailing
the type and quantity of goods needed. Accurate issuing records help
track consumption and identify unusual usage patterns. This process
also enforces portion control, which is critical for managing costs
(Davis et al., 2020).

Conclusion
Together, purchasing, receiving, storing, and issuing controls create a
reliable framework for maintaining quality, reducing waste, and
supporting profitability in hospitality businesses.

Task 3: PROCEDURES FOR CARE AND CONTROL OF STOCK

DURING STORAGE

Introduction

Effective stock care during storage is essential for preserving the

quality, safety, and value of goods in hospitality establishments. This
process is more than just placing items on shelves—it involves
strategic organization, adherence to health and safety standards, and
consistent monitoring to avoid losses from spoilage, theft, or
mismanagement. Proper documentation also plays a critical role, as it
creates a transparent record of stock movement and ensures
accountability among staff.

In the hospitality sector, the way stock is stored can directly impact
both the quality of the food and the profitability of the operation. For
example, improperly stored seafood can quickly become unsafe for
consumption, leading to wastage and potential harm to customers.
Similarly, expensive beverages such as aged wines require climate-
controlled conditions to retain their value. Therefore, implementing
strict storage controls is non-negotiable for any business aiming for
long-term sustainability (Jones & Robinson, 2021).
3.1 Document for Receiving Expensive Items

When high-value goods such as premium spirits, imported cheeses, or

specialty seafood are delivered, the Goods Received Note (GRN)
becomes an essential document. It records critical details such as the
description of the goods, the quantity received, supplier details,
delivery date, and the name and signature of the receiving officer.

The GRN serves multiple purposes:

 Confirms that the goods meet the agreed quality and quantity
specifications.
 Acts as proof of receipt, allowing suppliers to issue invoices with
confidence.
 Creates a paper trail for auditing and stock reconciliation
purposes.

For example, if a hotel restaurant receives a delivery of ten bottles of

premium champagne, the GRN ensures that any discrepancies in
quantity or brand can be identified immediately and resolved with the
supplier before payment is processed (Sanders, 2021).

3.2 Uses of the GRN

Beyond acknowledging receipt, the GRN is a tool for operational

control. Its primary uses include:

 Verification for Payments – Ensures suppliers are paid only for

items that have been correctly delivered.
 Inventory Updates – Automatically updates stock levels in
inventory management systems.
 Discrepancy Resolution – Provides documented evidence
when challenging supplier errors or negotiating replacements.
 Audit and Compliance – Helps demonstrate compliance with
food safety and financial record-keeping standards.

In high-volume hospitality settings, the GRN also prevents confusion

between departments, ensuring that purchasing, receiving, and
accounts departments are all working with the same verified
information (Kotas & Teare, 2020).
3.3 General Guidelines for Issuing Stock

Issuing stock is not simply a matter of handing items over—it requires

adherence to strict protocols to prevent misuse, wastage, and
discrepancies. Best practices include:

1. Authorized Access Only – Storage areas should be secured,

and only authorized personnel should be allowed to issue goods.
2. FIFO Method – Always use the oldest stock first to reduce
spoilage. For example, in a bakery, flour bought earlier should be
used before newly delivered stock.
3. Requisition-Based Issuing – Departments must submit signed
requisition forms specifying the quantity and type of goods
needed.
4. Portion Control Enforcement – For items like meat or cheese,
issuing should align with portion size guidelines to control costs.
5. Real-Time Recording – Stock movements should be recorded
immediately in the inventory system to avoid discrepancies.

Following these guidelines helps businesses avoid overproduction,

excessive waste, and inflated operating costs (Jones & Robinson,
2021).

3.4 Document for Drawing Goods from Stores

The Requisition Form is the standard document used for requesting

goods from storage. It should include:

 Name of the requesting department (e.g., kitchen, bar,

housekeeping).
 Detailed description of the items needed.
 Quantity requested.
 Date of request.
 Signature of the requesting officer and approval by a supervisor.

In modern hospitality operations, many businesses use digital

requisition systems linked to their inventory software, reducing
paperwork and improving accuracy. For example, a hotel kitchen might
request 5kg of chicken breast via an online system, which
automatically deducts the amount from the central stock records once
approved (Singh, 2019).
Task 4: PROCEDURES USED IN STOCKTAKING

Introduction

Stocktaking is the process of physically counting and valuing all stock

within an establishment to verify the accuracy of inventory records. It
is a cornerstone of effective financial and operational control in
hospitality. Beyond preventing theft or loss, stocktaking also supports
accurate menu costing, budgeting, and forecasting. Inaccurate stock
records can lead to poor purchasing decisions, overproduction, and
financial discrepancies (Pizam, 2022).

4.1 Types of Stocktaking

1. Periodic Stocktaking – This method involves a complete count

of all stock at set intervals, such as weekly, monthly, or
quarterly. All stock movements are halted during the process to
ensure accuracy. This approach is useful for producing detailed
financial reports but can temporarily disrupt operations.

Example: A fine dining restaurant may conduct monthly stock

takes to reconcile inventory with sales, ensuring premium
ingredients are accounted for.

2. Perpetual Stocktaking – In this method, inventory levels are

continuously updated in real time using technology such as
barcode scanners or point-of-sale (POS) systems. Random spot
checks are performed to verify accuracy.

Example: A large hotel chain may use perpetual stocktaking for

its central warehouse, allowing multiple outlets to pull goods
while maintaining up-to-date stock records (Sanders, 2021).

4.2 Preparation for Stocktaking

Proper preparation is key to ensuring stocktaking accuracy. Best

practices include:

 Organizing Storage Areas – Group similar items together and

label shelves clearly.
 Recording All Transactions Beforehand – Ensure all goods
issued or received are documented before counting begins.
 Assigning Independent Staff – Use personnel who are not
involved in day-to-day stock handling to conduct counts
objectively.
  Using Standardized Tools – Provide count sheets, clipboards,
or digital tablets with pre-listed stock items for efficiency (Kotas
& Teare, 2020).

4.3 Stocktaking Procedure

The process typically follows these steps:

1. Count High-Value and Perishables First – Reduces the risk of

discrepancies due to theft or spoilage.
2. Accurate Measurement – Use weighing scales, measuring jugs,
or counting trays for precision.
3. Verification – Have a second person verify counts to reduce
human error.
4. Comparison with Records – Match physical counts against
inventory records and note any variances.
5. Investigation of Discrepancies – Identify causes such as
spoilage, theft, over-portioning, or recording errors (Singh,
2019).

4.4 Documentation and Valuation

Once counts are complete, results must be documented and valued

using accepted methods:

 First-In, First-Out (FIFO) – Values stock based on the cost of

the oldest items in inventory.
 Weighted Average Cost – Calculates an average unit cost for
items purchased at different prices.

Accurate valuation ensures realistic profit margins and supports

effective decision-making. For example, a hotel that undervalues stock
may overstate profits, leading to financial mismanagement (Jones &
Robinson, 2021).

References

 Davis, B., Lockwood, A., Alcott, P., & Pantelidis, I. (2020). Food
and beverage management (7th ed.). Routledge.
 Jones, P., & Robinson, P. (2021). Operations management in the
hospitality industry (2nd ed.). Routledge.
 Kotas, R., & Teare, R. (2020). The new hospitality management:
Strategies for success. CABI.
 Pizam, A. (2022). International encyclopedia of hospitality
management (4th ed.). Routledge.
 Rutherford, D. G., & O’Fallon, M. J. (2017). Hotel management
and operations (6th ed.). Wiley.
 Sanders, E. (2021). Hospitality operations: A systems approach.
Goodfellow Publishers.
 Singh, A. (2019). Hospitality business development. Routledge.