PRINCIPLES OF FOOD, BEVERAGE, AND LABOR COST CONTROLS

DEVELOPING STANDARDS AND STANDARD PROCEDURES FOR PURCHASING � 117
daily basis presupposed by a pure perpetual method. Others fear the comparative
absence of control in the periodic method. For these and other reasons,
some have developed what amount to hybrid systems that selectively employ
the more desirable features of both systems.
One such system is essentially a perpetual method, but with reorder
points and par stocks set sufficiently high so that orders need not be placed
at precisely the moment that reorder points are reached. Such establishments
may use the reaching of a reorder point as a signal that a particular
item should be ordered on the next regularly scheduled day for placing
orders and may merely add the item to a list. If the reorder point were set
high enough, there would be little danger of consuming the remaining quantity
through normal usage before the next delivery.
The final determination of a routine — one of those illustrated earlier
or some variation — must be based on the needs of the individual operation
and the policies established by management. The important point is that
the purchasing procedure must take into account the need for determining,
on an ongoing basis, the quantity of each product that will be adequate for
meeting anticipated demand. It must guard against overpurchasing (the purchasing
of unneeded quantities). In the case of perishables, overpurchasing
increases the possibilities for both spoilage and theft. In addition, it increases
the possibilities for overproduction and consequent waste. In the case of
nonperishables, overpurchasing clearly increases the possibilities for theft; it
may increase the need for personnel, and it certainly can tie up unwarranted
amounts of money in inventory. Because control systems are established to
guard against these conditions, it is obviously important to set up procedures
for determining appropriate quantities for ordering.
Assume that management elects to maintain supplies of nonperishables
by the perpetual inventory method and that all relevant records are in a
computer, including reorder point, reorder quantity, previous purchases and
issues, and any other information that would be useful in making purchase
decisions. With all such data available, management can quickly determine
the current status of the entire inventory, including a list of those items at
or below reorder point. In effect, the perpetual inventory card for each item
would be a file in a computer database, rather than a card in a file drawer.
Using one of the programs currently available, it is comparatively simple
to create a computer inventory for nonperishable foods. Depending on
the specifics of the software used, one can record such information as the
items in the inventory, various vendors, purchase units, current prices, quantities
purchased, and quantities issued. The purchases and issues for each