Once purchase specifications have been developed and quantities to be purchased have been established, your next step is to determine how to buy these items at the
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75
ing translation of Maguelonne Toussaint-Samat’s History of Food (ISBN 063194975), September, 1994, published by Blackwell Publishers. It is an outstanding book and, if you are a serious stu-dent of food, culture, and history, its 750-plus pages will literally fly by! This book is full of in-teresting tidbits (for example, did you know that the word “salary” is a derivative of the word
“salarium” or that “salt money” is the term originally used to identify the money received by Ro-man soldiers to buy their daily salt rations?). It would be an excellent addition to your profes-sional library. Take our advice as well as that of others who suggest savoring this book by read-ing no more than a few pages at a time.
best price. Some would say that determining the best price should be a simple mat-ter of finding who has the lowest-cost product and placing an order with that per-son. In fact, that is almost always a sure sign of a manager who lacks understand-ing of the way business, and vendors, operate. The best price, in fact, is more accurately stated as the lowest price that meets the long-term goals of both the foodservice operation and its vendor.
When you have a choice of vendors, each supplying the same product (your specification), it is possible to engage in comparison shopping. The vehicle used to do this is called the bid sheet (see Figure 3.10). The bid sheet includes vendor in-formation, buyer inin-formation, item description, unit of bid, bid price, salesperson’s
FIGURE 3.10 Bid Sheet
Vendor: Buyer:
Vendor’s Address: Buyer’s Address:
Vendor’s Telephone #: Buyer’s Telephone #:
Vendor’s Fax #: Buyer’s Fax #:
Vendor’s E-Mail: Buyer’s E-Mail:
Item Description Unit Bid Price
109 Rib, 19–22#, Choice Pound
110 Rib, 16–19#, Choice Pound
112A Ribeye Lip on 9–11#, Choice Pound 120 Brisket, 10–12#Deckle off, Choice Pound 164 Steamship Round, 60#, Square bottom, Choice Pound 168 Inside Round, 17–20#, Choice Pound
184 Top Butt, 9–11#, Choice Pound
189A Tender, 5#Avg. Pound
193 Flank Steak, 2#Avg., Choice Pound
1184b Top Butt Steak, 8 oz., Choice Pound 1190a Tenderloin Steak, 8 oz., Choice Pound 109 Rib, 19–22#, Certified Angus Beef, Choice Pound
123 Short Ribs, 10# Pound
180 Strip, 10–12#, Choice Pound
Bid Prices Fixed From: to
Salesperson Signature: Date:
signature, and date. It also includes the dates that the bid prices will be “fixed,”
which means the dates that the supplier agrees to keep the bid price in effect. Us-ing our example in Figure 3.10, the bid sheet would be sent to all meat vendors each week on Friday to be returned Monday for the weekly bid prices. Then you would compare the item prices to see from which vendor you would buy.
After you have received bids from your suppliers, you can compare those bids on a price comparison sheet (Figure 3.11). A price comparison sheet typically has a place to list the category being bid, namely, produce, dairy products, meats, and so on; the name of the vendors available to bid; bid date; item description; unit of purchase; best bid price; best company quote; and last price paid. This information may then be used to select a vendor, based on the best price. Once the best price is determined for each item, then a purchase order (discussed later in this chapter) using the best prices can be developed for each vendor.
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FIGURE 3.11 Price Comparison Sheet
Vendors Category: Produce
A. Bill’s Produce Date Bid: 1/1
B. Davis Foods C. Ready Boy
Price Comparison Sheet
Last
Item Best Best Price
Description Unit A B C Bid ($) Company Paid
Lettuce, Iceberg,
24 ct. case $ 9.70 $10.20 $ 9.95 $ 9.70 A $ 9.50
Lettuce, Red
Leaf, 24 ct. case 10.50 10.25 10.75 10.25 B 10.10
Mushroom,
Button, 10 lb. bag 15.50 15.75 16.10 15.50 A 15.75
Mushroom,
Portobello, 5 lb. bag 19.00 19.80 18.90 18.90 C 19.00 Onion, White,
Medium, 50 lb. bag 20.25 20.00 20.50 20.00 B 19.80
Pepper, Green
Bell, 85 ct. case 28.90 29.50 30.10 28.90 A 27.00
Potato, Russet
Idaho, 60 ct. case 12.75 12.50 12.20 12.20 C 12.85
Reviewed By: M. Hayes
Bid sheets and price comparison sheets may be used to determine the specific vendor who can supply the lowest price, but they do not give enough information to determine the best price. This makes sense when you realize that your own guests do not necessarily go to the lowest-priced restaurants for all of their meals. If they did, there would be no hope of success for the operator who tried to provide a bet-ter food product, in a betbet-ter environment, with betbet-ter service. In fact, most food-service operators would resent guests who came into their operation and claimed they could get the exact same item for a lower price down the street.
It is a truism that any product can be sold a little cheaper if quality is allowed to vary. Even with the use of product specifications, vendor dependability, ease of order placement, ability to access important account information via the Internet, the quality of vendor service, accuracy in delivery, and payment terms can all be determining factors when attempting to determine the “best price’’ from a supplier.
In Figure 3.11, Bill’s Produce has the lowest price for iceberg lettuce, button mush-rooms, and green bell peppers. Bill’s Produce may be the preferred vendor for these items if price alone is the issue. If, however, Bill’s Produce is frequently late in deliv-ery, has questionable sanitary habits, and frequently is short or unable to deliver the promised product, the lower price may be no bargain. Davis Foods, on the other hand, may have a reputation for quality products and service that make it the vendor of choice. Any foodservice operator who uses price as the only criterion when shopping will find it very difficult to develop any meaningful relationship with a supplier.
For the smaller operation, the manager may be interested in comparing the to-tal price from each supplier, rather than the price of individual items. That is, each ordering day, the manager would multiply the quantity of an item needed by the best price. An approach such as this is used when buying strictly from the price comparison sheet may result in orders too small to meet a supplier’s minimum or-der requirement, that is, the smallest oror-der that can be placed with a vendor who delivers. If the minimum order requirement cannot be met using the lowest prices, then the manager may have to choose the supplier with the next highest price to fill a complete order.
In some cases, the vendor to be used by the foodservice operator has been de-termined in advance. This is often true in a large corporate organization or in a franchise situation. Contracts to provide goods may be established by the central purchasing department of these organizations. When that happens, the designated vendor may have a national or a long-term contract to supply, at a predetermined price, items that meet the operation’s specifications.
Fun on the Web!
Houston, Texas is home to one of the nation’s largest food service suppliers. Sysco Foods, or one of its regional operational partners, delivers a wide array of foodservice products to virtually every part of the United States and as a result, is often chosen to fill national food supplier contracts.
An innovative company, Sysco was one of the first to utilize the Internet to simplify an operator’s ordering processes. To learn more about them and their product lines, go to: www.sysco.com.