ManageFirst Purchasing Final Exam With Correct Answers

ManageFirst Purchasing Final What type of system does a small business operation use without a purchasing department? - ANS Decentralized When taking inventory what do you need to have? - ANS Parstock Trading staff, handling vendors, and cooperating with other managers are all part of which skill? - ANS Interpersonal When receiving, vendor order must be compared with? - ANS Purchasing order A signature dish is a menu item that? - ANS Customers associate with specific operation After determining the need of what products, the next step is? - ANS To learn about available products Which factor is important when evaluating a vendor? - ANS Consistent quality Quality standards are based on? - ANS Operations requirements for products and services To forecast upcoming trends, always look at? - ANS Past sales trends Benefits of using a broad line vendor? - ANS Decrease processing time - Less paperwork and requisitions Purpose of purchasing code and ethics? - ANS To make sure behavior is acceptable Values perception is defined as a? - ANS Customers opinion of product's value One limitation with parstock levels is? - ANS Does not consider the cost of food or ordering Stock out occurs when an item has been? - ANS Depleted from inventory Maintaining quality standards is the most difficult with which item? - ANS Fresh vegetables When you purchase something with an agreement for something else besides money in return, it is called what? - ANS Reciprocity Orders that have been ordered but not yet received are called what? - ANS Expedited What kind of purchasing system allows products to be received close to when they're needed? - ANS Just in time Purchasing in excessive quantities will result in? - ANS More product being at risk for theft What product price is government controlled? - ANS Alcohol What activity is typically a responsibility for a purchaser? - ANS Negotiating contracts with suppliers To markup a price and find percentage you? - ANS Cost of item: $1.50 X 35% ️ move decimal two places to the left then multiply! = 1.50 X .35 = 0.52 markup Who does a large chain operation report to? - ANS Purchasing Vice President or director If you were to receive a vacation in return of payment what is it called? - ANS Kickback Specifying the exact name of the item can? - ANS Help ensure the correct item is received In what way can produce be sent to preserve quality? - ANS IQF Individually quick frozen Market form indicates how am item is? - ANS Processed prior to being packaged Perishable items are items that? - ANS Will decay within a limited period of time Some operations allow their employees to buy products from other vendors at a discounted price this is known as a? - ANS Steward Sale What is the most reliable way to find appropriate supply? - ANS Previous experience with vendors A purchaser can assure that the vendors will provide specified quality by? - ANS Checking products and returning any that don't meet the standards Fresh whole tomatoes, tomato purée, tomato paste, etc are all examples of what? - ANS Market form Product ownership is transferred from the vendor to the purchaser when? - ANS Delivery invoice is signed The parstock approach requires what? - ANS The purchaser to determine the level of inventory that must be in stock from one delivery day to the next A purchaser should conduct an evaluation of operation quality requirements by? - ANS Talking and working directly with managers that use and purchase the items A national buying group is useful for which operation? - ANS Large chains Most products should be stored at what height? - ANS Shoulder height or lower Some operations combine concerns about purchasing ethics in a what? - ANS Statement of business conduct The purchaser must ensure that their storage room is large enough to hold the product before agreeing to receive which service from a vendor? - ANS Quantity discount A customer count forecast can be calculated using which formula? - ANS Customer count last period + customer count last period X by increase expected Refrigerated food must be received at what temperature? - ANS 41 degrees or lower Frozen foods must be received at what temperature? - ANS 32 degrees or lower What best describes the advantage of cooperative buying? - ANS Restaurants buy products together in bigger quantities and split the products to save money. Lower prices from suppliers!! Alternative products and services are known as? - ANS Acceptable substitutes When preparing for vendor negotiations, what is there to consider? - ANS Fallback position. Aka fallback plan. Example: A fallback decision of a product price just in case your desired price gets rejected. Which agency will not inspect a vendor? - ANS Academy of nutrition and dietics the amount of inventory needed to maintain a continuing supply of items from one delivery to the next is called? - ANS parstock When does the purchasing process begin? - ANS when needs are determined what is the definition of value? - ANS the relationship of purchase price and quality quality is most difficult to establish for what type of products? - ANS fresh produce the concept of "competitive advantage" relates to benefits that the organization has over its - ANS competitors A decentralized purchasing system is most often used by which type of establishment? - ANS Single-unit operation The document used by purchasers to accept a vendor's price is called a? - ANS delivery invoice what type of skill does a purchaser use most when determining how to reduce costs without reducing quality? - ANS conceptual what does a job description describe about a purchaser's position? - ANS Technical skills that must be possessed with what type of purchasing system are vendors considered a resource? - ANS Purchaser-vendor partnership Who should receive a copy of the purchase order when the purchaser authorizes shipment from a vendor? - ANS The operations receiving personnel What is the best definition of quality? - ANS appropriateness for product use what must a purchaser know in order to determine the quality of a product? - ANS its intended use Which type of purchaser is concerned about the relationship between price and quality as purchasing decisions are made? - ANS value-conscious What document implements an operations quality standards? - ANS Purchase specification What is an advantage to using a brand for a purchase specification? - ANS it is quick and easy to write why do receiving staff use product specifications? - ANS To determine that quality requirements are met What item is commonly found in a product specification? - ANS market form what must first be determined when doing a make-or-buy analysis? - ANS product quality why is it often difficult to evaluate make-or-buy decisions? - ANS Most managers don't think its necessary to do so What should be done if a make-or-buy analysis indicates two labor hours daily can be reduced with a convenience food product, and the decision is implemented because of money should be saved? - ANS eliminate the two labor hours from the schedule How do excessive quantity of products in inventory impact the operation's cash flow? - ANS They tie up cash that could be used for other purposes. Forecasts indicate that 530 customers will be served Saturday night and 17 percent will order sirloin steaks. How many sirloins steaks will be served? - ANS 90 Some POS systems track sales and determine the quantity of ingredients that should have been used by referencing - ANS standardized recipes A meat item costs $14.36 per pound (AP) and has an edible yield of 72 percent. What is the approximate cost per servable pound? - ANS $19.95 What is the food cost for one portion of steak (100 percent yield) if a 4 oz serving is used and the steak costs $12.80 per pound? - ANS $3.20 A purchaser wants to order highly perishable products for immediate use. She needs 12 cases and currently has 2.5 cases available. How many cases will she normally purchase? - ANS 9.5 cases The purchaser has set a par level of 8 cases of lettuce. One case will be used between order and delivery, and 2 cases are currently available. How many cases need to be purchased? - ANS 7 cases Which products should be the minimum-maximum inventory system be used for? - ANS nonperishable products A petty cash fund is typically used with which type of purchasing system? - ANS open market purchasing Which purchasing system involves buying food products in relatively small quantities at a close time to when its needed? - ANS just in time purchasing vendor sourcing involves activities in which the buyer - ANS evaluates vendors prices for specific orders what happens in the best relationships between buyers and vendors? - ANS vendors and buyers maximize benefits from their relationship What is the approximate number of vendors that should be approved for each category of food products? - ANS 4 Which is the best information on which to base selection of a vendor? - ANS the vendor has a good reputation what is a request for proposal (RFP)? - ANS an inquiry to a vendor about prices for products of a specified quality Which type of vendor offers a large selection of relatively few products? - ANS specialty-line vendor Who purchases most of the products needed by the units in very large organizations? - ANS national buying groups Who typically bills the franchises for products received though the purchasing system established by a large multi-unit franchisor? - ANS the franchisor What type of product is most difficult to purchase and distribute in a large multiunit organization? - ANS fresh produce Information helpful in evaluating the performance of a local vendors can come from - ANS employees What is true about the prices charged by the most reputable vendor? - ANS they normally charge higher prices than less reputable vendors Buyers who focus primarily on a product's per-purchase-unit selling price - ANS do not normally receive either quality or value which concept is a traditional view of pricing? - ANS tiger prices equal better image what happens in a win-win negotiation? - ANS the parties reach an agreement that benefits all concerned which is an important characteristic for an effective negotiator? - ANS listening carefully What type of negotiation position reflects when negotiation on a specific point should be concluded? - ANS fallback what type of negotiation position reflects a buyers ideal outcome? - ANS going-In what can buyers do to establish a better negotiation? - ANS establish reasonable quality standards a vendors price reduction is a discount when it is? - ANS applied to net price which amount would be typical for a prompt payment discount? - ANS 4% What much a purchaser do before contacting vendors about a potential purchase? - ANS Determine quality and quantity requirements for items needed. what happens when a backorder occurs? - ANS the vendor cannot fill the purchasers order What typically happens in decentralized purchasing if an order exceeds a pre-established cost limit? - ANS the order must be approved by the owner or a manager Which characteristic of the ordering process is the same in large- and small-volume - ANS Approved documentation must authorized the purchase. In centralized purchasing, what document is used to inform purchasing staff that more products are needed? - ANS purchase requisition to which approve vendors should RFP's be sent? - ANS to those selling the products being ordered What is the meaning of the expression "3/15; net 30" in a purchase order? - ANS A 3% discount is given for payment within 15 days; full payment is due within 30 days. Who should receive a copy of the purchase order in a centralized operation? - ANS receiving staff The payment to be made in exchange for the promises(s) contained in a contract is called the - ANS consideration expediting may be necessary when - ANS products have bee ordered but not yet delivered guidelines that should be followed when purchasers make decisions are found in - ANS codes of purchasing ethics In smaller, independent operations, who is responsible for developing codes of purchasing ethics? - ANS managers which topic is most likely to be included in a vendors handbook? - ANS procedures for product receiving who develops a vendors handbook? - ANS restaurant and foodservice operation what policy relates to a vendor contacting a production employee without the purchasers approval? - ANS back-door selling which receiving task is not clerical or physical and requires extensive training and experience? - ANS determining quality when should a delivery invoice be signed? - ANS after verifying information against the purchase order what is the purpose of a credit memo? - ANS to correct information on delivery invoices what is a vendor statement? - ANS a summary of delivery invoice charges what is a backorder? - ANS an unavailable product on a vendors delivery invoice what is the purpose of a petty cash fund? - ANS to make relatively low-cost purchases What is the first step in a process of purchasing evaluation and improvement? - ANS develop purchasing goals What is mostly likely to be an important evaluation factor for the price-conscious purchasers? - ANS cost of products per purchase unit