Restaurant owners and caterers often ask, ‘Is it better purchasing food in bulk or to order as I need it?” It is important to understand the types of food purchasing as there are advantages and disadvantages to both methods.
RECIPE FOR SUCCESS INGREDIENT CARDS
Ingredient 3: Food Purchasing
Question:
What are the types of food purchasing?
Answer:
Some restaurant owners and caterers order more frequently and in smaller quantities, a necessary procedure for stocks that have a short shelf life, eg perishable foods. If there is a lack of storage space and goods are available from suppliers at short notice, then this method can be satisfactory.
You can be attracted to purchasing food in bulk because of the apparent benefits. Quantity discounts are sometimes offered by suppliers as an inducement to place large orders. Bulk-buying often appears to be, and in fact, maybe an attractive proposition. However, it loses its attraction if the goods cannot be resold quickly.
Below are some of the advantages and disadvantages of buying smaller quantities:
Advantages:
- Purchasing for very short periods makes it easier to calculate requirements.
- Reduces the amount of money tied up in stock.
- Reduces risk of deterioration or obsolescence.
- Avoids a loss if there is a reduction in prices.
- Lower storage and insurance costs.
Disadvantages:
- Smaller stocks could lead to customer ‘walk-outs’ if deliveries are not received in time.
- Buying in smaller quantities may lead to loss or reduction of discounts.
- Higher freight costs because of more deliveries.
- Receiving and handling overheads are increased by many small orders.
- Production schedules may be disrupted by delivery delays
All businesses make purchases of one kind or another whether it is raw materials or simply office supplies. Understand purchasing and stock control – manage this asset and free valuable capital.
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