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Lecture Purchasing: Selection and procurement for the hospitality industry (8th edition): Chapter 9 - Feinstein, Stefanelli
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Lecture Purchasing: Selection and procurement for the hospitality industry (8th edition): Chapter 9 - Feinstein, Stefanelli
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Chapter 9 - The optimal amount. After completing this chapter, students will be able to: Calculate the correct order quantities and order times using the par stock, Levinson, and theoretical methods; determine the optimal inventory level; explain the benefits and problems of using only the theoretical method for determining inventory levels. | The Optimal Amount 9 YOU SHOULD BE ABLE TO: Calculate the correct order quantities and order times using the par stock, Levinson, and theoretical methods. Determine the optimal inventory level. Explain the benefits and problems of using only the theoretical method for determining inventory levels. OPTIMAL INVENTORY LEVEL A principle objective of inventory management is maintain only the necessary amount of products to serve guests without running out of anything, but not to have so much that the products suffer from spoilage or incur other storage costs. Changed Title to reflect section in book, EGM CORRECT ORDER SIZE AND ORDER TIME Par Stock Approach – the maximum amount of a product you want to have on-hand; order just enough to bring the stock to par Levinson Approach – takes into account forecasted sales, portion sizes and yield percentages planning an order Theoretical Approach – takes into account storage costs, carrying costs and ordering costs when planning purchases Added | The Optimal Amount 9 YOU SHOULD BE ABLE TO: Calculate the correct order quantities and order times using the par stock, Levinson, and theoretical methods. Determine the optimal inventory level. Explain the benefits and problems of using only the theoretical method for determining inventory levels. OPTIMAL INVENTORY LEVEL A principle objective of inventory management is maintain only the necessary amount of products to serve guests without running out of anything, but not to have so much that the products suffer from spoilage or incur other storage costs. Changed Title to reflect section in book, EGM CORRECT ORDER SIZE AND ORDER TIME Par Stock Approach – the maximum amount of a product you want to have on-hand; order just enough to bring the stock to par Levinson Approach – takes into account forecasted sales, portion sizes and yield percentages planning an order Theoretical Approach – takes into account storage costs, carrying costs and ordering costs when planning purchases Added Graphic, EGM PAR STOCK APPROACH Most small operations utilize this model Utilized when buyer accepts ordering procedures and delivery schedules of seller Method: Decide on order amount needed to bring product stock level up to par Account for banquets, safety stock, and stock needed between order and delivery time Reevaluate par stock levels often LEVINSON APPROACH Accept suppliers’ ordering procedures and delivery schedules Determine best time to order (dairy products may be ordered daily) Forecast the amount of product that will be needed between deliveries Calculate order size Adjust for stock on hand, etc. Revise often LEVINSON APPROACH (CONT.) Based on historical data Forecast expected number of guests Forecast orders of specific menu items based on popularity index Determine raw pounds of each ingredient needed for projected sales Calculate portion factor Calculate portion divider LEVINSON APPROACH (CONT.) Portion Factor – e.g., 16 divided by the number of ounces needed for
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