SITXINV003: Purchasing Goods and Services for Food and Beverage Operations

This report explores the purchasing process for a food and beverage department in a hospitality setting. It covers identifying product needs, forecasting demand, sourcing suppliers, negotiating prices, and ensuring quality. The report includes a detailed analysis of existing and potential suppliers, along with a purchase order for the required goods.

SITXINV003
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Table of Contents
Introduction.................................................................................................................................................3
TASK..........................................................................................................................................................4
Conclusion.................................................................................................................................................18
References.................................................................................................................................................19
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Introduction
Purchasing is the procedure of buying variety of goods and services. The purchasing process can
different from one organisation from another and there are some general key components. In
hospitality industry, the purchasing department includes placing new orders required by all hotel
division; keep all records of all purchase goods, signing the contract and agreement for the
purchasing products.
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TASK
1. Choose an area of operations relevant to your job role which may include:
Food and beverage department is selected for this report which involved in processing raw food
materials, distribution and packaging the food items. In Cremorne Point Manor, my role is a food
and beverage manager in which I am working for managing and maintaining the stock of the
business. They are managing all the budget and financial statement for the whole process of
purchasing drink and food items. In this, purchasing involves sourcing, transporting and ordering
the major products and services (Jahromi, et. al., 2015). My role is to provide customer services
in restaurants, cocktail bars, and other establishments’ areas. The food and beverage manager
role is to plan, forecast and controlling the orders of the hospitality industry. The finance-related
issues and problems are also managed under the manager.
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2. Provide a brief overview of the operational area, the hierarchy of command and the
basic procedures in place for sourcing new supplies and suppliers.
The operational area work for producing the products, maintain the quality of food items and
develop effective services. The operational department is one of the main functions in the
Cremorne Point Manor along with finance, human resource, marketing and supply chain
management. This organizational department needs to manage both the strategic and regular
production of products and facilities (Mwangi, et. al., 2016). The hierarchy of hotel management
is a chain of command in which each link are responsible for reporting towards next level which
ensures about that Cremorne Point Manor operations are run smoothly. The basic process of
placing the sourcing new suppliers and suppliers of the Cremorne Point Manor followed is that
firstly they identify the needs and requirements of customers. After that, the managers select the
goods and services which are demanded by their clients and then they are negotiating with their
suppliers regarding the appropriate price which is best suitable for their budget.
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Figure 1: Hierarchy structure of hospitality industry, 2019
(Source: Hierarchy structure of hospitality industry, 2019)
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3. Identify and list 6 different types of goods relevant for your area of operations which
need to be purchased in the near future.
There are six types of goods which are relevant for the food and beverage department and it need
to be purchased in the near future that are described as under:
 Alcoholic and non-alcoholic beverages
 Housekeeping supplies
 Merchandise
 Uniforms
 Cleaning agents and chemicals
 Foods
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4. List the specific requirements which require the purchase of these goods Provide details
for how you have identified these requirements including consideration of any existing
stock you have in storage.
For managing the functions of Cremorne Point Manor, the manager requires to identify the
specific requirements that are necessary to purchase goods. It is required for a hotel manager is
to identify the required goods which are necessary for upcoming functions and activities. Also,
they need to recognize the special customers’ requirements that always prefer their hotel services
every time (Al-Msallam, 2015). The manager analyzes their regular clients’ needs and wants as
per this they are developing effective plans and strategies to satisfy them. The existing stock
materials are helpful for them to fulfill their guest needs in the events and other upcoming
functions.
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5. Contact the relevant department heads/ supervisor or persons relevant for these product
needs and clarify concise specifications and quantities required. Detail with whom you have
communicated and what was determined.
For identifying the required products, the relevant department head is purchasing manager whose
main role is to maintain all existing stocks, food and beverage, drinks, food items, and alcoholic
products. The purchasing department is responsible for managing all the existing stock and they
are supervising the goods and items which is required for further events to an organization. such
purchasing products include alcoholic and non-alcoholic beverages, housekeeping supplies,
merchandise, uniforms, cleaning agents and chemicals and foods. These products specify that it
must be legal and quality standard is good which attract guest and satisfied their needs and
wants. Products should be fresh, quality-based, appropriate size and weight are the specifications
(Rauch, et. al., 2016). Hotel stock purchasing manager required to keep 50% stock in advance
which manages their services and does not dissatisfy their customers. For this, I need to
communicate with the purchasing manager for such products which are required for future needs
and requirements.
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6. Which forecasting methods form the basis for calculating the quantities required? How
is the choice of forecasting method established?
There are various forecasting methods which are being used for evaluating the quantities
required such as straight line, moving average, simple regression and multiple linear regressions.
These are the forecasting ways that are being used by the financial analysts so that the future
revenues, expenses as well as capital costs can be determined. It also enables in analysing the
nature of variables that which is dependent variable and which one id independent. The growth
rate with that of repeated forecasts can also be determined through these methods (Ma, et. al.,
2016). The choice of forecasting method in Cremorne Point Manor can be established through
the following ways:
· Determining the purpose of forecast: Through this technique the accuracy can be maintained
as it helps in determining the ways through which inventory can be controlled and safety in the
stocks can be maintained.
· Both short run as well as long run trend lines for preceding years will be analysed so that the
prediction regarding future revenues and expenses can be done (Buis, et. al., 2015).
· The minimum tolerance level of error for the data is determined so that the actual data for the
analysis can be selected.
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7. Identify the stock on hand, list the quantities available and indicate whether these need
to be considered in your purchasing order.
The stock on hand in the organization will be availability of closing stock which is available with
Cremorne Point Manor. The closing stock can be determined as the stock which is available with
the organization during the end of financial year. The quantities that will be available are:
Housekeeping Supplies: 10 units
Merchandise: 15 units
Uniforms: 35 units
Cleaning Agents and chemicals: 8 units
Foods: 30 Units
Yes, the above mentioned stock quantities will be considered in the purchasing order of firm a
through this only the levels of inventory within the firm will be maintained. The purchase order
is basically the commercial document that is issued by the buyer so that the indications of sold
products and services can be determined (Buis, et. al., 2015). Through this technique the
Cremorne Point Manor will also be able to control the purchasing of product as well as services
from the external suppliers. The computer systems including purchase order have made the
processes of purchasing more efficient and also help in better inventory and tracking of
payments.
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8. Determine the price limitations for 3 products you have listed on your purchase list using
job costings from your organisation. How does this affect the maximum price you can pay
for the purchase of the product? Why? Are there any processes for this in your workplace
or in the RTO? What are these?
The price limitations for the products such as foods, uniforms and merchandise are related to the
sellers as they are the one who influences prices of Cremorne Point Manor in the real world. The
price limitations which are set for the products affects the minimum price as the productivity of
the product as well as image in the financial market gets impacted. Yes, there is the provision of
supervising and monitoring in the organization culture itself which determines the effects of
maximum pricing and price limitation.
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9. Write the purchasing list based on your requirements and the stock on hand.
As per the requirement the following items will be addressed for the purchasing:
 Housekeeping supplies
 Merchandise
 Uniforms
 Cleaning agents and chemicals (Seddighi, et. al., 2018)
 Foods
Alcoholic and non-alcoholic beverage
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10. List the suppliers who are used by your establishment to source these products from.
The suppliers that are associated in relation to the source the products and the other raw materials
majorly include:
 Supplier X
 Supplier Y
However, it has been addressed that the prices of the product offered by the supplier X is
comparatively low as per the prices of the product being offered by the supplier Y. As such the
company is focusing on the purchase of the products from supplier X (Buis, et. al., 2015). This is
done mainly due with the view to attain suitable command on the prospects of the cost.
Purchasing similar product at low cost will assist in gaining of the suitable efficiency. As such,
profit margin of the company can also be enhanced.
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11. Identify the organisational purchasing procedures which form the basis for
purchasing goods and sourcing suppliers in your establishment and provide the details for
these.
The company concern is adopting and following a systematic and suitable procedure taking into
consideration the needs of all departments (Seddighi, et. al., 2018). For such purpose the
company concern is keeping adequate and suitable command on the recording of all the
particulars in relation to the resources or material that are required. The company concern is
following the series of the step in this respect. Some of the steps in this respect majorly and
primarily include:
Step 1: Identification of the needs
Step 2: Sourcing
Step 3: Focusing on the establishment of the contract
Step 4: Delivering
Step 5: Making request for the payment
With the adoption of the suitable measures and methods the company concern can attain suitable
command leading to better conformation of the factors of demand and supply (Buis, et. al.,
2015).
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12. Source 2 suppliers (other than those you currently use) in your area or region and
obtain information for prices and service provisions for the 6 products you have identified
for purchasing
SNo. Items (Monthly) Price ($)
1. Alcoholic and non-alcoholic beverages 7000
2. Housekeeping supplies 1500
3. Merchandise 2000
4. Uniforms 1000
5. Cleaning agents and chemicals 1750
6. Foods 5000
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13. Using the table below enter the details for product specifications and prices from your
existing supplier and those from your 2 new sources.
Price ($)
Conditions e.g. delivery
time frames
Availability
Account Requirements
Payment terms
Item/
Product
Qty In
Stock
Purchas
e Qty
Specifi
cation
Compa
rable
size/Qt
y/Quali
ty
Exis
t.
X Z Existing
Supplier
Supplier
X
Suppl
ier Z
Alcoholic
and non-
alcoholic
beverages
750 ml
bottle
of each
brand
750 ml Freshne
ss and
weight
7000 6700 6500 Delivery Delivery
on time
Deliv
ery is
late
somet
ime
Housekeepi
ng supplies
50
equipm
ent of
housek
eeping
25 extra
equipme
nt
Strong
and
appropr
iate
size
1500 1000 1250 Provide
good
price
Good
price
Not
provid
e
Merchandis
e
200-
500
mercha
300
merchan
dise
Quality
based
2000 1500 1000 Always
available
Great
Availabil
ity
Somet
ime
Avail
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ndise ability
Uniforms 100
uniform
s for
staff
membe
rs
50
uniforms
Fitting
should
be great
1000 500 700 Cash
sales
Take
payment
after few
days also
Cash
sales
Cleaning
agents and
chemicals
20-30 More
than 10
required
Standar
ds
agents
1750 1600 1750 Fixed
payment
Negotiat
e the
price
Fixed
rate
Foods 200
differen
t types
of food
items
Required
more
than 100
Standar
d
quality
5000 4500 5000 Supplies
products
on time
On time
delivery
Deliv
ery is
good
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14. Analyze and compare the prices and conditions and provide an overview of your
findings
From the above table, it can be analyzed that there is six purchasing product which is required by
Cremorne Point Manor for the upcoming future period. This includes alcohol and non-alcoholic
products, foods, cleaning agents and chemical, uniforms of staff members, merchandise and
housekeeping supplies. it can be examined that supplier X provides the best suitable and lower
price of each product so hotel requires to purchase their items and products from supplier X. on
the other hand, supplier Y charge a high price for all the merchandise which is not suitable for
the organization budget. In this, they are analyzing the best supplier who is providing them an
accurate price which is not creating a major impact on their budget. Supplier X is taken cash
after some time if they know the company very well and they have a relation with them for a
long time (Wang, et. al., 2015). But supplier Y is new and they are accepting money on delivery
time in cash.
For this analyzing, it can find out that alcoholic products are more in pricing because it is
expensive and it is hard to keep such type of items in the store in a better manner without any
damage. Staffs uniforms are required for the Cremorne Point Manor because newly appointed
staff members are entered in the hotel for a different post. This should be clear that all the
uniform is manufacture by the supplier as per the designation of an employee because uniforms
are different from every position employee (Cheng, et. al., 2019). This will describe their
designation within an organization. At last, it can be analyzed that supplier X is selected by the
company because they deliver all product on time along with the best price.
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15. Conduct an assessment of the quality of goods for the suppliers of goods identified in
Question 14. List the methods you will employ to do this to ensure you will get quality
supplies. Your responses need to include reliable processes to ensure quality will be
ensured.
Quality is an essential part of the supplier which makes them capable of supplying good quality
products and services. Cremorne Point Manor purchase different types of products and items
which are required for them in the future time. For this, they are selected supplier X who are
delivering quality based goods at a reasonable rate (Davis, et. al., 2018). This will manage and
maintain their budget in a better manner and by this, they can easily fulfill all the requirements of
their customers or guests. There are six goods which are delivered by Supplier X to the
organization such as alcohol, merchandise, foods, uniforms, cleaning agents and chemicals, and
housekeeping supplies. The quality should be good of such items which are checked and inspect
by purchasing manager of the Cremorne Point Manor by using various methods which will make
sure about their supply quality in a proper way.
The purchasing manager is using inspection technique which is one of the critical parts of
measuring the quality and for small operations; random product testing can be considered an
effective tool. There are various software and program is helpful in doing such type of
inspections. This will help in analyzing the quality of products which are delivered by suppliers
in a better manner (Fisher, 2015). Along with this, total quality measurement is an effective
method which can be used for analyzing and evaluating the quality of each product in a better
manner while delivering these products by suppliers. There are different techniques which are
used for measuring and evaluating the quality of a variety of products that are purchased by the
manager. Such methods are helpful in ensuring the quality of the products in a better manner by
using inspection and total quality management. These techniques assist in providing the best
quality standard goods and items.
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16. Take your findings to your trainer or Supervisor and discuss the options for further
price negotiations. What has been discussed and determined, and how does this fit in with
the requirements established in Question 11?
In this, managers are discussing with the prices of products with the trainer and supervisors who
are fix the final report sheet of the item. It can be analyzed that the purchasing manager plays an
important role in maintaining and managing the budget of an organization by purchasing a
variety of products which are required at a reasonable price. It is required for the purchasing
manager is to negotiate with the suppliers on the different items and products (Pascual-Miguel,
et. al., 2015). This is necessary for them is to choose the best quality and standard products that
are best suitable for the status of an organization. For this, they need to argue with the selected
supplier is to fix a reasonable rate that is under their budget plan.
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17. Write the purchase order(s) following the analysis and discussion with your trainer and
specify the order of priority according to the needs identified in Question 4.
The purchasing manager is responsible for all the functions and roles of the organization where
they are manage existing stocks and also identify the requirement of products which are
necessary for maintaining and satisfying the customers’ needs and wants. the purchasing
manager is developing the list of products which are required for Cremorne Point Manor for the
future needs such as alcoholic and non-alcoholic items, merchandise, foods, cleaning agents and
chemical, uniforms and housekeeping supplies (Wongleedee, K., 2015). The managers are
discussing such purchasing things with their trainers and also specify the priority order which
must be required for the customers. This includes alcoholic and non-alcoholic products which are
demanded by most of the guest who is staying in the hotel. There are several guests which are
needed the only alcoholic item so hotel should full the stock of alcohol for satisfied their users.
Sometimes they are keeping them for the upcoming future event which is conducted in their
organization.
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18. Draft emails for each supplier you have determined for sourcing your supplies and
inform each supplier of the requirements and specifications you have determined. Ensure
the details of your organisation and the supplier clearly feature in the email including
contact details, salutation, dates/timelines, etc. Attach the relevant purchase order(s) for
each supplier as relevant.
Date: 10/9/2019
Cremorne Point Manor
Sydney, Australia
Contact No. 10234-45643
Dear supplier
I want to inform you that I need to some products which should be good in quality and standard.
Items are alcoholic and non-alcoholic products, merchandise, housekeeping supplies, foods,
cleaning agents and chemicals and uniforms for staffs. I need all the fresh products and alcohol
weight and size should be appropriate. The quality of goods should be standard and quality must
be high. Please deliver all the required products and items within a week otherwise we cancel the
order.
We will provide cash in hand in term of payment. We hope you will deliver all the items on time
with safely and securely without any damage. The purchase order has been attached in this mail.
Thank you
Purchasing manager
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Conclusion
On the above-mentioned report, it can be analyzed that purchasing goods are essential for an
organization because these are helpful for them in order to satisfy the requirements of customers.
The company keeps stock of all important items which are necessary for the current and future
time period and this will gain the attention of a large number of customers towards their services.
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References
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gender and product type on online purchasing. Journal of Business Research, 68(7),
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