SITXINV003 Report: Purchasing and Sourcing in Hospitality Sector

This SITXINV003 report provides a detailed analysis of the purchasing process within the food and beverage department of a hospitality establishment, Cremorne Point Manor. It covers key aspects such as identifying operational needs, sourcing new suppliers, forecasting quantities, managing stock levels, and adhering to organizational purchasing procedures. The report identifies six types of goods relevant to the food and beverage department, including alcoholic and non-alcoholic beverages, housekeeping supplies, merchandise, uniforms, cleaning agents, and foods. It also outlines the forecasting methods used to calculate required quantities and compares existing suppliers with potential new sources based on price and service provisions. The report emphasizes the importance of maintaining quality standards, managing costs effectively, and ensuring a consistent supply of necessary goods to meet customer demands and maintain smooth operations within the hospitality setting. Desklib provides a platform for accessing this and other solved assignments to aid students in their studies.

SITXINV003
1

Table of Contents
Introduction.................................................................................................................................................3
TASK..........................................................................................................................................................4
Conclusion.................................................................................................................................................18
References.................................................................................................................................................19
2

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.
3

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.
4

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.
5

Figure 1: Hierarchy structure of hospitality industry, 2019
(Source: Hierarchy structure of hospitality industry, 2019)
6

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
7

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.
8

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.
9

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.
10

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.
11

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.
12