1. Imagine you are a purchaser for a large foodservice company. Two potential

purveyors want your business. Both offer similar product lines and similar pricing.

How do you handle this situation to get the best results for your company?

2. Which approach, the perpetual or periodic inventory method, appeals more to you?

Why?

3. A fine-dining restaurant has been making every- thing from scratch for the five

years it has been open; it is the only operation in the area known for scratchcooking. The management hires a new chef who does a makebuy analysis only

to discover that she can get much better pricing on many of her products if she

buys them premade. After a tasting comparison, she discovers that the premade

products are of high quality and taste only slightly different from her own. Should

she switch to the premade products? Would your answer be different if this

decision took place when the restaurant first opened?

4. A chef locates a premade tuna salad that is nearly identical to the one she makes

from scratch in her sandwich shop. To make it from scratch, an $8.25/ hour

employee needs 20 minutes to prepare the tuna salad. The ingredients cost $12.18

and yield ten 4-oz servings. The chef can purchase the pre- made tuna salad at

$26.99 for a 5 tub. Calculate the cost per portion for the scratch-made and the

premade versions. If cost were the only factor, should the chef make or buy this

product?

5. What three factors are most important when selecting a purveyor?

6. Describe the difference between open bidding and sealed bidding.

7. A purchaser uses the periodic inventory method and orders food every two weeks.

Her chef needs 220 sugar for the next two weeks and, per company pol- icy, she

must target to have 50 sugar left in inventory at the end of the two weeks. If she

currently has 70 sugar on hand, how many pounds of sugar should she order? If

the sugar comes in 25 bags, how many bags does she need to order?

8. A purchaser uses the perpetual inventory method. Her chef requests a par stock

of 200 sugar because the chef uses 23 of it each and every day. The purchaser

needs to place an order two days in advance of delivery with her dry goods

purveyor. Her chef also requests a one-day supply of all nonperishables be treated

as a safety netthats a 23 safety net for the sugar. From this information,

calculate the reorder point and reorder quantity for sugar.