Consider the following issues that relate to Robatelli’s purchases of ingredientsand supplies,then answer the questions pertaining to its expenditure processes.As mentioned in the opening part of the Robatelli’s Pizzeria case,thereare now 53 locations throughout the greater Pittsburgh area.Each one of those restaurant locations needs an ongoing supply of the many ingredientsof pizzas and the other foods served.The raw materials each restaurant needsto make and sell pizzas and other menu items are things such as flour,salt,sugar,tomatoes,potatoes,lettuce,tomato paste,spices,meats,cheeses,andbuns,as well as supplies such as napkins,take-out packages and doggy-bagcontainers.Each restaurant must maintain an inventory of all of these items in order toproperly serve customers.However,it is a difficult balance to maintain the rightamount of each of these items.As you know from your experience in eating atrestaurants,it can leave a negative impression in your mind if the restauranthas run out of the food you intended to order.Thus,there must always beenough ingredients and supplies to meet customers’ desires.Two factors make it difficult to maintain enough inventory of food and sup-plies:predicting demand,and time or space limitations.First,it can be diffi-cult to predict customer demand for any particular day or week.The lesspredictable the stream of customers eating at the restaurant,the harder it canbe to know how much inventory of food and supplies to keep.Secondly,timeand space limit the amount of inventory a restaurant can keep.Food inven-tory is perishable,and much of it has a very short shelf life.For example,let-tuce and tomatoes may remain fresh for only a couple of days.Other fooditems,such as flour and salt,may remain usable for months.But even for itemswith a long shelf life,it is hard to keep a large inventory at a restaurantbecause of limited storage space.Most of the space in a restaurant is for cus-tomer dining and the kitchen.Robatelli’s uses a central commissary to prepare some of the ingredientsbefore they are shipped to the restaurant.For example,the individual restau-rant locations do not make dough on the premises.The flour,salt,yeast,andother ingredients are maintained,mixed,and prepared at the commissary,andthis premade dough is then shipped by truck to restaurants daily.The pizzasauce and many ingredients for sandwiches and salads are also premade at thecommissary.All of these factors taken together mean that Robatelli’s must continually bepurchasing the ingredients for pizzas and other foods,and supplies.These inven-tory items must be delivered to the commissary and then to each of the 49Robatelli’s locations to ensure that they never run out of the items needed toserve customers.Since there is a short shelf life for much of the inventory,thepurchasing takes place on a daily basis to keep the commissary and each restau-rant location properly stocked.

Required:

Describe how you believe an efficient and effective purchasing system should be organized at Robatelli’s. Consider details such as the following:

1. How would you organize the purchasing Department for the process?

How many purchasing agents should be employed?

2. Where will these purchasing agents be located?

How will the necessary information for purchasing flow between restaurants and these purchasing agents?

4. How will IT systems be used in purchasing?

5. How and when will purchased items be delivered to the restaurants?(Remember that all 49 locations are within the Pittsburgh area,and none would be more than a one-hour drive from the corporate Headquarters.)