Purchasing and Inventory Control Flashcards

Which purchasing method involves soliciting competitive bids from multiple vendors for large-quantity orders?

Answer: Competitive bid purchasing

Competitive bid purchasing requires vendors to submit sealed bids for specified products and quantities, with the contract typically awarded to the lowest qualified bidder.

What does the term 'par level' refer to in inventory management?

Answer: The minimum quantity of an item that should be in stock at all times

Par level is the predetermined minimum quantity of each inventory item that should be maintained in stock to ensure adequate supply between deliveries.

Which document specifies the exact quality standards, grade, size, and other requirements for products to be purchased?

Answer: Product specification

Product specifications are detailed written descriptions that define the exact quality, grade, size, brand, pack, and other requirements for each item to be purchased.

What is the primary purpose of conducting regular physical inventory counts?

Answer: To verify that actual stock levels match recorded inventory records

Physical inventory counts verify that actual quantities on hand match book inventory, identifying discrepancies that may indicate theft, waste, recording errors, or spoilage.

Which receiving practice is essential for ensuring food safety of delivered products?

Answer: Checking temperatures of refrigerated and frozen items upon delivery

Checking temperatures of refrigerated and frozen products at delivery is essential to ensure cold chain integrity and food safety compliance.

What is the economic order quantity (EOQ) concept in purchasing?

Answer: The order quantity that minimizes total inventory costs (ordering plus holding)

Economic Order Quantity is the optimal order quantity that minimizes the combined costs of ordering and holding inventory.