CFSP Purchasing and Inventory 2 — Questions and Answers
Question 1: Which purchasing method involves buying a set quantity of product whenever stock falls below a predetermined level?
- Par stock system (Correct answer)
- Perpetual inventory system
- Just-in-time purchasing
- Blanket purchase order
Correct answer: Par stock system
The par stock system triggers a purchase order when on-hand quantities drop below the established minimum (par) level.
Question 2: A foodservice operation receives a shipment of ground beef that feels warm to the touch. What is the FIRST action the receiver should take?
- Accept the delivery and refrigerate immediately
- Check the internal temperature with a calibrated thermometer (Correct answer)
- Reject the entire shipment without further inspection
- Contact the health department
Correct answer: Check the internal temperature with a calibrated thermometer
Temperature must be verified with a calibrated thermometer before making an accept/reject decision.
Question 3: Which of the following BEST describes an 'open market' purchasing method?
- Long-term contracts with a single approved vendor
- Competitive bidding among multiple suppliers for each order (Correct answer)
- Purchasing through a group buying cooperative
- Using a standing order with automatic weekly delivery
Correct answer: Competitive bidding among multiple suppliers for each order
Open market purchasing involves soliciting competitive bids from multiple suppliers, typically for each individual purchase.
Question 4: When calculating the cost of goods sold (COGS), which formula is correct?
- Opening inventory + Purchases – Closing inventory (Correct answer)
- Closing inventory – Opening inventory + Purchases
- Purchases – Opening inventory + Closing inventory
- Opening inventory – Purchases + Closing inventory
Correct answer: Opening inventory + Purchases – Closing inventory
COGS = Opening inventory + Purchases – Closing inventory measures how much food was actually used in the period.
Question 5: A distributor offers a 2/10 net 30 payment term. What does this mean?
- A 2% discount if the invoice is paid within 10 days; full amount due in 30 days (Correct answer)
- A 10% discount if paid in 2 installments over 30 days
- A 2% surcharge applies after 10 days, up to 30 days
- Payment of 2 installments is due within 30 days
Correct answer: A 2% discount if the invoice is paid within 10 days; full amount due in 30 days
2/10 net 30 means the buyer earns a 2% discount by paying within 10 days; otherwise the full invoice is due in 30 days.
Question 6: Which document is used to formally notify a supplier of items being returned due to quality issues?
- Purchase order
- Credit memo
- Debit memo (Correct answer)
- Receiving log
Correct answer: Debit memo
A debit memo is issued by the buyer to notify the supplier that returned goods have been charged back to the supplier's account.
Question 7: What is the primary purpose of using a specification sheet (spec sheet) in purchasing?
- To record actual quantities received from each vendor
- To define the exact quality standards required for each product (Correct answer)
- To compare prices from competing distributors
- To schedule delivery dates for standing orders
Correct answer: To define the exact quality standards required for each product
Specification sheets establish precise quality, size, grade, and other standards so every vendor bids on identical product criteria.
CFSP Purchasing and Inventory 2
Which purchasing method involves buying a set quantity of product whenever stock falls below a predetermined level?