CFSP Purchasing and Inventory 4 — Questions and Answers
Question 1: Which of the following describes a 'cost-plus' pricing arrangement with a distributor?
- The buyer pays a fixed price regardless of market fluctuations
- The buyer pays the distributor's actual cost plus an agreed markup percentage (Correct answer)
- The distributor charges the lowest price available among all customers
- The price is set annually based on a competitive bid process
Correct answer: The buyer pays the distributor's actual cost plus an agreed markup percentage
Cost-plus pricing means the buyer pays the supplier's invoice cost plus a predetermined markup, offering transparency in pricing.
Question 2: When storing dry goods in a storeroom, items should be kept at least how high off the floor?
- 2 inches
- 4 inches
- 6 inches (Correct answer)
- 12 inches
Correct answer: 6 inches
FDA Food Code requires dry storage items to be stored at least 6 inches off the floor to allow cleaning and prevent pest access.
Question 3: A perpetual inventory system differs from a physical inventory system primarily because it:
- Records changes to inventory quantities in real time as items are used or received (Correct answer)
- Requires a full manual count of all items once per week
- Is only used for high-cost items such as meat and seafood
- Does not track variance between expected and actual inventory
Correct answer: Records changes to inventory quantities in real time as items are used or received
A perpetual system updates inventory records continuously with each receipt and issue, providing a running balance at all times.
Question 4: What is the main purpose of establishing a 'lead time' in purchasing?
- To set the maximum acceptable price for a product
- To determine when to place an order so stock arrives before running out (Correct answer)
- To identify the primary vendor for each product category
- To schedule the frequency of physical inventory counts
Correct answer: To determine when to place an order so stock arrives before running out
Lead time is the elapsed time between placing an order and receiving it, used to calculate the reorder point so stockouts are avoided.
Question 5: Which government grade indicates the highest quality for US beef purchased by a foodservice operation?
- US Select
- US Choice
- US Prime (Correct answer)
- US Standard
Correct answer: US Prime
USDA Prime is the highest quality grade for beef, indicating superior marbling, tenderness, and flavor.
Question 6: An invoice shows 10 cases of tomatoes at $18 per case, but only 8 cases were actually delivered. What should the receiver do?
- Sign the invoice as presented and order 2 more cases later
- Accept 8 cases, note the shortage on the delivery receipt, and request a credit memo from the vendor (Correct answer)
- Refuse the entire delivery until all 10 cases are provided
- Adjust the inventory records without notifying the vendor
Correct answer: Accept 8 cases, note the shortage on the delivery receipt, and request a credit memo from the vendor
The receiver should document the shortage on the delivery receipt and request a credit to ensure the operation is not overcharged.
Question 7: Which type of purchase specification includes information about intended use, quality indicators, and market form of a product?
- Technical specification
- Performance specification (Correct answer)
- Brand specification
- Design specification
Correct answer: Performance specification
Performance specifications describe what the product must do or achieve, including quality indicators and market form, rather than prescribing an exact brand.
CFSP Purchasing and Inventory 4
Which of the following describes a 'cost-plus' pricing arrangement with a distributor?