Fundamentals Of Business: Purchasing Quiz

1.

A restaurant wastes $600 each month because of poor purchasing practices. If the operations budget targets a profit of 15% of revenues, how much additional revenue must be generated by year’s end to recoup the $600 of wasted resources each month?
- A.
  
  $600 $600 $600 $600
- B.
  
  $4,000
- C.
  
  $48,000
- D.
  
  $52,000
Correct Answer
C. $48,000

Explanation
If 15% of the restaurant`s monthly revenue is $600 then
$600 / 15% * 100% = $4000 / month
Therefore, the total additional revenue that must be generated in a year would be
$4000 * 12 months = $48,000 / year

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2.

In relation to the purchasing function, the term quality refers to:
- A.
  
  Highest price
- B.
  
  Popularity of the menu item
- C.
  
  Greatest value
- D.
  
  Suitability for the intended use
Correct Answer
D. Suitability for the intended use

Explanation
In the context of the purchasing function, the term "quality" refers to the suitability of a product or service for its intended use. This means that the item or service should meet the specific requirements and standards set by the purchaser. It is important for the purchased item to be fit for its intended purpose, ensuring that it will perform effectively and efficiently.

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3.

In relation to the food service purchasing cycle, which of the following positions is generally responsible for completing an issue requisition when items are needed in food production areas?
- A.
  
  Chef
- B.
  
  Purchasing Agent
- C.
  
  Receiving Agent
- D.
  
  Storeroom Clerk
Correct Answer
B. Purchasing Agent

Explanation
The purchasing agent is generally responsible for completing an issue requisition when items are needed in food production areas. This role involves ensuring that the necessary ingredients and supplies are procured in a timely manner to support the food production process. The purchasing agent interacts with suppliers, negotiates prices, and ensures that the items meet quality standards. They work closely with the chef and other staff members to understand their requirements and ensure that the necessary items are available for production.

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4.

The “Five Rights” to Purchasing are:
- A.
  
  The Right Product, The Right Quality, The Right Quantity, The Right Supplier, The Right Time
- B.
  
  The Right Product, The Right Staff, The Right Quantity, The Right Price, The Right Time
- C.
  
  The Right Product, The Right Staff, The Right Quantity, The Right Price, The Right Time
- D.
  
  The Right Product, The Right Quantity, The Right Supplier, The Right Price, The Right Time
Correct Answer
D. The Right Product, The Right Quantity, The Right Supplier, The Right Price, The Right Time

Explanation
The correct answer is "The Right Product, The Right Quantity, The Right Supplier, The Right Price, The Right Time." This answer accurately identifies the five key factors that need to be considered when making a purchasing decision. The right product refers to selecting the appropriate item that meets the needs and requirements of the purchaser. The right quantity ensures that the desired quantity of the product is obtained. The right supplier ensures that a reliable and trustworthy supplier is chosen. The right price refers to getting the product at a fair and reasonable price. The right time emphasizes the importance of timely delivery or availability of the product.

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5.

The Steps to Buying the “Right Quality” are:
- A.
  
  Decide the menu concept, Create an inventory list or file, Develop product specifications
- B.
  
  Determine the menu concept, Determine budget, Determine methods of preparation
- C.
  
  Determine Guest Demographics, Develop menu concept, Determine budget
- D.
  
  Determine menu concept, Determine budget, Develop Product specifications
Correct Answer
A. Decide the menu concept, Create an inventory list or file, Develop product specifications

Explanation
The correct answer is to decide the menu concept, create an inventory list or file, and develop product specifications. This sequence of steps ensures that the buyer first determines the concept for the menu, then creates a list of the inventory needed for that menu, and finally develops specifications for the products to be purchased. This approach helps in efficiently planning and organizing the purchasing process, ensuring that the right quality of products is procured for the menu concept.

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6.

Product Specifications should Include:
- A.
  
  The name of the item, Price, product characteristics, allowable substitutions, form
- B.
  
  The Name of the item, the name of the supplier, intended use, allowable substitutions, unit size
- C.
  
  The name of the item, intended use, quality characteristics, allowable substitutions, form, unit size
- D.
  
  None of the above
Correct Answer
C. The name of the item, intended use, quality characteristics, allowable substitutions, form, unit size

Explanation
Product specifications should include the name of the item so that customers can easily identify it. The intended use is important to ensure that customers understand how to properly use the product. Quality characteristics help customers assess the product's performance and reliability. Allowable substitutions provide information on alternative options that customers can consider. The form of the product, such as its physical appearance or packaging, is necessary for customers to know what to expect. Lastly, the unit size is important for customers to understand the quantity or volume of the product they are purchasing.

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7.

Convenience foods: (maybe more than one answer)
- A.
  
  Can reduce labor cost and overall portion cost
- B.
  
  Are the best option for casual service restaurants
- C.
  
  Can reduce receiving, storage and inventory costs
Correct Answer(s)
A. Can reduce labor cost and overall portion cost
C. Can reduce receiving, storage and inventory costs

Explanation
Convenience foods can reduce labor cost and overall portion cost because they require less preparation time and can be easily portioned, reducing the need for additional labor and minimizing waste. Additionally, convenience foods can reduce receiving, storage, and inventory costs as they often have longer shelf lives and require less storage space compared to fresh ingredients. This can help restaurants save money on inventory management and reduce the risk of food spoilage.

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8.

A MOBA Is:
- A.
  
  Manufacturers & Operators Business Association
- B.
  
  A tool used to determine the final portion cost including labour of menu items
- C.
  
  Make or Buy Analysis
- D.
  
  Managers Over-site & Buying Agreements
Correct Answer
C. Make or Buy Analysis

Explanation
A MOBA stands for Make or Buy Analysis. It is a tool used to determine whether a company should produce a particular product or service in-house or purchase it from an external supplier. This analysis involves evaluating the costs, risks, and benefits associated with both options. By conducting a MOBA, businesses can make informed decisions about whether to make a product internally or outsource it, considering factors such as cost-effectiveness, quality control, and resource allocation.

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9.

Purchasing Products and services for a food service operation requires the responsible individual to take into consideration:
- A.
  
  The desired quality and cost of the final product
- B.
  
  The skill level of the employees
- C.
  
  Storage space and equipment required
- D.
  
  Labour cost, selling price, and average check
- E.
  
  All of the above
Correct Answer
E. All of the above

Explanation
When purchasing products and services for a food service operation, the responsible individual needs to consider various factors. They need to think about the desired quality and cost of the final product to ensure that it meets the standards and fits within the budget. They also need to take into account the skill level of the employees as certain products may require specific expertise to handle. Additionally, they should consider the storage space and equipment required to store and prepare the products. Lastly, they need to consider the labor cost, selling price, and average check to ensure profitability. Therefore, all of the above factors need to be considered when purchasing products and services for a food service operation.

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10.

Gerhard’s Burger Barn sells a premium Cheeseburger with all the fixings for $12.50. The standard Food Cost % for the item is 35% and the labor cost required to produce it is 28.2%. After food & labor costs are factored in how much money does Gerhard have leftover to pay the rest of the bills and hopefully make a profit?
- A.
  
  $6.18
- B.
  
  $4.60
- C.
  
  $4.43
- D.
  
  $7.90
Correct Answer
B. $4.60

Explanation
(standard food cost) + (labour cost) = (total expenses)
35% + 28.2% = 63.2%

So to calculate the total expenses ($)
$12.50 * 0.632 = $7.90

To calculate the profit find the difference of selling price and expenses
$12.50 - $7.90 = $4.60

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Fundamentals Of Business: Purchasing Quiz

A restaurant wastes $600 each month because of poor purchasing practices. If the operations budget targets a profit of 15% of revenues, how much additional revenue must be generated by year’s end to recoup the $600 of wasted resources each month?

In relation to the purchasing function, the term quality refers to:

In relation to the food service purchasing cycle, which of the following positions is generally responsible for completing an issue requisition when items are needed in food production areas?

The “Five Rights” to Purchasing are:

The Steps to Buying the “Right Quality” are:

Product Specifications should Include:

Convenience foods: (maybe more than one answer)

A MOBA Is:

Purchasing Products and services for a food service operation requires the responsible individual to take into consideration: