Fundamentals Of Business: Purchasing Quiz

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  • 1/10 Questions

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

    • The desired quality and cost of the final product
    • The skill level of the employees
    • Storage space and equipment required
    • Labour cost, selling price, and average check
    • All of the above
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About This Quiz

Explore the essentials of effective purchasing in business through this quiz. It assesses skills in budget management, quality control in procurement, and understanding of the purchasing cycle, crucial for optimizing operations and achieving financial targets in any business setting.

Fundamentals Of Business: Purchasing Quiz - Quiz

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  • 2. 

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

    • Highest price

    • Popularity of the menu item

    • Greatest value

    • Suitability for the intended use

    Correct Answer
    A. 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. 

    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?

    • $6.18

    • $4.60

    • $4.43

    • $7.90

    Correct Answer
    A. $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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  • 4. 

    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?

    • Chef

    • Purchasing Agent

    • Receiving Agent

    • Storeroom Clerk

    Correct Answer
    A. 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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  • 5. 

    Product Specifications should Include:

    • The name of the item, Price, product characteristics, allowable substitutions, form

    • The Name of the item, the name of the supplier, intended use, allowable substitutions, unit size

    • The name of the item, intended use, quality characteristics, allowable substitutions, form, unit size

    • None of the above

    Correct Answer
    A. 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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  • 6. 

    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?

    • $600 $600 $600 $600

    • $4,000

    • $48,000

    • $52,000

    Correct Answer
    A. $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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  • 7. 

    A MOBA Is:

    • Manufacturers & Operators Business Association

    • A tool used to determine the final portion cost including labour of menu items

    • Make or Buy Analysis

    • Managers Over-site & Buying Agreements

    Correct Answer
    A. 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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  • 8. 

    The “Five Rights” to Purchasing are:

    • The Right Product, The Right Quality, The Right Quantity, The Right Supplier, The Right Time

    • The Right Product, The Right Staff, The Right Quantity, The Right Price, The Right Time

    • The Right Product, The Right Staff, The Right Quantity, The Right Price, The Right Time

    • The Right Product, The Right Quantity, The Right Supplier, The Right Price, The Right Time

    Correct Answer
    A. 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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  • 9. 

    The Steps to Buying the “Right Quality” are:

    • Decide the menu concept, Create an inventory list or file, Develop product specifications

    • Determine the menu concept, Determine budget, Determine methods of preparation

    • Determine Guest Demographics, Develop menu concept, Determine budget

    • 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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  • 10. 

    Convenience foods: (maybe more than one answer)

    • Can reduce labor cost and overall portion cost

    • Are the best option for casual service restaurants

    • Can reduce receiving, storage and inventory costs

    Correct Answer(s)
    A. Can reduce labor cost and overall portion cost
    A. 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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  • Current Version
  • Jul 24, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • Oct 21, 2012
    Quiz Created by
    Hmgt
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