• Test Prep
• 60

This preview shows pages 1–14. Sign up to view the full content.

This preview has intentionally blurred sections. Sign up to view the full version.

How Much To Buy? How many pounds of fruits must you purchase to make 200 smiling fruit plates like this?
Determining the Ordering Needs Main Tool? -The menu Other factors: Current inventory Level of preparation required Coordination of efforts between departments Forecasting sales volume

This preview has intentionally blurred sections. Sign up to view the full version.

Determining Quantity to Order 1. Par Stock Approach (Min/Max) p. 76 Minimum (Par level) - least no. of item that should be in stock at any one time Also called “Reorder Point” (ROP) Maximum - highest no. of items that should be in storage at any time
Considerations for establishing Par Levels (p. 76) Sales projections Lead time # deliveries per week Storage space Money (credit) Cost of items Perishability / shelf life Exclusively focuses on Par Level Does not consider cost of Food, storage, ordering

This preview has intentionally blurred sections. Sign up to view the full version.

Quantity to Order 2. Levinson Method (p 77-78) Based on: consumed portion size (PF) and related item’s sales volume . Portion Factor (PF) # portions (svg) from a given product (sum) Total weight = PF Amount one serving
PD (portion Divider) # portions available after the item’s edible yield is taken into account . PF x Ingredients edible yield % = PD Items’ Usage = Order Size (Qty) Ingredient PD See activities (p. 79)

This preview has intentionally blurred sections. Sign up to view the full version.

Levinson Method You calculated 2,175 boneless, 6-oz chicken breast are needed for the next period. 1. Determine the raw pounds of ingredient needed? PF = Raw amount = 16 oz = 2.67 amt in 1 svg 6 oz PD = PF x Ingredient edible yield% 2.67 x 80% = 2.14
Once the PF and PD are calculated, determine the order size. Order = # customers (servings) = 2,175 = 1016.355 lbs Size Ingredient’s PD 2.14

This preview has intentionally blurred sections. Sign up to view the full version.

Determining Qty to Order 3. Economic Order Quantity (EOQ) - calculated considering order cost, usage, item cost, and storage cost Calculated in 2 ways: (p. 80-81) EOQ in dollars EOQ in number of units Best used for: Large quantities Non-perishable items Low turnover items When storage space is sufficient
Quantity to Purchase Guided by Forecasting – art or science of estimating future events Based on: 1. Historical Records- – written accounts of previous events (sales record, census sheet, etc) 2. Forecasting Models- – mathematical formula to predict future needs.

This preview has intentionally blurred sections. Sign up to view the full version.

Forecasting Models Time series model – assumes that actual occurrences follow an identifiable pattern over time 1. Moving average Uses a repetitive process for developing a trend line Used only on the same menu item 2. Exponential smoothing - decreasing set of weights is used, giving recent values more weight than older ones Only data required are wt, most recent forecast, and most recent actual value Choose model that is suitable for particular situation
Moving Average Using a 3-day moving average, forecast the expected sales for chicken on Fri and Sat.

This preview has intentionally blurred sections. Sign up to view the full version.

This is the end of the preview. Sign up to access the rest of the document.
• Spring '12
• ewr
• Biochemistry, AP, Associated Press, College football, Bowl Championship Series, Slayer

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern