storing and issuing control process in hotels

Storing and issuing control
The standards established for storing food should address five principal concerns:

1. Condition of facilities and equipment
2. Arrangement of foods
3. Location of facilities
4. Security of storage areas
5. Dating and pricing of stored foods
Condition of Facilities and Equipment
The factors involved in maintaining proper internal conditions include temperature, storage containers, shelving, and cleanliness. Problems with any or all of these may lead to spoilage and waste. It should be noted that all states and many municipalities have sanitation and health codes that must be followed by all foodservice facilities. These codes specify storage temperatures, storage containers, and storage procedures, among many other requirements such as hot water temperatures, sanitation requirements, and so on. Inspectors regularly visit establishments and grade them on their adherence to the codes. It is thus imperative that foodservice employees have a detailed knowledge of sanitation and health codes for their particular areas.

One of the key factors in storing foods is the temperature of the storage facility. This is particularly important for perishables. Food life can be maximized when food  is stored at the correct temperature and at the proper level of humidity. The food controller should occasionally check the temperature gauges on the refrigerated storage facilities to see that the appropriate temperatures are being maintained. The temperatures that follow are generally accepted as optimum for storing the foods indicated:

Fresh meats: 34 to 36 F
Fresh produce: 34 to 36 F
Fresh dairy products: 34 to 36 F
Fresh fish: 30 to 34 F
Frozen foods: 10 to 0 F

If temperatures are permitted to rise above these levels, shelf life is shortened and the risk of food spoilage is increased for perishables. Proper temperature can also be a key factor in preventing spoilage of non perishables. Storage facilities for staple food products should usually be room temperature, approximately 65 to 70 degrees F. Sometimes, particularly in older establishments, staples are kept in facilities that are either too warm because of their proximity to hot stoves or steam pipes running through the ceiling, or too cold because they are located in unheated parts of a building. Although the degree of risk is not as great with staples, it should be remembered that all foods are ultimately perishable and that the shelf life of food is increased by storage at proper temperatures.

Storage Containers
In addition to maintaining foods at proper temperatures, care must be given to storing them in appropriate containers. Many staples are purchased in airtight containers, but offers are purchased in unsealed containers—paper bags, boxes, and sacks—which are susceptible to attack by insects and vermin. Whenever practicable, products purchased in unsealed packages should be transferred to tight, insect proof containers. In the case of perishables, both raw and cooked, care should be given to storing them in whatever manner will best maintain their original quality. Many raw foods, such as apples and potatoes, may be stored as purchased for reasonable periods; others, such as fresh fish, should be packed in shaved ice. In general, cooked foods and opened canned foods should be stored in stainless steel containers, either wrapped or appropriately covered.

For perishable foods, shelving should be slatted to permit maximum circulation of air in refrigerated facilities. For non perishables, solid steel shelving is usually preferred. At no time should any food product be stored on the floor. Appropriate shelving raised a few inches above the floor level should be provided for larger and heavier containers.

Absolute cleanliness is a condition that should be enforced in all food storage facilities at all times. In refrigerated facilities, this will prevent the accumulation of small amounts of spoiling food, which can give off odors and may affect other foods. In storeroom facilities, it will discourage infestation by insects and vermin. Storerooms should be swept and cleaned daily, and no clutter should be allowed to accumulate. A professional exterminator should be brought in on a regular basis to prevent rodents and vermin from reaching population levels large enough to cause damage and disease.
Aims of storing control

Arrangement of Foods
The factors involved in maintaining an appropriate internal arrangement of foods include keeping the most-used items readily available, fixing definite locations for each item, and rotating stock.

Keeping the Most-used Items Readily Available
It is usually helpful to arrange storage facilities so that the most frequently used items are kept closest to the entrance. Although it has no effect on spoilage or theft, this arrangement does tend to reduce the time required to move needed foods from storage to production and thus tends to reduce labor costs.

Fixing Definite Location
Each particular item should always be found in the same location, and attention should be given to ensuring that new deliveries of the item are stored in the same location. All too often, one product is stored in several locations at once (for example, six cans on a shelf and two partially used cases in two other areas). This increases the chances for over purchasing, spoilage, and theft. In addition, it makes difficult the monthly process of taking a physical inventory. Incidentally, separate facilities for storage of different classes of foods should be maintained whenever practicable and possible. Eggs, for example, should not be stored with fish, cheese, or other foods that give off odors, because their shells are quite porous and they will absorb flavors from other foods. Fish should always be stored in separate facilities.

Rotation of Stock
The food controller must establish procedures to ensure that older quantities of any item are used before any new deliveries. The procedure used to do this is known as the first-in, first-out method of stock rotation, commonly called FIFO in the industry. The steward and staff must be held responsible for storing new deliveries of an item behind the quantities already on hand, thus ensuring that older items will be used first. This reduces the possibilities for spoilage. If this procedure is not followed and those who store foods are permitted to put new food in front of old food on shelves, the chances are increased that the older items will spoil before they are used. Ensuring that stock rotation takes place is particularly important with perishables, but it should not be neglected with non perishables.

Location of Storage Facilities
Whenever possible, the storage facilities for both perishable and nonperishable foods should be located between receiving areas and preparation areas, preferably close to both. Such locations facilitate the moving of foods from the receiving areas to storage and from storage to the preparation areas. A properly located storage facility will have the effect of:
1. Speeding the storing and issuing of food
2. Maximizing security
3. Reducing labor requirements

All too often, storage facilities are located in areas that are usable for other purposes. This may not be a wise policy, particularly if temperature, security, and sanitary conditions are inadequate and problems develop that result in unwarranted costs.
Dry storage areas should be sealed to reduce the risk of infestation. Obviously, it is impossible to seal an area if its location is susceptible to rodents.

Food should never be stored in a manner that permits pilferage. That is another reason for moving foods from the receiving area to storage as quickly as possible. Once in storage, appropriate security must be maintained at all times. A store room for staple food products should never be left open and unattended. Employees should not be permitted to remove items at will. Typically, a storeroom is kept open at specified times for specified periods well known to the staff and is otherwise closed to enable the storeroom clerk to attend to other duties. When the storeroom is closed, it should be locked, and the single key should be in the storeroom clerk’s possession. In such cases, one additional “emergency” key
is usually kept by the manager or in the office safe. Security is also an important consideration in storing perishables, particularly in the case of high-cost items such as meat and fish. The importance of security obviously increases with the value of the items stored. It is sometimes advisable to establish separate control procedures for steaks, liquor, and other high-cost items.

Dating and Pricing
It is desirable to date items as they are put away on shelves, so that the storeroom clerk can be certain of the age of all items and make provisions for their use before they can spoil. Of particular concern
are items that are used infrequently. The storeroom clerk should visually check the stock frequently to ascertain which items are beginning to get old and then inform the chef, so that items can be
put on the menu before they spoil. In addition, all items should be priced as goods are put away, with the cost of each package clearly marked on the package. Following this procedure will greatly simplify issuing, because the storeroom clerk will be able to price requisitions with little difficulty. If items are not priced as they are put away, the storeroom clerk will waste considerable time looking up prices when goods are sent to the kitchen. Computer users need not price goods if the program and inventory cards already have this information. As illustrated later in this chapter, the latest prices are recorded on inventory records, enabling the steward to easily calculate the cost of goods issued.

Record Keeping for Issued Foods

Directs are charged to food cost as they are received, on the assumption that these perishable items have been purchased for immediate use. Theoretically, these foods will be moved to appropriate
facilities in or near the kitchen and will be used entirely in food preparation on the day they are received. In practice, this is not normally the case. Some of the directs received on a given day are likely to be left over and used the following day; in fact, most establishments purposely purchase more than one day’s supply of many directs. Although this greatly simplifies the record keeping associated with determining the cost of directs, it does introduce some inaccuracy in the records maintained. Establishments that determine daily food costs use the total dollar figure in the “Food Direct” column on the Receiving Clerk’s Daily Report as one component of the daily cost of food. This is based on the presumption that all directs received on a given day have been consumed and should thus be included in food cost for that day. Because this is not strictly true, these daily costs tend to be artificially high on days when all directs received have not been consumed and artificially low on days when directs included in costs for previous days are actually being consumed. For record-keeping purposes, then, directs are treated as issued the moment they are received, and no further record of particular items is kept. The alternative is to follow an issuing procedure similar to that described for stores in the next paragraph, which requires significant additional time and labor. Finally, it should be noted that waste, pilferage, or spoilage of directs will result in unwarranted additions to food cost figures.

The food category known as stores was previously described as consisting of (1) staples and (2) tagged items, primarily meats. When purchased, these foods are considered part of inventory until issued for use and are not included in cost figures until they are issued. Therefore, it follows that records of issues must be kept in order to determine the cost of stores. For control purposes, a system must be established to ensure that no stores are issued unless kitchen personnel submit lists of the items and quantities needed.

form filled in by a member of the kitchen staff. It lists the items and quantities of stores the kitchen staff needs for the current day’s production. Each requisition should be reviewed by the chef, who

Intra unit transfer

Food and beverage transfer
 we assume that a restaurant purchases, receives, stores, and issues food for use in one kitchen in which all production is accomplished. By doing so, we have quite purposely ignored the existence of a number of possible complications, which will be useful to consider at this point. For example, even in small restaurants, food production in the kitchen may require the use of certain beverage items, such as wines and liquors, not purchased specifically for kitchen use. Conversely, many establishments purchase some food items, knowing that they will be used at the bar for drink production. Whole oranges and lemons, as well as heavy cream, are good examples. In addition, in some large hotel and motel operations, more than one kitchen is in operation and it may be necessary or desirable to transfer food from one kitchen to another. Transfers may occur in chain operations: A single unit may produce such items as baked goods for other units in the chain, or one unit in the organization, running short of needed items, may be encouraged to secure them from another unit. In these cases, a failure to record the value of transfers will result in a food cost that is inaccurate.
Because the goals of food control include determining food cost as accurately as possible and matching food cost with food sales, it is often necessary to maintain records of the cost of the food transferred. When the amounts involved are relatively insignificant and have little appreciable effect on cost and on the cost-to-sales ratio, they may be and usually are disregarded. But when the amounts become somewhat larger and have more significant effects, records of some type must be developed.

Intraunit Transfers
Intraunit transfers are food and beverage transfers between departments of a food and beverage operation. They include transfers of food and liquor between the kitchen and bar, and between kitchen and kitchen in those larger operations that have multiple feeding facilities.

Between Kitchen and Kitchen(intraunit)
In some of the larger hotels that operate more than one kitchen and dining room, it is common practice to determine food costs for each separately and to match the costs for each operating unit with the sales generated by that unit. When some food items are transferred from one kitchen to another, higher degrees of accuracy in determining food costs may be achieved by keeping records of items and amounts so transferred. In cases where, for example, one unit closes earlier than another and cooked foods may be conveniently transferred from the closing unit to the one remaining open until a
later hour, it may be possible to achieve a higher degree of accuracy  in determining costs for each unit by crediting the cost of the early closing unit for the value of the items transferred and by adding
that value to the cost for the later-closing unit.
Even in cases in which items are not so transferred but are merely returned to a central kitchen or commissary for reissue to the same or to other units on succeeding days, recording the value of the items returned on transfer memos or on similar forms makes possible a more accurate determination of food costs and, consequently, of cost-to-sales ratios for operating periods.

Interunit Transfers
Interunit transfers are transfers of food and beverage between units in a chain. The two examples that follow illustrate interunit transfers and the effect of such transfers on food costs. In a number of instances, small chains produce some items (baked goods, for example) in only one unit and then distribute those items to other units in the chain. If the ingredients for the baked goods come from that particular unit’s regular supplies, then some record must be made of the cost of the ingredients used. Failure to record such costs can result in overstating the food cost of the producing unit by the value of the ingredients used, and in understating the food costs of the receiving units by the value of the foods they receive. In addition, if the matching principle as discussed below is to be followed and if food sales are reported separately for each unit, then food cost figures that do not include the cost of all those foods sold, including the baked goods from another unit, cannot be said to be truly matched with sales. Under such conditions, if one of management’s goals is to match costs and sales with a reasonably high degree of accuracy, it is necessary to use a transfer memo or a similar form to record the value of ingredients used to produce finished products to be transferred to other units. With such records available, it is possible to decrease the cost of the producing unit by the amount transferred. Appropriately increasing the food cost figures of the receiving units may pose more of a problem. If each unit receives an equal share of the goods produced, then one could simply divide the cost of the goods produced and credited to the producing unit by the number of units to which items have been transferred, and then increase the food cost of each by one equal share. However, if the total produced for distribution to the various units is not divided among them equally, then some more equitable means for apportioning cost must be found.
Another problem involving the value of foods transferred from one unit to another may be seen in those chain organizations that permit or encourage unit managers to obtain foods from other units when their own supplies run low and additional purchases are precluded by lack of time. Occasions may arise when a unit nearly exhausts the supply of an important item and does not discover this shortage until it is clearly too late to purchase an additional amount. In some organizations, when units are comparatively close to one another and offer identical menus, items are borrowed and returned within a day or so as a matter of course, and no complications arise as long as all borrowed items are returned. However, not all cases are quite so simple, as, for example, when a perishable item borrowed by one unit does not appear on the menu again for some considerable period of time. Rather than maintain records over long periods to ensure the return of borrowed items, it is often simpler to record such transfers of foods on transfer memos and to use the information so recorded to increase the cost of the unit that has borrowed and correspondingly decrease the cost of the supplying unit.
An interesting problem that may arise in connection with this procedure is the extent to which it influences some managers to purposely maintain short supplies of some high-cost and perishable items. If the organization permits one unit to secure needed supplies from other units at the same prices it would pay in the market, some managers will be encouraged to reduce the possibilities for excessive costs due to spoilage and pilferage in their units simply by maintaining inadequate supplies. Under such conditions, discouraging managers from taking advantage may entail establishing a price for transfer purposes somewhat higher than the current market price.

Between Bar and Kitchen(inter unit)
Food and beverage transfers between bar and kitchen occur frequently in operations of all sizes. Many kitchens use beverage items such as wine, cordials, brandy, and even ale to produce sauces, parfaits, certain baked items, and rarebits. Occasionally,  these beverages are purchased by the food department for use in the kitchen, kept in a storeroom until needed, and then issued on  requisitions directly to the kitchen. In such cases, additional records are not required; the quantities and values listed on the requisition are sufficient to permit accurate calculations of cost. However, in most instances when these beverages are needed in the kitchen, appropriate amounts are obtained from the bar. After all,
if sufficient supplies are already being maintained at the bar, it makes little sense to keep additional quantities for specific use in food production.
The same may be said of certain food items in the directs category used by bartenders in drink production. If supplies of oranges, lemons, limes, heavy cream, and eggs are already available in a kitchen, it makes little sense to purchase specific supplies of these items for exclusive use at the bar. It is far simpler merely to secure the needed items from the kitchen. When it becomes necessary or desirable to achieve a high degree of accuracy in determining costs to match with sales, records of these transfers between the food and beverage departments must be maintained. The form used to maintain these records is the Food/Beverage Transfer Memo. As transfers are made, items and amounts are recorded. These records are sent to the food controller, who can use them to adjust food cost figures to achieve greater accuracy, and then routed to the food controller and an accounting office, where the appropriate adjusting entries can be made in the financial records.

Layout of Stores:
Whatever form of layout is used, it is advisable that the stores stock lists should be printed in relation to the layout so that stock taking becomes convenient

Typical layouts of stores are
The stored items should be either arranged alphabetically or numerically For all items separate bin cards should be made.
The frequently issued goods are stored near the delivery door / window and the items which are not issued frequently can be stored a little away"! from the window / door.
The commodities stored can be grouped. For example all pulses be stored at one place and fruits and vegetable at other and the canned food at different place / rack.
Bin cards
Bin Cards are prepared for each item stored in the store. It contains the description of the item, balance of the item, quantity of goods received; the quantity of goods issued and the balance of the item are shown on daily basis. It also shows the minimum stock, reordering point / level, maximum stock, danger point / level economic ordering quantity. The bin cards are either kept along with eaeh item or they are stored near the store keeper working table.

Stock Cards:
Instead of using Bin Cards, Stock Cards can be used. These should be kept either in tray file, loose leaf holder or in a cupboard. The stock cards are stored either alphabetically or they are stored numerically. Each item is given a serial- number. A card is kept for each item and while issuing the items the stock card is filled up and subsequently the entry is made in the bin card At any given time if inventory is taken then the quantity shown in the stock card must tally with the actual quantity available in the store.

Perpetual Inventory Method:
Perpetual Inventory means checking of stock items from one day to another. The control department maintains the inventory control card / record for each item held in stores. All commodities received and issued are recorded date wise. The goods are received by the receiving department as per the purchase order, supply order, invoice and records the goods received in the goods received register. He transfers the goods received to stores. The store department enters the goods received in its records and also records them on all bin cards and stock cards. If the records are maintained properly by stores, receiving department then it becomes very easy to check it at any time for accuracy of entries and for control purposes.

Store issue
For each department the schedule for issuing stores is made. All departments are required to come to stores for stores at the specific date and time. The person receiving stores is required to bring along with him store requisition register / slip. Against the requisition slip the store is issued by the store department. While issuing him physically measure / counts the items to be issued and record them in the requisition slip / register. The person receiving signs the slip. The store keeper retains the original copy of the slip and the carbon copy is returned to the department receiving stores for record purposes. In case of large requisitions the store keeper requests the department to give him the requisition a day in advance or at least hours before so that he can issue the stores without delay.

Transfer Notes:
 Transfer of food items both in the raw form or cooked / semi cooked form from one department to another department within the hotel is done through transfer notes. For example, the kitchen may make out a transfer note to the room service bar for Irish Whisky for making an Irish coffee. Usually bar makes its own requisition for fresh fruits and picks them up from stores. But at times the bar may make a transfer note for fresh fruits like oranges, pineapple, lemons, etc. and pick them up from kitchen. The columns of the transfer form may be quite similar to the requisition form. Both transfer notes and requisition slips are internal invoices.
   All requisition slips and transfer notes are sent to control department and accounts department for control and accounting purpose.

Breakages, Spoilage, Damaged Goods
Though the breakages, spoilage and damage of goods should be avoided as far as Possible, but the spoilage cannot be eliminated altogether. In case management is of the view that the breakage / spoilage / damage of goods is due to the negligence of the store department then it is charged to the stores personnel. All breakages, etc are recorded in damaged goods book. The book would record the date, description of item, details of purchase, value, reasons for spoilage, action taken by the store in charge and remarks. Normally the spoilage of items due to unavoidable reasons are written off by the management.

Stock Taking:
The regular and surprise stock taking is must for an effective control. This should be followed in addition to daily check kept on the receipt and issue of items from 3 stores. The stock variation may not be always due to pilferage but usually the variation in physical stock as compare the stock as per Bin card may be due to variation in weighing (short weighing or over weighing). In case of a little bit variation, the store keeper may be warned orally to be more careful ;n weighing the items while issuing.
The purpose of beverage stock taking is to ascertain the actual value of beverages in stores and much it is different from book value. Usually every day after the bar is closed the physical stock taking of all beverages is taken. The Open spirits are measured physically to know the exact number of drinks in stock. The balance c/f becomes the balance b/d en the following day.
 All purchases / requisitions are added and the balance shown at the end of the shift is deducted to know the actual consumption for the day. The daily stock taking is usually done by the representative from the control department. The bar man is required to assist in the stock taking.

The following are the reasons for stock taking:
1. Stock in Hand:
To calculate the profit and loss account, it is must to know the actual value of stock in Rupees to show it as a stock in the books. The stock of items is taken physically and the value of the stock in hand is calculated Usually the actually cost or the current market price, whichever is lower is taken into account for calculation the value of stock.

2. Discrepancy:
No matter how carefully the receipts and issue of goods are recorded in the stores records but still there might be discrepancy in the physical stock in hand as compare to the stock in books. Management must ensure that these discrepancies must be minimised if not eliminated all together.

3. Printed Stock Sheets:
The stock taking should be taken by the group of persons consisting of officials from Control department Accounts department and Food and Beverage department. The printed stock sheets are prepared as this helps in taking the stock more speedily.

4. Time of Stock Taking:
Usually the stock taking is done either after the closing hour of the stores or before opening of the normal stores timings. This is done to avoide any disturbance to the routine distribution of the requisitions to various departments.

5. Professional Stock Takers:
The management may hire professionals for Stock taking at least once month. This ensures that the stock taking is done more systematically efficiently by the internal staff of the hotel

Pricing of Commodities:
All food items issued to departments should be fairly charged for calculating food cost. Food cost is a very vital tool of evaluating kitchens efficiency and management gives a lot of importance to the food cost.
The method of pricing the food issued depends on the type of commodity. The commodities can be broadly divided Into Perishables and Non-Perishables

Perishables :
Almost all perishable commodities directly go to the kitchen and are priced at actual purchase price. The perishables which first go to the stores and then issued daily basis to the kitchens against requisitions then are prices differently. The biggest problem of calculating cost is of meat and meat products. The animal carcass is issued to butcher against requisition. Butchery makes the appropriate portion sizes for different menu items as per the kitchens requirements. The butchery transfers the food to kitchens against transfer notes. The food items mentioned on the transfer notes and transferred from butchery and priced. While calculating the price of meat products the butchery keeps in mind the wastage and the actual yield is priced for control and costing purpose.
The procurement price of an item may or may not be same as purchase price. In case goods are purchased through agent or the supplier is quoting price ex show room / store then the hotel is required to pay the commission to the agent and carriage inward charges for transporting the goods to the hotel. For majority of the consumable items which is usually consumed with in a day or two of purchasing are usually charged on purchase price for calculating food cost.

Non- perishable:
In case of non-perishable items there are several different methods to price the items/commodities. But only one of the methods is adopted to price the commodities.

The different prices are-

1.        Average Price:
In case the price of an item fluctuates very frequently and every time it is purchased the price may be different then the price paid, may be a day before. These items when issued to departments against requisitions are charged while calculating the average price paid for the item. This ensures more stability in the issue price of the commodities and hence does not affect adversely on the food cost.

2.     Weighted Average Price:
The weighted average of the items is calculated to have more stability in issue price as compare to Average Price. For example if 100 packets of mushrooms are purchased at the price of Rs. 8 per packet and 400 packets mushrooms are purchased at the price of Rs. 7. Then the Weighted Average Price will be 100 X 8 + 400 X 7 divided by 500= Rs. 7.20 per packet.

3.     LIFO: last in first out
When the market fluctuates very frequently and the management wants to charge the latest price of the commodity even when the goods received first are issued first (FIFO). But in case latest price is less than the first price then the price paid for the commodities is charged to department issued stores.

4.     FIFO: first in first out
This means the goods purchased first will be issued first and also the same price will be charged while issuing stores.

5.     Standard price:
Irrespective of the price paid for procuring the commodities but the price charged is fixed by the management. Usually the management fixes the price of a commodity for a certain period say three to six months and the same price is charged to departments while issuing commodities against requisition. This helps in maintaining the food cost irrespective of the market price.

Stock levels
The stock level has a direct impact on either running out of stock of an item or of over stocking of an item, and thereby tying up unnecessary working capital. The management would like to have a stock level which should neither have a stock level which should neither have a situation of running out of stock nor over stocking.
This stock level in any hotel may differ from hotel to hotel depending upon the following reason:
a)     Forecast on volume of sales.
b)    Reordering time for the item.
c)     The economic ordering quantity.
d)    Expected price of the item, availability, etc
e)     The storage space and facility available
f)     The shelf life/keeping quality of the item.
g)    Working capital available.
h)     Danger level

Hygiene and cleanliness of area:


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