ice pack Foods packed in crushed ice. Intended to increase shelf life. A typical packing procedure used
for things like fresh chicken and fish.
ice spot A dry spot on a food product that has been previously frozen. An indication that an item that
is thought to be fresh has actually been frozen, thawed, and passed off as fresh.
illegal rebate Another term for kickback.
importer-wholesaler Intermediary in the beverage alcohol distribution channel. Responsible for
importing products into the United States, as well as into each state and local municipality. Also
responsible for distribution to retail establishments, such as bars, restaurants, and liquor stores.
IMPS/NAMP number Another term for Institutional Meat Purchase Specification (IMPS) number.
in-process inventory Products located at employee work stations; most or all will be used during the shift.
independent hospitality organization A hospitality company that does not have an affiliation with a
multiunit company and/or is not part of a franchise system.
indirect control system Process of using overlapping computerized and/or noncomputerized receipts
and other records to maintain tight control over all inventory items.
individually quick frozen (IQF) Process whereby products are quick frozen and individually layered in the
case. Typical packing procedure for things like portion-cut boneless, skinless chicken breasts.
ineligible bidder Company that would like to bid for a buyer’s business, but would not be allowed to
bid because it does not meet certain qualifications set by the buyer. For instance, the company may
not be large enough, it may not have sufficient financial strength, and so forth.
informal specification Less precise product specification. Usually includes only information the vendor
uses to describe the product.
ingredient room Area set aside in the main storeroom where an employee measures out all the ingredients
needed for all the recipes to be prepared during the shift, and then issues them to the appropriate
installation and testing costs Typical charges paid when making a major equipment purchase. Usually
paid in addition to the AP price of the equipment, though a buyer’s company may be able to provide
these services personally for less.
Institute of Supply Management (ISM) Organization that offers relevant information, education, and
training to purchasing professionals.
institutional can size A No. 10 can. It holds up to 3 quarts, or from 96 to 105 ounces, of product.
institutional hospitality operation Facility operated on a break-even basis. It is not intended to make a
profit. In some cases, it may operate at a loss and be subsidized with other funds. For instance, an
employee cafeteria may receive funds from the company so that it can charge employees very low
prices for their meals.
Institutional Meat Purchase Specification (IMPS) number Numbering system for meat items. For
instance, if buyers order a number 1112 ribeye steak, they will consistently receive a very specific
type of product no matter which meat vendor they buy from.
instructions to bidders Required process vendors must follow when submitting a competitive bid.
Typically also includes a description of how the winning bid will be determined and the qualifications
vendors need to be allowed to bid.
insurance broker Salesperson authorized to represent several different insurance companies and sell
their products. Usually selects appropriate insurance policies from different companies to provide all
necessary coverage a client needs.
intangible force Factors that impact the distribution channels in ways that cannot be easily determined,
not can they be easily categorized.
integrity testing Controversial method used to determine if a person is honest.
intended use Refers to the performance requirement of a product or service, which is noted on the
specification. Considered to be the most important piece of information on a specification.
interest on unpaid balance Finance charge added to the portion of a bill the buyer does not pay immediately.
Can be avoided if the entire balance is paid off. Alternately, a fee or penalty for late payment.
intermediary Another term for vendor.
Internal Revenue Service (IRS) Federal agency responsible for enforcing the U.S. tax code and for collecting
International Foodservice Manufacturers Association (IFMA) Organization whose primary membership
is employed in the foodservice equipment trade. Provides relevant information and professional
development opportunities to its members. Also helps ensure that their interests are represented in
interpersonal skill The talent and willingness to communicate and get along well with others.
Interstate Certified Shellfish Shippers List Agency within the Food and Drug Administration (FDA)
that approves the areas where shellfish are grown and harvested. When a buyer purchases these shellfish,
the container will include a tag (that must be kept on hand for at least 90 days) that shows the
number of the bed of water where the products were grown and harvested.
Interstate Shellfish Sanitation Conference Voluntary program, involving federal and state agencies, that
supervises the beds of water used to grow and harvest shellfish.
introductory discount Price reduction by vendors to entice buyers to try something new. May also take
the form of buy-one, get-one-free.
inventory book value The value of inventory that is supposed to be in storage, as recorded on inventory
records, such as a bin card. The value is based primarily on perpetual inventory calculations.
inventory classification Arranging inventory in a specific, organized way so that it is easier to monitor
and control its usage.
inventory control System of procedures used to ensure that the products you purchase will be used only
as intended. The main objective is to make certain that the actual usage is the same, or about the
same, as the expected usage.
inventory padding Reporting a false inventory amount by indicating that there is more inventory on hand.
A fraud that is usually committed to make the actual cost of food sold appear to be less than it is.
inventory sales control Another term for critical item inventory.
inventory shrinkage Another term for pilferage.
inventory substitution Occurs when someone takes a product and leaves behind a different one.
Typically done by persons who steal a high-quality item and substitute a low-quality one in its place.
inventory turnover Equal to: (actual cost of products used, or sold, divided by the average inventory
value kept at the hospitality operation).
inventory value as a percent of annual sales revenue A method used to evaluate a food buyer’s performance.
inventory-taking service An outside contractor that comes to your hospitality operation to take a physical
inventory of the products you have. In addition, the contractor may perform related duties, such
as valuing the inventory and preparing purchase orders.
invoice A bill from a vendor for goods or services, often presented as the goods are delivered or after
the services are performed.
invoice padding Adding extra charges and/or items to the invoice that were not ordered. This could
happen because of an innocent mistake, or it could be done by someone trying to steal from you.
invoice receiving Common type of receiving procedure. Involves comparing the invoice with the order
record, and then proceeding to check quality, quantity, and AP prices of the items delivered.
invoice scam Using fraudulent invoices to steal from a company.
invoice stamp Information placed on the receiving agent’s copy of the invoice that indicates all appropriate
checks were made and that the shipment was accepted.
invoices on account Bill-paying method. Involves reconciling all invoices and credit slips received during
the billing period with the end-of-period statement sent by the vendor. If everything is correct,
the company pays the total amount listed on the end-of-period statement, or makes the minimum
payment and lets the balance ride until the next period.
irradiation Controversial product preservation procedure that can reduce or eliminate harmful bacteria.
Used to extend a product’s shelf life.
issuing procedure There are two types: formal and informal. The formal procedure requires a product
user, such as a chef, to requisition products from a central warehouse or storage facility. The chef
signs for the items and is responsible for them. An informal procedure allows the product user to
request from the manager what is needed, with the manager getting the products and handling the
paperwork later on. Another informal process allows any product user to enter the warehouse or storage
facility and take what’s needed for production and/or service.
itemized bill Invoice that indicates each item’s AP price and extended price, as well as all other costs,
such as delivery charges, associated with the purchase.
job description A list of duties the job entails that the employee must perform. May also include additional
information, such as the job’s direct supervisor, the objective(s) of the job, and guidelines that
must be followed when performing the job functions.
job evaluation Analysis and critique of a person’s job performance over time. Usually done once a year,
or more frequently if the employee is in a probationary period.
job specification List of qualities, such as education, technical skill, and work experience, a person
should possess to qualify for a particular job.
jug wine Refers to a product typically served as the house wine. Usually packed in large containers, such
as bag-in-the-box containers.
just-in-time (JIT) inventory management System that attempts to ensure that the moment the inventory
level of a particular product reaches zero, a shipment of that item arrives at your back door. The
main objective is to reduce carrying charges to their lowest possible level.
labor pool The amount, type, and skills of employees residing in a specific area, from which an employer
draws his or her employee staff.
landed cost The cost used by the vendor in a cost-plus buying arrangement.
large egg Common fresh shell egg size purchased and used by the hospitality industry. It weighs
approximately 2 ounces. The typical standard recipe requiring fresh shell eggs assumes the cook will
use this size.
laundry and linen supply service Outside service that provides cleaning, pressing, and fabric repair.
Delivers fabrics to the hospitality operation. May lease its fabrics to the hospitality operation, or
may maintain those owned by the hospitality operation.
layered packaging Products packed between sheets of paper, plastic, or cardboard. Intended to protect
products so that they do not break or otherwise lose quality.
layout pack Products are packed in layers that can be lifted from the case and placed in other containers
for storage or production. For example, layout sliced bacon may be layered on baking sheets that
can be placed on sheet pans and cooked off in the oven.
lead time Period of time between when you place an order with a vendor and when you receive it.
leasing company Firm that purchases FFE and leases them to other companies. The typical rental plan
is a rent-to-own arrangement. May be a more expensive form of financing a FFE purchase than borrowing
the money and buying the items outright.
legal force Legislative influence on the distribution channels establishing certain rules of conduct.
Enforced by local, state, and/or federal government.
Levinson approach to ordering Method of determining the appropriate order sizes. Takes into account
forecasted sales, portion sizes, and yield percentages when calculating the amount of products to
license state A state that grants licenses to importers-wholesalers, distributors, and retailers who then
handle the distribution and sale of beverage alcohol.
lien-sale contract Allows the service provider, usually some type of construction, decorating, or designer
service, to attach a lien to the entire property if he or she is not paid for the work performed.
lifetime cost A term typically used when analyzing an equipment purchase. Along with the AP price of
the item, the buyer might also examine the trade-in value of the old equipment, the cost of the energy
needed to operate the new equipment, extra charges for delivery, set-up, and training, how much
it can sell the new equipment for when it is time to replace it, and so forth.
light liquor Beverage alcohol that contains a lower alcohol content than the standard item. For instance,
a light version of an 80-proof product will typically contain approximately 54 proof.
limited purchase order (LPO) A purchase order that restricts how much a buyer can purchase. There are
limits on the quantity that can be purchased and/or the amount of money that can be spent at one
limiting rule Federal regulation that stipulates if a product to be graded scores very low on one grading
factor, it cannot receive a high grade regardless of its total score for all grading factors.
line-item purchasing A practice of buying from vendors only the individual items on a competitive bid
sheet that are priced lower than those submitted by competing vendors. For instance, if a purveyor
bids on 10 items, but is the lowest bidder on only 1 of them, the buyer will buy only the 1 item.
Sometimes referred to as cherry picking. The opposite of bottom-line, firm-price purchasing.
liquidation Selling off business assets to satisfy creditors. May be done via auction.
liquor distributor Another term for vendor. Purchases beverage alcohol from primary sources and resells
it to retailers.
liquor license Granted by a government agency. Gives the licensee the authority to purchase and sell
live-in-shell Refers to shellfish that are still alive when delivered.
logistics software Computer program used by vendors to outline the routing sequences its delivery drivers
must follow when delivering shipments. Intended to increase delivery efficiency.
long-term contract Agreement that typically lasts at least one year.
loss leader Product sold at a much lower profit margin to attract customers who will purchase it as well
as other more profitable items.
lost leader Product sold at a negative profit margin to attract customers who will purchase it as well as
other more profitable items.
lot number An indication that packaged goods originated from a particular group, or lot. Important if,
for example, you are purchasing canned goods; products coming from the same batch will have similar
culinary quality whereas those from different lots may be slightly different.
lowball bid A competitive bid that is artificially low. Vendors may lowball a buyer hoping to get their
foot in the door; later on they will try to hike the AP price substantially.
lug Container that has 2 layers of product. Term typically used in the fresh produce trade.
maintenance contract Type of extended warranty coverage. For a fee, usually paid monthly, the contractor
provides routine maintenance as well as emergency service. Typically purchased when the initial
warranty period is set to expire.
maintenance service Outside contractor who provides repair and maintenance service. May involve the
purchase of a maintenance contract. Or it may be purchased only when needed.
make-goods Free advertising time or space granted to buyers when the actual intended audience size
is smaller than the guaranteed one.
make-or-buy analysis A cost/benefit analysis whereby the buyer tries to determine if, for example, it is
more economical to purchase raw foods and make a finished product in-house, or whether it may
be less expensive to purchase a convenience, value-added food. The buyer usually considers the cost
of food, labor, overhead, labor skill available, etc. when making the decision.
management considerations when purchasing products or services Aspects supervisors, managers, and
owners should evaluate before deciding which product or service to purchase.
management information system (MIS) Method of organizing, analyzing, and reporting information to
manage a business effectively. Typically involves the use of computerized recordkeeping.
managing the storage facilities Procedures used to ensure stored merchandise is managed effectively
and that losses due to spoilage, theft, and pilferage are minimized.
manual list A moderated computerized mailing list. Unless messages are approved by the moderator,
they will not be sent to group members.
manufacturer’s agent Similar to a manufacturer’s representative, but not the same. Main difference is
that the agent typically works for only one primary source, whereas the manufacturer’s representative
typically works for several.
manufacturer’s representative Similar to a broker, but not the same; main difference is that the rep will
typically provide end-user services, whereas the broker will not. Also similar to a manufacturer’s
agent, but not the same; main difference is that the agent typically works for only one primary
source, whereas the manufacturer’s representative typically works for several.
manufacturing grade A very low grade given to food products that are not intended to be sold as fresh
items, but are meant to be used by processors to produce a finished item. For example, low-grade
beef usually is purchased by a processor who makes things like canned chili or canned beef stew.
marbling Fat within muscle tissue. Important grading factor for beef items.
marinade pack A packing medium intended to impart flavor, and sometimes tenderness, to foods. For
instance, if you feature spicy wings on your menu, you may decide to purchase fresh wings marinated
in a special sauce. When they arrive at your restaurant they are ready-to-cook; you do not need
to marinate them yourself.
Marine Mammal Protection Act Law stating that tuna harvested in a way that endangers dolphins cannot
be sold in the United States.
market quote buying Another term for call sheet buying.
marketing board Website dedicated to selling a specific product or group of products.
marketing terms for fish Names used by members of the fish channel of distribution to identify various
types and forms of fish products. Alternately, names used by seafood marketers to make their fish
products seem more attractive, which typically involves changing the current name of a product to
make it more salable.
Marlock system A brand-name, computerized locking security system that limits facility access to persons
who have authority to enter them. Can also provide a time log of persons entering and exiting,
as well as other similar types of information.
materials budget Involves setting a dollar limit of how much a buyer is able to purchase over a particular
time period. A method used to control and evaluate a buyer’s performance.
maturity class Used to categorize an animals’ age at time of slaughter. Important grading and selection
factor for beef.
Meat Buyers Guide (MBG) number Another term for Institutional Meat Purchase Specification (IMPS)
Meat Buyer’s Guide, The Publication that standardizes, organizes and identifies various types and cuts of
meat products. A numbering system is used for easy reference.
Meat Inspection Act Along with other legislation, grants the United States Department of Agriculture
(USDA) inspection powers throughout the food distribution channels.
meat tag Used to control the usage of expensive items, such as meat, fish, and poultry. It contains two
duplicate parts. One part is attached to the item when it is received and placed into storage, the other
one goes to the controller’s office. When an item is taken from storage and issued to production, the
part on the item is removed and sent to the controller, who matches it with the other part. The item
is then removed from the inventory file. At that point, the storage supervisor (storeroom manager)
is no longer responsible for the item, the chef is.
mechanical tenderization A physical tenderization technique. Usually takes the form of grinding, chopping,
cubing, flaking, or needling. May change the shape of the product being tenderized.
Medeco lock A brand-name, high-quality, expensive lock used to secure valuables.
media-buying service A type of advertising agency that helps clients develop their overall advertising
strategies and selects the various media to use. Works for commissions.
memo invoice Another term for goods received without invoice slip.
menu mix percentage Indication of a menu item’s popularity. Equal to: (number of the menu item sold
÷ the number of all menu items sold), during a defined period of time. Usually used to help forecast
sales revenue, how much food to buy, how much labor to schedule, and so forth.
menu price calculation The food cost of a menu item divided by its food cost percentage. Alternately,
the beverage cost of a menu item divided by its beverage cost percentage.
merchant wholesaler Another term for vendor.
merits Refers to the way advertising is paid for. The price a buyer pays is directly related to the amount
of sales revenue generated by the advertising.
middleman Another term for vendor.
military hospitality operation Facility that typically includes troop feeding and housing, military clubs,
and military exchanges.
minimal inventory investment Refers to the buyer’s desire to have only enough inventory necessary to
conduct business. Intended to minimize carrying costs.
minimum order requirement The least amount of an item a buyer needs to purchase before a vendor will
agree to sell it. Alternately, the least amount a buyer needs to purchase before he or she can qualify
for free delivery.
minimum weight per case Important selection factor when purchasing products that may vary in
weight from one vendor to another, or because of other factors, such as seasonal variations. Helps
ensure that the buyer receives a predictable amount of product.
mixed case A case that contains more than one type of item. Usually found in the beverage alcohol
trade, where the vendor will allow the buyer to purchase a case of 12 bottles, but each bottle may be
a different product. Vendors may allow this for products you purchase that you don’t sell very quickly,
such as specialty bourbons. Vendors who sell mixed cases are usually willing to charge the case price per
unit for each item.
modified atmosphere packaging (MAP) Another term for controlled atmosphere packaging (CAP).
mollusk Shellfish with a hard shell (e.g., oysters).
monopolistic competition Refers to a competitive environment where each competitor is affected by
supply and demand conditions since their businesses are very similar. However, each competitor is
able to differentiate their products and/or services enough to establish a competitive advantage.
Typical economic conditions faced by vendors and hospitality businesses.
move list A list of products that need to be sold ASAP. For instance, they may be on the verge of
spoilage, or they might be discontinued items. If vendors have items on a move list they may call
you to see if you’re interested in any of them. Usually the AP prices of these items are deeply discounted.
multiunit hospitality chain organization Company that owns and/or franchises many hospitality businesses.
It may also manage several businesses for absentee business owners who wish to contract for
the management services.
muzz-go list Another term for move list.
mystery shopper Person hired to pose as a customer to evaluate a business from the viewpoint of the
typical guest. He or she usually is asked to complete a report citing such things as product quality,
service quality, property cleanliness, and so forth.
National Cattlemen’s Beef Association (NCBA) Trade organization representing the beef industry. Its primary
purpose is to promote the sale and purchase of beef. It also is an information resource for members
of the beef channel of distribution.
national contract Contract between a large multiunit restaurant company and a vendor stipulating that
all restaurants in the chain will be able to purchase the same types of products, usually at the same
National Cooperative Business Association (NCBA) Membership organization dedicated to developing,
advancing, and protecting cooperative enterprise.
national distribution Clause in a national contract stipulating that all restaurants in the chain will be
able to rely on getting the same types of products delivered to their back doors.
National Fire Protection Association (NFPA) Provides fire safety certification for FFE items that meet its
National Livestock and Meat Board Trade organization that promotes the meat industry and provides
educational materials, such as recipes, suggested diets, and so forth.
National Marine Fisheries Service Agency of the U.S. Department of Commerce (USDC) that publishes
grade standards and offers grading services for fish products.
National Oceanic and Atmospheric Administration (NOAA) Agency of the U.S. Department of
Commerce (USDC) that, for a fee, will provide continuous inspection of a fish processor’s plant.
National Restaurant Association (NRA) Trade organization that represents, educates, and promotes the
U.S. foodservice industry and the people working in it.
National Restaurant Association Educational Foundation (NRAEF) Agency of the National Restaurant
Association (NRA) that provides educational resources, materials, and programs that address recruitment,
development, and retention of the industry’s workforce. It is dedicated to fulfilling the NRA’s
National Sanitation Foundation (NSF) International Provides sanitation certification for FFE items that
meet its standards.
needling A tenderization procedure. Submitting a large cut of meat to a machine with several tiny needles.
The needles penetrate the meat, tenderizing it without altering its shape. The needle marks are
usually invisible once the meat has been cooked.
negative selling Occurs when a vendor places the buyer in a position where the buyer encourages the
vendor to take the buyer’s order (and money). Usually done by convincing the buyer that he or she
must use that particular vendor and that there is no substitute vendor capable of handling the order.
More likely to occur when purchasing consulting services than when purchasing any other type of
product or service.
negotiation To come to terms or to reach an agreement through discussion and a willingness to compromise.
net present value Concept that takes into account the time value of money. It is the difference between
the present (current) value of any projected savings due to the investment in, for example, a piece of
energy-saving equipment and the present (current) value of the price of the equipment. Ideally, the
present value of the savings should exceed the present value of the price of the equipment.
net weight Gross weight less the tare weight.
new pack time Time of the year when products intended for sale the following year (or other period of
time) are packed. For instance, canned fruits and vegetables are usually processed and packed right
after harvest. Vendors then work off of this inventory until the next new pack time rolls around.
night delivery Shipment delivered during off-hours. Intended to save money because there is less traffic
for the driver to contend with, which means that more deliveries can be made.
night drop When the delivery driver has a key to the facility, enters it when closed for business, leaves
the shipment, locks up, and goes. The shipment is put away the next morning. Intended to reduce
costs due to the efficiency of deliveries at off-hours (i.e., late-night or early-morning) and not having
to pay a receiving agent.
nitrogen flush A gas-flushed pack. Using nitrogen to remove air, thereby removing all oxygen from the
package. Done to enhance shelf life.
no-name brand Another term for generic brand.
noncommercial hospitality operation Another term for institutional or military hospitality operation.
nonfood expense item Another term for expense item.
North American Assoc. of Food Equip. Mfrs. (NAFEM) Trade organization representing companies in
Canada, the United States, and Mexico that manufacture commercial foodservice equipment and
North American Meat Processors Association (NAMP) Trade organization representing meat processing
companies and associates who share a continuing commitment to provide their customers with safe,
reliable, and consistent meat, poultry, seafood, game, and other related products.
number of pieces per bird Selection factor that may be important when purchasing poultry. Refers
directly to the number of parts to be cut from a bird carcass, and indirectly to the style of cut that
will be used.
Nutritional Labeling and Education Act Legislation that mandates nutritional and other related information
to be listed on product package labels.
odd-hours discount Price break awarded to buyers who allow vendors to deliver shipments at unusual
times, such as late at night when the restaurant is closed, or during the sacred hours.
oil dipping A method of preserving fresh shell eggs. Dipping them in oil slows down (but does not eliminate)
moisture loss and quality deterioration.
oil spraying A method of preserving fresh shell eggs. Spraying oil on them slows down (but does not
eliminate) moisture loss and quality deterioration.
on-the-job training (OJT) Typical method used to teach job skills to new and continuing employees.
Involves learning the skills while performing the duties in real time, usually under the direction and
supervision of a trainer.
one-stop shopping Buying everything you need from one vendor. Alternately, buying everything you
need from the fewest possible purveyors.
online auction site Electronic auction, allowing prospective buyers to bid on products without being
physically present. Usually all details are handled over the Internet.
online ordering system Ordering products from vendors over the Internet or directly from a purveyor
using his or her proprietary software.
open market buying Another term for call sheet buying.
open storeroom An unlocked storage facility that can be accessed by employees as needed. Usually contains
the less-expensive foods, beverages, and nonfood supplies.
opening inventory Another term for beginning inventory.
operating activities Major day-to-day functions performed in a hospitality operation. Includes things
such as menu planning, purchasing, receiving, storage, issuing, production, and customer service.
operating control cycle Another term for cycle of control.
operating costs Day-to-day expenses involved in running a business. Alternately, the costs of using a
piece of equipment.
operating savings Refers to the reduction in costs experienced by adopting a new way of doing things,
purchasing a more expensive, but efficient, piece of equipment, and so forth.
operating supplies Another term for expense items or nonfood expense items.
operational performance Refers to a manager’s (such as a buyer) ability to run his or her department
effectively and efficiently, while maintaining company standards. Important factor considered when
preparing a manager’s annual job evaluation.
opportunity buy A purchase intended to save a great deal of money. The products are price discounted.
A quantity discount is an example of an opportunity buy.
opportunity cost By choosing to do something, you give up the option of doing something else. For
instance, if you pay a bill too early you lose the option of investing the money and earning some
interest income. The loss of income in this case is considered to be the opportunity cost.
order modifier Software in a computerized point-of-sale (POS) system that forces the server to answer
questions about a guest’s order. For instance, if the server enters one steak into the system, the computer
will ask, “What temperature?” The server will then answer the question to complete the order
before sending it to the kitchen printer.
ordering cost The amount of money spent to make an order, receive it, and store it. Includes things
such as labor needed to perform the work and administrative costs such as faxing, photocopying, and
cell phone charges.
ordering procedures Standardized process used by the buyer to ensure that the correct amounts of
needed products are ordered at the appropriate time.
organic food Natural food grown, produced, packaged, and delivered without the use of synthetic
chemicals and fertilizers. Primary sources and distributors must adhere to the organic guidelines and
standards published by the USDA.
outsourcing Identifying work that is not central to your hospitality company’s primary mission and hiring
an outside service to do it for you instead of doing it yourself. Things such as pest control and
gardening services are usually outsourced.
overrun The amount of air whipped into a frozen product.
overwrapping A method of preserving fresh shell eggs by doubly wrapping them in heavy plastic film.
This will slow down (but not eliminate) moisture loss and quality deterioration.
packed under continuous government inspection Selection factor some buyers may specify when purchasing
food products (such as fresh produce and fish) that are not legally required to be produced
under continuous government inspection.
Packed Under Federal Inspection (PUFI) Seal placed on the product labels of fish items that have been
produced and packed under continuous government inspection by the U.S. Department of
packer’s brand name Very specific indication of product quality. More precise than a brand name. A
packer’s personal grading system. Usually intended to take the place of federal government grades.
packer’s grade Another term for packer’s brand name.
packing date Date that a product was packaged. May be written in code or in plain English.
packing medium The type of liquid used to pack foods. Especially relevant when purchasing canned
packing slip Another term for invoice. Typically accompanies a shipment delivered by a common carrier.
paid-out Refers to taking money out of the cash drawer and using it to pay a bill. For example, if
you run low on ice, you could take money out of the cash drawer, give it to an employee, and
ask him or her to run down to the supermarket to buy some bagged ice. When the employee
returns, the bill for the bagged ice is placed in the cash drawer so that the missing cash can be
accounted for at the end of the shift.
panic buying Occurs when a buyer is in a pinch and will pay any price to get the stuff right now.
par stock The maximum amount of a product you want to have on-hand. When reordering the product
you want to buy just enough to bring you up to par.
par stock approach to ordering Method used to determine the appropriate amount to order. Involves setting
par stocks for all items and subtracting the amount of each item on hand to calculate the order sizes.
partial limiting rule Grants the federal grader discretion to invoke a limiting rule or to ignore it.
pasteurization Heating foods to the point where it kills most bacteria and harmful enzymes.
Pasteurized Milk Ordinance Another term for U.S. Public Health Service’s Milk Ordinance and Code.
payback period Refers to the amount of time it takes to recoup an initial investment. For instance, if
a buyer purchases a new refrigerator for $5,000 and it reduces energy costs $1,000 per year, it will
take 5 years to get back the initial investment in the refrigerator.
payment terms Another name for credit terms.
payroll service company Company that provides payroll processing and related activities for businesses
that do not want to do this type of work themselves, preferring to outsource it to a firm that specializes
in completing the tedious tasks associated with the payroll administrative function. This type
of service is very popular with small hospitality operations.
peeled and deveined (P&D) A shrimp without its shell and black vein.
perceived value equation Perceived value of a product is equal to: (perceived quality + the perceived
supplier services) divided by its perceived edible (i.e., usable or servable) cost.
performance evaluation Another term for job evaluation.
Perishable Agricultural Commodities Act (PACA) Legislation prohibiting unfair and fraudulent practices
in the sale of fresh and frozen produce.
perpetual inventory Keeping a running balance of an inventory item so that you always know what you
have on-hand. When a shipment is received you add to the balance and every time you use some of
it you deduct that amount. Similar to keeping an up-to-date cash balance in your personal checkbook.
personal purchase Another term for steward sale.
personalized packaging Unique packaging produced according to the buyer’s specific requirements.
Normally includes the buyer’s company logo and/or other proprietary marks.
pest control operator (PCO) Company licensed to handle and apply pesticides that are not available to
the general public.
physical barrier Device, such as a lock, used to control access to a facility or storage area.
physical inventory An actual counting and valuing of all products kept in your hospitality operation.
pick-up memo Gives the delivery driver permission to pick up something from you. Typically used
when you want to return a product to the vendor and you arrange to have it picked up when the
driver makes the next regularly scheduled delivery of things you purchased. May also be used when
a driver is delivering a substitute piece of equipment (such as a coffee urn) and needs to pick up the
one you have so that it can be taken back to the shop and repaired.
pilferage Refers to minor theft. For instance, employees snatching a drink while on-the-clock, or guests
swiping a wine glass.
planning Process of developing business goals and objectives, along with actions and systems needed to
plant visit Refers to a buyer making a personal visit to a vendor’s facilities to evaluate its product line
and its production and distribution systems.
point of origin Refers to the part of the world where a product originates. Important selection factor for
some food items, as the point of origin can have a significant impact on their culinary quality.
point-of-sale (POS) system Computerized device used to record sales revenue and maintain a considerable
amount of management information, such as number of guests served, server productivity statistics,
amount of cash collected, number of each menu item sold, and so forth.
political force Refers to factors that impact the distribution channels in ways that are directly related to
the amount of influence channel members have on one another.
popularity index Another term for menu mix percentage.
portability Refers to the ability of an item to be easily and inexpensively moved to, and operated in,
various locations. Important selection factor for FFE.
portion cut Equal to one serving. Typically refers to precut steaks and chops that are all the same weight.
portion divider (PD) Equal to an item’s (portion factor(PF) multiplied by its edible yield percentage).
portion factor (PF) Equal to (16 ounces divided by the number of ounces needed for one serving).
Alternately, equal to (1,000 milliliters divided by the number of milliliters needed for one serving).
Alternately, equal to (1,000 grams divided by the number of grams needed for one serving).
post-off Term used for a discount offered by a beverage alcohol vendor.
postmix Refers to a nonalcoholic beverage concentrate, such as frozen juice concentrate or soda pop
syrup, that must be reconstituted just before serving it to customers.
potential supplier Vendor that a buyer feels should be evaluated to determine if he or she should be
added to the approved-supplier list.
potentially hazardous food Food, especially protein-based food (such as meat, fish, and poultry), that
can cause food-borne illness if not handled properly.
pouch pack Another term for aseptic pack.
Poultry Products Inspection Act Legislation mandating federal government inspection of poultry products
pouring cost The cost of beverage alcohol sold.
pre-employment screening Initial evaluation of job applicants to determine which one(s) should
advance to the next step of the recruiting and hiring process. Alternately, determining which job
applicants should be granted a job interview.
pre-employment testing Another term for pre-employment screening.
precosting Calculating the costs of all ingredients used in a standard recipe to determine the cost for
precut Another term for portion cut.
precut fresh produce Refers to fresh produce that has been chopped or otherwise cut, and packaged in
cello wrap or other similar type of packaging material.
predatory pricing Company pricing its products unreasonably low in an attempt to drive all other competitors
out of business. An illegal practice.
preferred provider procurement Another term for one-stop shopping.
premium brand Indicates that the product is high quality and usually high priced.
premium well brand A well brand that is higher quality than the typical well brand poured by most bars.
premix Refers to a ready-to-serve nonalcoholic beverage, such as a 12-ounce can of Coke.
prepaid order Another term for purchase order draft system.
preservatives See additives.
price club Another term for buying club.
price control Refers to government agencies dictating the minimum price that must be charged for a
product. This type of control is fairly common in the dairy and beverage alcohol distribution channels.
price extension Another term for extended price.
price limitation Constraint that indicates the maximum AP price a buyer can pay for a product or service.
price maintenance Another term for price control.
primary source A supplier at the beginning of a product’s channel of distribution. For instance, a
farmer is a primary source for fresh produce items. This supplier typically sells items to an intermediary
that resells them to hospitality operations.
prime supplier buying Another term for one-stop shopping.
prime vendor account A consistent and significantly large account a buyer has with a vendor that, because
of its size and the loyalty of the buyer, may be eligible for discounts and/or other special privileges.
prime vendor buying Another term for one-stop shopping.
processing Producing a finished product from raw materials. Typically involves the production of convenience
foods by a food processor.
processor Company that takes raw foods and assembles them into a new product.
procurement An orderly, systematic exchange between a seller and a buyer. The process of obtaining
goods and services, including all activities associated with determining the types of products needed,
making purchases, receiving and storing shipments, and administering purchase contracts.
procurement performance Refers to the buyer’s ability to accomplish the purchasing objectives set by
management. Important factor considered when preparing a buyer’s annual job evaluation.
Produce Marketing Association (PMA) Trade association representing members who market fresh fruits,
vegetables, and related products worldwide. Its members are involved in the production, distribution,
retail, and foodservice sectors of the industry.
product analysis Evaluating various products to determine which one represents the best value.
Alternately, another term for critical item inventory analysis.
product compatibility The extent to which a product is able to interact well with other products. A typical
example would be purchasing a new piece of equipment because it would fit nicely with the current
product cost percentage Equal to: [(cost of a product divided by its selling price) multiplied by 100].
A typical example would be the food cost percentage.
product effectiveness The extent to which a product lives up to its vendor’s claims. A typical example
would be the ability of an all-purpose cleaner to clean satisfactorily any type of surface.
product form Refers to the degree of processing, or lack thereof, a product has when you purchase it.
For instance, a buyer can purchase whole chickens or selected chicken parts. The parts typically
would cost more than the whole birds.
product identification Another term for product specification.
product preservation Refers to production, storage, and/or delivery procedures a vendor uses to ensure
consistent and reliable product quality. Alternately, process used to increase an item’s shelf life.
product safety Refers to the level of risk incurred when using some products, such as cleaning solutions.
product size Refers to the buyer’s specified weight, or volume, of a particular item he or she wants to
purchase. Examples would be a 10-ounce steak or a 4-ounce hamburger.
product specification Same as a purchase specification, but does not contain any information about
supplier services the buyer wants.
product status Indicates whether a product is available from the vendor or if it is on backorder.
product substitution Item delivered by a vendor that was not originally ordered, but is an acceptable
substitute. Alternately, use of a different, but acceptable, product in a standardized recipe.
product testing Refers to the process a buyer will use to evaluate a product before purchasing it.
Alternately, refers to the process a receiving agent will use to evaluate a product before agreeing to
receive it from the delivery driver.
professional employer organization (PEO) Firm that, for a fee, manages the human resources function for
client companies. In addition, these types of firms typically join with client companies’ to become a coemployer.
In effect, the client’s employees become the employees of the PEO. This allows small clients,
such as the typical hospitality operation, to enjoy relief from HR administrative tasks, improved
employee benefits, increased employee productivity, and enhanced liability management services.
product’s performance requirement Another term for intended use.
production loss The difference between the AP weight and the EP weight.
profit markup The difference between the vendor’s cost of a product and its sales price. Alternately, the
difference between the EP cost of a menu item and its menu price.
promotional discount Price discount awarded to the buyer if he or she allows the vendor to promote
the product in the hospitality operation. Or if the hospitality operation agrees to personally help promote
the sale of the product to its customers.
proof Measure of the amount of alcohol in a beverage. Equal to twice the percentage of alcohol in a
beverage. For example, if a beverage is 50 percent alcohol, its proof is 100.
property pass A document the employee must obtain from the manager and show to security to
remove items from the hospitality operation.
proprietary brand Another term for packer’s brand name.
proprietary brand discount A price reduction if you purchase a large amount of products that carry the
supplier’s proprietary brand.
pull date Date beyond which a product (usually food) should not be used, or should not be sold.
pull sales strategy Refers to vendors trying to influence their buyers’ customers to demand the vendors’
products in their favorite restaurants or hotels. The buyers, then, will have to purchase these products
to satisfy their guests.
pulp temperature Internal temperature of precut, convenience fresh produce products, such as chopped
purchase order A request that the vendor deliver what you want, ideally at the time you want it, at an
agreed-upon AP price and credit terms. May include other conditions, such as minimum order
amount, cost of delivery (if any), and so forth.
purchase order draft system A purchase order that includes an attached check to cover the price of the
goods and/or services. A form of prepaid order.
purchase requisition Lists the products or services needed by someone in the hospitality operation. It
is given to the buyer who then goes into the marketplace to find the best deals. This requisition is
typically used for things that the buyer doesn’t purchase on a regular basis.
purchase specification A concise description of the quality, size, weight, count, and other quality factors
desired for a particular item. Usually also includes some description of the desired supplier services
a buyer wants.
purchasing Paying for a product or service.
purchasing policy Standard procedure buyer must adhere to when performing his or her duties.
purchasing power Refers to the amount of money a buyer spends purchasing products and services.
The more money spent, the more ability he or she has to get better deals from vendors.
Pure Food Act Along with other legislation, grants the United States Department of Agriculture
(USDA) inspection powers throughout the food distribution channels.
purveyor Another term for vendor.
push sales strategy Refers to vendors who will do whatever is necessary, and legal, to entice buyers to
purchase their products, usually by providing discounts and/or very generous supplier services.
quality assurance Another term for quality control.
quality control Systems and procedures used by managers to ensure that the actual quality of finished
items is consistent with the expected quality.
quality standard The type of quality you consistently use and that the hospitality operation is known
for. Buyers typically communicate this standard to vendors by specifying brand names and government
quantity discount A price reduction for buying a large amount of one specific type of merchandise.
quantity limitation Constraint that indicates the maximum amount of a product or service a buyer can
purchase at any one time.
quantity limits provision Part of the Robinson-Patman Act. Stipulates that the amount of product that
needs to be purchased to qualify for a quantity discount must be reasonable, and not so high that only
one or two favored buyers have the chance to reach it.
quick response (QR) Distribution method that combines just-in-time (JIT) inventory management with
a flexible and controllable supply stream that can be changed to meet a buyer’s specific needs.