Purchasing Policy

I OBJECTIVE

The objective of this policy is to implement an effective control over the ordering and purchasing of food, beverage and general supplies as follows:

Continuity of Supply:

Purchased merchandise must be on hand when needed. To enable the hotel to achieve its basic objective of profitability and customer satisfaction, the greater the number of alternative supplies, the lower general concern with the continuity of supply in any purchase decision.

Lower Purchase Price:

The lower the price paid for purchases, the higher the profitability to the hotel.

Adequate Quality in Purchase:

The Hotel cannot produce high quality products and services with purchased materials of inferior quality.

High Inventory Turnover:

Low inventories minimise the amount of capital that is needed in operation. High inventories turnover will increase the rate of returns earned on invested capital and thereby enhances profitability. A good control over the par stock level will achieve this objective.

Liasion with Suppliers:

The Purchasing Manager serves as a link between the suppliers and the Hotel, and should therefore be familiar with activities. In this role, the Purchasing Manager should be in a position to make suggestions to the Food and Beverage Department to where or whether any other product should be procured and if any substitute product, are available, in the market.

II PROCEDURES
The procedure for requesting a purchase by the hotel is as follows:

PURCHASE REQUISITION

Purchase Requisition Form is to be used for the purchase of supplies and consumable items. The form is to be prepared by the requesting department in duplicate, and approval obtained from the respective Department Head. Upon receiving the Purchase Requisition Purchasing Section will time stamp received to indicate when the form reaches the office for action.

When the Purchase Requisition is raised, the user department should:

1. State the reason for the intended purchase, in case of new purchase, average monthly consumption, and quantity on hand whenever such information is possible.

2. Each requisition is to be limited to items of like nature. Avoid combining different items in one requisition. This form should not be used for the following merchandise:

I) Food & Beverage

ii) Tobacco

iii) Flowers

iiii) Job Order


3. Purchase Requisition raised by the Storekeeper for regular items when the minimum stock level is reduced must first be given to the relevant Department Head for his signature. This would avoid the wasteful effort of procuring an item for which a decision was made to discontinue.

4. The Purchasing Section upon receipt of the Purchase Requisition will process it by obtaining three of more quotations to ensure the most competitive price available in the market.

5. The purchaser then forwards the Requisition attached with the quotations, if applicable, to the Chief Accountant or FC then General Manager for approval.

6. Upon the approval of the Chief Accountant or FC and the General Manager, the Purchase Requisition will then be returned to Purchasing Section for processing of Purchase Order.

The Purchase Requisition forms are available in three (3) copies:

(a) Original Copy in white for Purchasing Section

(b) Second Copy in pink for Receiving Section then forward to Accounts Department for payment

(c) Third Copy in blue for Requesting Department


PURCHASE ORDER

Purchase Orders are used to control purchase of merchandise. It authorizes the vendor to ship and charge for the mechandise specified, and it represents the buyer’s commitment to the vendor on a contractual relationship. The contract is completed by the acknowledgement, or acceptance by the vendor in writing, facsimile or e-mail.

1. Purchase orders must be used for all purchase of merchandise except:

I) Fresh food (Market list food)

ii) Flowers

2. Once the Purchasing Section receives the approved Purchase Requisition, a Purchase order will be prepared. The lowest price supplier with the most compatible quality will be selected.

3. The Purchase Order will be distributed for approval by Chief Accountant or FC and General Manager before issuing the order to the supplier.

4. The Purchasing Section is responsible for controlling and following up on the outstanding Purchase Order on a daily basis by comparing against the Daily Receiving List prepared by Receiving Section. At the end of each week, the Purchasing Manager is to prepare an Ageing Analysis of the outstanding Purchase Order, and copy of this report is to be distributed to:

i) General Manager and

ii) Chief Accountant or FC

iii) Related HOD

5. In case of any price amendments to the purchase order, Purchasing Manager and Chief Accountant or FC must initial approval for the price adjustment. Any major price deviation of more than 10 % has to be fully explained by Purchasing Manager in writing.

Purchase Order Forms are available in 3(three) copies to be distributed as follows:

(a) Original Copy in white the Vendor

(b) Second Copy in blue for Receiving Section then forward to Accounts Department for payment

(c) Third Copy in pink for Purchasing Section

DAILY MARKET LIST
1. The Daily Market List is prepared by the Kitchen Chef, approved by Executive Chef in triplicate. The distribution of the forms is as follows:



(a) 1 St. copy - Purchasing Section

(b) 2 nd copy - Receiving Section

(c) 3 rd copy - Kitchen Department

The copy to the Purchasing Section must be submitted by 1:00 pm for order on days and before 11:00 am on Saturday. Order allocation and ordering process will proceed by 2:00 pm on normal days and 11:30 am on weekend respectively. Additional orders (for last minute function) have to be forwarded to Purchasing Section by 1:30 pm on weekdays and 11:30 am on Saturday.


2. The Purchasing Section upon receipt of the Daily Market List will countersign and fax or e-mail or make a direct phone call to respective vendors for ordering process.

3. When the order has been placed, the copies of the Daily Mark List will be distributed accordingly by the Receiving Section.


FLOWERS ORDER LIST

The Flower Order List is prepared by Executive Housekeeper to be used for all weekly standing order and additional flower purchases

Distribution of the forms is as follows:

(a) 1 st copy - Purchasing Section

(b) 2 nd copy - Receiving Section then forward to Accounts for payment

(c) 3 rd copy - Retained by Housekeeping Department

PRINTED MATTER

1. The Department Head will submit proposal matter to the General Manager for approval of details contained therein.

2. Once approved, the Department Head will discuss the matter with the Purchase Manager, who will then select either of the followings:

i) Request that an Artist Job Form be filled up by the Department Head.

ii) Request that a Purchase Requisition be filled up by the Department Head.

When the draft or the artwork is prepared, the Department Head will be required to fill up the Purchase Requisition with the relevant details. The draft or artwork, which must be duly signed by the Department Head, should be attached to the Purchase Requisition.

3. The finished artwork and Purchase Requisition is to contain detailed specifications, i.e. slides/transparencies for colour prints.

The followings are required to minimize on printing cost:

(a) Proof reading to be kept at minimum after the finished artwork is sent for printing.

(b) Colour separations are kept safely for reprint and other jobs. Purchasing Section will advise all printers that they are required to return all artwork/colour transparencies immediately after printing. These colour separations etc are kept by Purchasing Section.

GENERAL CONDITIONS.

For controlling of the prices. The regular suppliers have to submit the quotation to Purchase Manager, and one copy to FC and Chef or Restaurant Manager (if the goods are food or beverage) every months and whenever there is a changing in price.

The price on PO and invoice must be the same or less than the price in the quotation, the invoice that has price over the PO or the quotation will be refused for payment.


The items with values over VND 5,000,000 should have at least 3 quotations, and be carefully checked by FC.

Every two weeks the cost controller and one staff of kitchen should do the market survey and

submit the report to FC and Chef or Restaurant Manager if the good are food and beverage

Any deviation from this policy must be approved by the General Manager

Strict adherence to this policy is expected