Chapter 1
Fall 2021
Hisham Khalifeh
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Chapter 1
THE CONCEPTS
OF SELECTION
AND
PROCUREMENT
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Overview of
Purchasing, Selection
& Procurement
Purchasing: means paying for an item
or service.
Selection: can be defined as choosing
from among various alternatives on
various levels. For example, a buyer can
select from among several competing
brands of beef, a specific quality of beef,
a particular beef supplier, and a fresh or
processed beef product.
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Overview of
Purchasing, Selection
& Procurement
Procurement: is the process of
obtaining goods and services,
including all of the activities
associated with determining the
types of products needed, making
purchases, receiving and storing
shipments, and administering
purchase contracts.
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Overview of
Purchasing, Selection
& Procurement
Nowadays procurement deals with
technology-driven applications.
This technology enables purchasing managers to
complete complex procurement functions with a
simple click of the mouse.
Most of these types of functions are taking place
through an electronic process of selling and
procuring products or services over computer
networks; this process is known as electronic
commerce, or “e-commerce.”
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TYPES OF HOSPITALITY
OPERATIONS
The hospitality industry includes three major
segments:
The first is the commercial segment or the profit
oriented companies.
The second is the institutional segment those
facilities that are operated on a break-even basis.
The third is the military segment those operations
that include troop feeding & housing, as well as
the various military clubs & military exchanges
that exist within military installations.
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TYPES OF HOSPITALITY
OPERATIONS
The second and third segments are collectively
referred to as “noncommercial” hospitality
operations.
The following types of operations are generally
considered part of the commercial segment:
Hotels, Motels, Casinos , Resorts, Spas, Quick-
service (limited-service) restaurants, Table-
service (full-service) restaurants, Snack bars,
Food courts, Taverns, lounges, and bars,
Cafeterias, On-premise caterers, ….
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TYPES OF HOSPITALITY
OPERATIONS
The following types of operations are generally
considered part of the non commercial division
of the hospitality industry:
Employee feeding operations, Schools, College
and university dormitories and food services,
Hospitals, Extended-care facilities, Clubs,
Military installations, Camps, Public institutions,
such as the food services in some government
facilities, Religious facilities,…
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Major Purchasing
Distinctions In Hospitality
Operation Types
1-THE INDEPENDENT OPERATION
a-The small independent: is typically run by an
owner-manager who usually does all of the buying for
the business. He or she also oversees the other related
purchasing activities, such as receiving deliveries and
paying the bills.
b-The medium independent: generally involves
more than one person in the purchasing function. The
general manager coordinates the various activities that
other management personnel perform. He coordinates
the purchases of department heads, such as the dining
room manager who needs ashtrays, the bartender who
requires liquor, and the chef who needs food.
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Major Purchasing
Distinctions In Hospitality
Operation Types
c-The large independent: such as a hotel,
follows the purchasing function in much the
same way the medium independent does,
except that it may employ a full-time buyer.
This buyer purchases for the various
production departments, such as
housekeeping, maintenance, engineering, and
food service.
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Major Purchasing
Distinctions In Hospitality
Operation Types
In the past, small- and medium-sized businesses may
have had a tough time competing in the same markets
as larger companies. This is mainly because these
smaller businesses have had to pay higher prices for
many of the products that they procure because they
are not afforded the same discounts as large
companies.
The evolution of the Internet and the introduction of
e-commerce technology, have leveled the playing
field by enabling these smaller companies to procure
products at more competitive prices and to compete
with hospitality giants like never before.
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Major Purchasing
Distinctions In Hospitality
Operation Types
2- THE MULTIUNITS & FRANCHISES:
These interlocking operations organize their
purchasing differently. For example, a chain of
hotels may have a centrally located vice president
of purchasing. Moreover, the company may
maintain one or more central distribution stores.
The managers of the company-owned outlets
receive supplies from the central distribution
points under the authority of the vice president of
purchasing.
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Major Purchasing
Distinctions In Hospitality
Operation Types
In some cases the managers may order from
approved suppliers without consulting the
vice president of purchasing, but they
nevertheless need to follow company
policies and procedures.
The vice president of purchasing at corporate
headquarters may draw up some national
contracts, establish purchase specifications,
and set general purchasing policy.
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