Physical Inventory

Today I got to do physical Inventory!!!!!!!!!!!!!!!!!!!!!!!!

 Okay, so I was actually trying to be more excited about it. Physical Inventory is not the funnest thing I have done thus far, but it was a great learning experience.

There are two types of inventory physical and perpetual. Physical inventory is actually going in and counting each inventory item by hand. It is a very long process and usually involves two people; one to write the numbers down and another to actually count. Perpetual inventory is continuous. Inventory items come in and a barcode is scanned. This type of inventory computerized and is very quick and efficient. After today, I’m a big fan of perpetual inventory….

We (Ali the dietetic master student/inter and I) began in dry storage. Because we were very unfamiliar with the items it took us a while to find the product on the shelves. Many times, the name on the paper was different than the name on the can or box. We slowly made our way through three shelves. The procurement manager we were working with had been in the freezer. (That’s another fun thing about physical inventory, you have to spend hours in a freezer with purple hands and chattering teeth counting boxes and boxes of frozen corn dogs). The procurement manager finished inventory in the freezer far quicker than we did, and she was by herself! She came up to dry storage to help us count. She was amazing! Of course she has been working here for many years and when you do inventory counts every week, you get pretty good at it. She knew where everything was and quickly finished in the time it took us to barely begin.

So what’s all the fuss?

Physical Inventory counts help managers calculate Cost of Goods Sold which is Beginning Inventory + Purchases – Transfers – Ending Inventory. COGS is crucial in determining plate cost. Plate cost shows how much each plate of food is costing. They want to keep it under $2.60. This means that they are providing enough quality food for what their patrons are paying for. If it gets too high, they know they need to charge more. If it is too low, they know they can spice up the menu a little and add some expensive variety. Dianne (RD) did say that for one dining center they were struggling with too low of plate cost. So the solution? They started providing more exotic fruit. Year round, pineapple, mangos, strawberries, and other pricier produce were provided raising the plate cost sufficiently.