Purchasing through Tenders: The open tenders are called to supply certain quantity of items with specifications. The prospective suppliers apply through sealed tenders on the tender form supplied by the hotel along with the earnest money. Tenders are opened at a specific time and date in the presence of those suppliers who are present. Rates are compared and the order is placed. The unsuccessful supplier’s earnest money is returned and the selected supplier’s earnest money is retained and returned after the contract is over. The contract is signed between the hotel and supplier.

Advantages: By making an open offer through the print media a large number of prospective supplier’s can be reached and more competitive prices can be obtained.

Centralized Purchase: A chain of hotels may prefer to have a centralized purchasing system for non perishable items. All requisitions for the entire year or for specific period are sending to head office. The purchase department places order for all the hotels and dispatch the items to various hotels.

Advantages: It reduces the purchase department’s over heads and due to large quantity of ordered items more competitive rates can be obtained for all commodities.