Assessing The Strategies Of Production Planning And Inventory Control In Hospitality Industry (A Case Study Of Jubilee Hotel Kaduna)

Project and Seminar Material for Business Administration and Management BAM

Assessing The Strategies Of Production Planning And Inventory Control In Hospitality Industry (A Case Study Of Jubilee Hotel Kaduna)


Abstract


The aim of this research is to look at and asses the strategies of production planning and inventory control in the hospitality industry. This research work stated with a background on production planning and inventory control strategies. Then the research tried to establish an understanding of production planning and inventory control. And the emphasis of this research in on Jubilee Hotel, Kaduna. Furthermore, the rationale for the research was highlighted. In addition works be different authors were consulted and the authors duly acknowledged. The research covers a population of 300 and sample of 50. Questionnaire were administered to all respondents which they all responded. For the research to have meaning, hypothesis were developed and tested.

The hypotheses developed are;

  • H1: Production planning and inventory control in hospitality industry enhance profitability.
  • Ho: Production planning and inventory control in the hospitality industry does not enhance profitability.

In the course of the project it findings were made and recommendations were also developed to enhance profitability.


Chapter One


Introduction

1.1 Background of the Study

Hospitality industry is one of the leading industries in the world;

It contributes to prosperity creation and further economic development of a country; it covers hotel, resorts, and travel as well as restaurant businesses.

These services business are mutually depend increase in tourism will ultimately lead to improvement in resorts, restaurants, hotel including travel industries.

This study basically concerned with assessing the strategies of the production planning and inventory control in hospitality. This will consequently access the extent to which stock can be controlled.

Production planning and inventory control is a management function that involves planning organizing, directing, coordinating, motivating, staffing and controlling of activities in the store and inventory control.

On the other hand it can also be defined as the art and science of achieving objective of the store in an organization.

A fundamental problem currently faced by hospitality according to Karlin and Zipkin (2009) is the seasonal demand for their products. This problem is very common and concerns a wide variety of products such as food stuff, functions and banqueting and many other applications.

The seasonal demand issue is difficult to access for both the theorist and practitioner. The problem requires the optimal combination of inventory and production rates for each product in each time period to be found; principal question is to determine the product quality in each period so as to minimize the discounted costs of production, inventory storage, and cost sales. This type of demand usually creates more complex problem because firms usually have insufficient capacity to meet demand in high demand period.

This ultimately impacts on planning of production process as a whole.

The main thrust of this study is to map out strategies to solve the problems of seasonality of the perishable goods which is very prevalent in the Nigerian hospitality industry.

The central question here is, how can menu planning guests, and what range of perishable food items can be stored and over what period of time?. As opined by Patrick (2009) combinatorial optimization which means combining planning and inventory control to optimize guest satisfaction in the running of hospitality business remains one of the mathematical challenges.

Strategies directed towards confronting these challenges are many and varied, depending on the methods of meal preparation service and the variety of customer’s satisfaction where stocks are produced independent of orders because there is a need to supply customers immediately with good meals from that stock.


1.2 Statement of the Problem

Most hospitality industry today faces one or more problems. This problem of seasonal availability of food items is common to all hotels hence difficult to manage efficiently.

In terms of perishable foods especially, it affect production planning in the hotels.

Since local storage facilities are virtually absent, there is acute shortage of certain items at certain tune of the season and this is accompanied by serious price fluctuation.

Also the preference of customers affects the planning of the menu to satisfy the guest need.

Therefore, the problems enumerated has necessitated this study of assessing the strategies of production planning and inventory control in hospitality in Kaduna state. This is geared towards enhancing efficiency in the planning of menu meals service to customer preference and price fluctuation. Other wise the meals planning would run into problem that will hinder the attainment of stated goals and objectives of the organization.


1.3 Objectives of the Study

The main objective of the study is to asses the strategies of production planning and inventory control in the hospitality industry in Kaduna state with particular reference to jubilee hotel

Specifically, the study seeks to;

  1. Determine production planning and inventory control in the hospitality industry.
  2. Assess how jubilee hotel copes with production planning and inventory control in the face of seasonal availability of food items.
  3. Identify strategies to serve as a platform for future improvement in the area of purchasing food items.
  4. Determine how these strategies can help in making better production planning and inventory control.

1.4 Statement of Hypothesis

  • H1: Production planning and inventory control in the hospitality industry enhance profitability
  • Ho: Production planning and inventory control in the hospitality industry does not enhance profitability

1.5 Significance of the Study

The result of this study will be useful to all in hospitality industries. Other restaurant may also utilize the finding of the study for training their staff about the need for proper production planning and inventory control it can be used by many hotels and catering establishment in presenting seminar on how resources can be controlled.

Implementation of the recommendation base on the findings of this study will help any of the hotels to plan properly and control the kitchen and prevent unnecessary wastage of meals.


1.6 Scope of the Study

The study is limited to the production planning of menu and food items inventory control in hospitality industry.


1.7 Limitations of the Study

The research encountered a few problems that limited that over all output of the research work.

The researcher had some financial constraints and time limitation, which involved combination of academic schedule with research time.


1.8 Historical Background of the Case Study

Jubilee Hotel was Established in the year 2005. it is a medium size hotel located at No 72 Kakau Road, Abuja express way, Gonin Gora Kaduna.

The hotel was a total of 3 studio rooms, 24 standard rooms, and 4 business suite from the design of its organization structure Jubilee hotel is being supervised by a Managing Director.

The board, therefore serves as the highest policy making body for the organization, it meets quarterly.

The management team of Jubilee hotels is headed by the Managing Director who in turn is supported by the Executive Director; the Hotel manager and the accountant.

There are 4 principal departments

  1. House keeping department
  2. Front office department
  3. Food and beverage department
  4. Security department

Each department is headed by a Manager who reports directly to the general (Hotel) Manager.

The general Manager in turns report to the Managing Director on operational matter and to the Executive Director (finance investment) functionally.


1.9 Definitions of Terms

YM:

Yield manager

HTF:

Hospitality training foundation

HCMA:

Hotel and Catering Management Association

WTTC:

World Travel and Tourism Council

P.P.A.I.C:

Production planning and inventory control

Stock control:

A system materials that is adequate to meet operating requirement of the required quantity and quality employed to maintain.

Control:

Maintaining correct receipt, correct issues good storing to avoid deterioration.

Minimum stock:

A stock selected as the minimum desirable which is used as an indicator to show when stock have dropped too low.

Maximum stock:

A stock selected as the maximum desirable which is used as an indicator to show when stock have dropped too high.

Inventory control:

The issue of stock to be controlled in order not to run short or wasted. Have the right goods in the right quantity at the right time. Inventory control, include raw materials, work-in-progress and furnished goods. Inventory.


Chapter Five


Summary of Findings Conclusion and Recommendations

5.1 Summary of Findings

Based on the analysis in the previous chapter the following are the findings of this research
It was found that half of the staff working in the inventory control have not acquired relevant background of the strategies functions.

Proper planning was not mentioned, this make it very difficult to adequately account for items.

The storage facilities are not in good condition, they need expansion are replacement for accommodation of more items.

There are few attendants to clear and tidy up the inventory control.


5.2 Conclusion

In view of the fact that the importance of production planning and inventory control both of the private and public sector cannot be overstressed. The researcher wishes to conclude that both planning and control of inventory in Jubilee hotel need to be improved as a major area. Organization has come of age and as such cannot afford unnecessary items wastage. In as much as the application system remain the same, the system can only work satisfactorily when the right cumber of staff are managing the affairs of the organization. If the application of planning and inventory control is allowed in to the hand of management and the organization stands to benefit from the system and it will enhance the profitability.


5.3 Recommendations

After a careful study of production planning and inventory controlling the hospitality industry, the researcher of this project wishes to put forward the following recommendation to Jubilee hotel management.

  1. It is believed and hoped that accepted and proper implementation in conjunction with all relevant order at a lot of items purchase and cost shall be minimized and there will be improvement in the services
  2. An purchasing section should be built to purchase what ever items need to be purchase in to the organization for safety to avoid deterioration.
  3. Training and re-training of the staff should be emphasized, because of strategies to be use in production planning and inventing control.
  4. An adequate storage facility conducive for modern production planning and inventory control in order to perform it service function effectively.

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