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THE IMPACT OF STRATEGIES OF PRODUCTION PLANNING ON INVENTORY CONTROL IN HOSPITALITY INDUSTRY (A CASE STUDY OF JUBILEE HOTEL KADUNA)

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Format: MS WORD :: Chapters: 1-5 :: Pages: 50 :: Attributes: Questionnaire, Data Analysis,abstract, table of content, references :: 10,813 people found this useful

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TITLE PAGE

THE IMPACT OF STRATEGIES OF PRODUCTION PLANNING ON 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 doest not enhance profitability. In the course of the project it findings were made and recommendations were also developed to enhance profitability.

TABLE OF CONTENTS

Title page i

Approval ii

Declaration iii

Dedication iv

Acknowledgment v

Abstract vi

Table of contents vii

CHAPTER ONE

INTRODUCTION

Background of the study 1
Statement of the problem 4
Objectives of the study 5
Statement of hypothesis 6
Significance of the study 6
Scope of the study 7
Limitations of the study 7
Historical background of the case study 8
Definitions of terms 9

CHAPTER TWO

LITERATURE REVIEW

Introduction 11
1. Theories of strategies of production

Planning and inventory control 12

Production planning and inventory control in the hospitality Industry 14
An appraisal of operations in Jubilee

Hotel Kaduna 19

Production planning and inventory

control procedure 26

Assessing the strategies used and the

improvements required if any 27

CHAPTER THREE

RESEARCH METHODOLOGY

Research design 31

Research population 31
Sample size and sampling technique 32
Method of gathering data 32
Justification of method used 33
Method of data analysis 33
Justification of instrument used. 34

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

Data presentation 35
Data analysis 42
Test of Hypothesis 46

CHAPTER FIVE

SUMMARY OF FINDINGS CONCLUSION AND RECOMMENDATION

Summary of findings 50
Conclusion 51
Recommendations 52

Reference 53

Appendix 55

CHAPTER ONE

INTRODUCTION

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.

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.

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;

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

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

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.

SCOPE OF THE STUDY

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

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.

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

House keeping department
Front office department
Food and beverage department
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.

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 TWO

REVIEW RELATED LITERATURE

INTRODUCTION

The hospitality industries are an industry which requires innovative operational procedures at all times if the dynamics brought about by tourism is to be managed effectively.

A number of strategies have been suggested, however, the effectiveness of these strategies have often not been assessed to justify the reason for their adoption.

The literature review for this study was carried under the following subheads.

Theories of strategies of production planning and inventory control.

Production planning and inventory control in the hospitality industry.

An appraisal of general operations in Jubilee Hotel Kaduna.
roduction planning and inventory control procedures.

Assessing the strategies used and the improvement required, if any.

THEORIES OF STRATEGIES OF PRODUCTION PLANNING AND INVENTORY CONTROL

The theories that give production planning and inventory control is any industry in based on the need to ties every production effort to wisely and methodically controlled inventory.

Lolli (2008) states that production planning is at the center of any manufacturing process. It main purpose is to minimize production time and cost efficiently in the work place.

Production planning incorporate a multiplicity of production planning element ranging from the every day activities of staff to the ability to realize accurate delivery time for the client (Bindi 2009).

In a related development Regatteri (2007) states that with effective production planning operation at alts nucleus, any form of manufacturing process has the capability to exploit its full potential.

According to Manzine (2009) theory is an ass8umption or system accepted principles and rules of procedure based on limited information or knowledge, devised to analyze, predict or otherwise explain the nature of behaviour of a specified set of phenomena.

Theories of production planning and inventory control is that production control must be maintained at an optimum level, and inventory control is only a secondary control, whose main function is to given warning when something goes wrong and the stock tends to exceed the safe maximum value burdge (2001).

Similarly Manzine (2009) revealed that the production planning strategies are the anticipatory stock policy and increased ration policy. These strategies appear to be suitable for organization which has to manage seasonable demand with a simple and robust method.

PRODUCTION PANNING IVENTORY CONTROLLING HOSPITALITY INDUSTY

The hospitality products consist of tangible and intangible elements of foods drinks and accommodation together with the services, atmosphere and image that surround and contribute product. The hospitality industry contain many of the characteristics of service industries with the added implication of the production process.

In the word of Kinto (2003), it is the production and delivery often with a set of period of time.

Most hospitality business need a sustainable amount of investment in plant and premises.

Victor (2003) states that this creates high fixed cost/low variable cost in servicing a room which are minimal, although this itself, particularly in the luxury, hotel market, has a high fixed cost.

In the hospitality industry managing customer demand to achieve optimum volume is extremely complex.

Sheinblum (2009) opines that too few customers could mean financial ruin. Too many customer without the requires resource could lead to dissatisfaction. It makes the scheduling of resources also difficult, if too many staffs on duty leave the hospitality, no profitability. Therefore by way of planning well it will contribute to the successful operation of the hospitality business.

Hospitality industry plan their meals with available items in stock and the number of the guest they have in the rooms. The production objectives are required as well as ensuring that the operations progress as planned.

According to Lyson (2006) inventory control refers to the technique use to ensure that stock of raw-material and other supplies, work in progress and furnished good are kept in the appropriate levels t0o ensure maximum service as at when require.

Similarly, Kinto (2003) states that the controlling people and products preventing pilfering as well as improving performances checking the staff arrive on time, do not leave before time and do not misuse time in between, checking that products that is to say, the correct quantity checking to prevent waste; checking the disappearance of a quantity of food, supervising the cooking of the meat so that shrinkage is minimized and reproaching an unpunctual member of the team.

The standards of any hospitality industry are dependent on the supervisor doing his or her job efficiently and standard are set and maintained by effective control which is the function of the manager.

Function is another area in the hospitality industry and its need to be planned well for the effective management of the organization.

Victor (2003) also further said that, managing a function can be described as the service of food and drink at a specific time and place, for a given number at a known price.

Hospitality functions; social functions, business functions are sometimes called banquet however the world formal is normally used to described a large formal occasion.

For a manager to plan this function properly he has to get information in advance. In order for him asses the profit margins to be achieve a good plan is necessary.

This will then aid the control procedures and help to establish yardsticks against which the performance of function may be measured.

Function menus are usually pre-listed with the desire profit margins added to them.

These menus will generally have a standard set of purchasing and operational specifications added to them. However there is normally a flexible elements added to it. It is not usually for a banqueting manager to offer addition to the menu at o additional cost to the client in order to capture the business in a competitive environment.

Victor (2003), also said that for making the planning function properly customers are usually invited for a detail view of the venue, menu tasting. During the menu tasting the customer encouraged to discuss their requirement than food and beverage manager will gather this information. Each department has it own budget to reach, resources for each department must be deployed and used effectively in order to maximize profitability.

Expenditure for each function is controlled on daily basis. The head chef must be aware of the total food expenditure target for each function. All cost must be controlled through the careful management of resources. Staffing need to be kept to minum without comprising the quality. The function must be executed as planned in line with the clients needs.

AN APPRAISAL OF GENERAL OPERATIONS IN JUBILEE HOTEL KADUNA

FRONT OFFICE DEPARTMENT

Throughout the world more people that ever travel on business, pleasures and for other purposes. More people than ever stay at hotels. Their first impressions of an hotel from, and the way they are received leaves indelible impression. These first impressions are often the most lasting ones. Therefore, the importance of good front office in a hotel cannot be over emphasized.

Majority of hotels derived their income from the rooms. Two hotel activities are responsible for earning its revenue, housekeeping, which prepares the room and looks after the guest comfort during his stay, and the front office which sells the rooms.

In Jubilee Hotel these are in progress as the should be.

RECEPTION DESK

This is the first office of call by a guest on entering the hotel, and gets his impression about the hotel. From this section the hotel reception office deals with the general enquiries about accommodation, receiving and welcoming of guests, checking-in of guest and allocating of rooms, maintenance of room keys and generally acting as an information clerk either answering guest question directly or referring them to the appropriate department of the hotel.

BILLING OFFICE

As soon as a guest has registered, a guest account is opened. It will throughout the stay all charges and credits pertaining to the guest’s use of the hotel facilities and services. They include;

Room charge;

Restaurant- for food consumed; beverage; and laundry.

TELEPHONE (SWITCH BOARD)

The organization has a lines internal extension, that connect with the guest outside caller from the switch board and charges incurred are sent to be posted into his bills in the billing office. Persistent power outage is a problem in Jubilee Hotel.

PORTER

The head porter is traditionally a man of high status in the hierarchy of hotel, responsible for guest keys, main, car hire baggage and other guest services.

Efforts are into gear to start full car hire service at Jubilee Hotel.

RESTAURANT

The restaurant is a service area where guests are seated, make orders from the menu list and served by the waiter. In Jubilee Hotel they serve both Nigerian and Continental dishes. Only ala’ carte menu are offered in the restaurant.

ROOM SERVICE

This is when guest place order for food to be brought to their room.

Usually an extra charge is added for service when food is taken to the guest in the room, the waiter later goes back to clear the plates.

This order of meal is usually done through telephone facility i.e the guest order for a meal through a phone for room service.

BAR

There is a mini bar in Jubilee Hotel. The main bar is within the restaurant the mini bar is restricted only to Non alcoholic drink ranging from Carbonated water to natural spring, fruit juice drink and malt drinks. It functions at every hour of the day 24 hours.

BANQUETING

This type of service takes place at such occasions as luncheons, wedding cocktails, seminars, training and meetings.

There are two service in banqueting namely; plate service and buffet service. Jubilee hotel operates Buffet services.

HOUSEKEEPING

The housekeeping is a department in the hotel that takes care of guest rooms and hotel environment as a whole. It also keep forgotten items for the owners, (guest property).

ROOM MAID

The room maid have the following work to;

To every floor is attached a steward (maid for proper dressing of the rooms).
The room maid collect items needed for cleaning every morning and about their every day cleaning.
They strip off the dirty bedding lines for the new ones.
They refill the hot water flask with a clean boiling water, clean and fill up the tea accompaniment for the guest check the water glass and make it cleans.
exchange the old line for new ones which are comfortably and neatly ironed by laundry staff.

GARDENERS

The gardeners are solely responsible for the maintenance of flower plant with the premises of the hotel. They trim the flower to give uniform, beautiful shape.

LAUNDRY

This is a section under the housekeeping departments services are rendered to guest of the hotels, and to other customers not lodging in the hotel.
They also clean all the linen used in the hotel such as bed sheets, pillow cases, blankets, table cloth hand towels.

SECURITY

This section provides security to the guests and their properties. They check movement of people in and out of the hotel to avoid possible pilfering by staff and guests.

PUBLIC AREA CLEANER

They clean the public area such as toilet corridors, bars, waiting rooms reception etc.

PRODUCTION PLANNING AND INVENTORY CONTROL PROCEDURES IN JUBILEE HOTEL KADUNA.

THE KITCHEN

The kitchen is a place where food is prepared cooked and portioned. The kitchen produces both Nigerian and continental dishes.

In jubilee hotel production planning and inventory control procedures is done in the following format.

The chef is the over all head of the kitchen and He/she reports directly to the food and beverage manager.
He/she is responsible for signing and collecting all the food items from the store. He makes requisition for the things need in the kitchen.
He takes note of the profit margin as regards to food.
He calculates the sale for each day and keeps record of daily sales for the purpose of compassion i.e the cost of food items used and the total amount of sales. This is done in order to know if the business is at loss or profit.

The kitchen produces A la’ carte menu and banqueting menu.

ASSESSING THE STRATEGIES USED IN JUBILEE HOTEL IN ALL THE VARIOUS DEPARTMENTS.

THE FRONT OFFICE DEPARTMENT

Front office it is situated near the front hall or lobby of the hotel and it’s function include making reservation, confirmation of reservation, welcoming, registering and checking in of guests, selling accommodation and other service, offering and receiving information.

The front office of Jubilee Hotel is operated manually. For them to improve their services they should introduce the method of using computer to handle their activities in the hotel. By using computer it will handle information accurately quickly and more economically.

RESTAURANT AND ROOM SERVICE

The restaurant is a service area where guest are seated and make order from the menu list and served by the waiter. In Jubilee Hotel there is only one restaurant which serve 40 guest at a time.

The restaurant serve both Nigeria breakfast, and like wise lunch and dinner.

In Jubilee Hotel the only service A la. Carte menu. For them to improve more in their service they should also serve table d’ note menu to enable them provide guest with immediate food.

HOUSEKEEPING

The housekeeping is a department in the hotel that takes care of guest rooms and hotel environment as a whole.

The strategies that Jubilee Hotel used in terms of light, that which affects many business today.

The hotel only provides light in the night and guests complain of not enjoying light for 24 hours.

For hotels to satisfy their customers they should provide 24 hours light. To do that they may need to increase the price of accommodation.

After all, customer’s satisfaction is the only difference between the success or failure of hotel operations.

Besides, the customer enjoy a much better attention and faster service at a time when required thereby giving them value for their money.

The plan production planning and inventory control in hospitality industry is to pan meals with available items in stock and the number of the guest they have in the rooms so that they can avoid these costs that they may be associated with carrying too much stick or tool low stock level.

The assessing strategies of be use in the hotel should be improved since they need to be giving then customers value for their money no matter how expensive the accommodation, so far they get what they want.

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 RESEARCH DESIGN

The sunny research method was used for this study. This was considered appropriate because survey design generally can be used to effectively investigate problems in realities settings. The survey method have the advantage of collecting as many data as possible through the process of questionnaires interview schedule, it equally gives one the chance (advantage) of giving closer to the respondents.

The survey design will also allow the researcher to examine several variable and used multivariate statistics to analyzed data.

3.2 RESEARCH POPULATION

The population of this study comprises 300 staff of jubilee hotel Kaduna.

Out of a working population of 50 were selected for the basis of drawing conclusion about the subject matter.

SAMPLE SIZE AND SAMPLING TECHNIQUES

Random sampling techniques was used in selecting the population of the study in which a total of fifty (50) which representing 10% of the population as agreed by Rosco (1975)

METHOD OF GATHERING DATA

The questionnaire were designed and distributed to respondents and retrieved by the researcher.

The questionnaire designed are administered to (50%) respondents to gather information.

JUSTIFICATION OF METHOD USED

The researcher design questionnaires do not call for names, signature or other form of identifications, respondents were able to be more sincere and objective in their responses, likewise, the use of direct matter experts in related filled of the study, knowing the essence of the research will want to supply every information as connect and reliable as possible.

METHOD OF DATA ANALYSIS

The data collected has been presented in tables and simple percentage for the purpose of drawing conclusions and suggestion.

Researcher used chi-square

Xz = E [O – E ]z

Where O = Actual Value

E = Expected Value

Z = constant.

JUSTIFICATION OF INSTRUMENT USED

The researcher considered survey methods more suitable because it enables the researcher to obtain all the relevant facts and the required information regarding the production planning and inventory on the organization.

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

DATA PRSENTATION

This chapter presents in sequence the various data obtained from the organization (Jubilee Hotel) for the purpose of the study. The data are presented in tabular form and not all members of staff were served with the copies of questionnaire. They were given on simple selected random sampling. Fifty (50) copies of questionnaire were administered.

Question 1: Through those who plan for meals are?

Table 1

OPTION	NO OF RESPONDENT	PERCENTAGE
Kitchen staff	4	8
Head chef	9	18
Supervisor	16	32
Manager	21	42
TOTAL	50	100