ASSESSING THE STRATEGIES OF PRODUCTION PLANNING AND INVENTORY CONTROL IN HOSPITALITY INDUSTRY

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.