management. After all, what is their product on offer? For hoteliers, their inventory
are hotel rooms rented each night; for restaurateurs, it is food and beverages that are
purchased or prepared and that do not end up being consumed and paid for by patrons.
Inventory management can be difficult for the hospitality industry because of the
and stocktaking. However, do not fall into the trap of thinking that it can simply be
forgotten about as this will cost you thousands per year in revenue. Here we consider
Inventories often constitutes the most significant part of current assets of large
companies. In the public limited companies, inventories are approximately 60%
of current assets on the average. The US Burean of the census stated that
inventory and accounts receivable ate the two largest accounts of equal
magnitude and together they comprise almost 80% of current assets and over
30% of total assets for all manufacturing companies in 1982.
(creating and managing demand) and yield management (maximising returns). The
investment backing a hotel is tied up in its real estate and the returns can only be
By driving prices up during high peak periods and knowing how much to discount
prices by to ensure rooms are rented during low peak periods, hotels can maximise
their return. Through dynamic pricing, businesses can provide discounts and
Distribution
Hotels generally advertise their rooms through multiple channels, such as online travel
and this involves calculating the minimum numbers of rooms needing to be sold for
any given period by each channel. In doing so, you then have the ability to make
Market segmentation
Being aware of your market and the variable preferences, demands and affordability
your room sales across the various channels. Not only does this help in managing your
existing rooms, but it can also allow you to capture more of the market and increase
sales and revenue. Flexibility is an important virtue required of hoteliers and being
able to understand your clientele and adapt to their needs is vital to building loyalty
might not be single entities of uniform shape and size that can be easily counted.
However, this is even more the reason for special attention to be paid to inventory
Snacking on the go
applies particularly to staff meals where fruit or other food items are quickly grabbed
for consumption on the job. This is indeed generous and will likely go a long way
with staff, however over time, this equates to thousands of dollars not accounted for.
Simply account for it in inventory otherwise there will always be issues and
A big area for constant improvement is the ordering system which comprises the
software and the ordering practices. Keeping orders stagnant over time without basing
them on real data of consumer trends is a sure way to increase wastage and decrease
the bottom line. A useful rule of thumb is to look at the previous six weeks of sales
and use that as a gauge for future orders, making sure that it is consistently adapted for
fluctuations.
In this article, we have briefly looked at some key components of inventory
management for those in hospitality. Of course, as with any industry and the
management of inventory, there is invaluable software available to make the task that
much easier. Seek out tools that can help as managing inventory is the cornerstone of
business success.
mechanics for managing as well as keeping track of input/output assets, cash inflows
and outflows and basically all the transactions that are taken within the hotel vicinity.
Bomah
Currently, the hotel is having problems in managing the existing stock that is used as
input. Difficulty in allocating, controlling, managing and directing the usage of the
available resources within the hotel premises. As a result, this has led to accumulation
of losses in both the short and long run, misallocation of the available resources and
hotel has got problems due to the way they handle their businesses. The hotel incurs
huge losses daily due to miscalculation and mismanagement of resources for example
the accountant has a lot of work which is done manually and therefore not effectively
completed for example taking records of food consumed and the issuing of resources
sometimes the receptionist also fails to fully account for the client’s needs like
documents.
Our hotel inventory system will ensure that all the hotels services and goods are
indicated for both the accountant and receptionist to use. The accountant will have all
the stock available with in the hotel stone indicated down so that the hotel does not
run out of stoke which limits services. The system will compute all the items sold and
get the price income of the day. For the receptionist the system will indicate all the
available rooms and resources for the clients which will enable he/she to budget for
the charges per clients stay and fine for those who miss use the rooms.
practices are improved. In this section our system compares its proposed performance
system.
keep the most economic amount of one kind of asset in order to facilitate an increase
in the total value of all assets of the organization, human and material resources. In
systems can be used to tag and track employee uniforms and have those sent to
laundry (Collingnon, 2005). Hotel management technologies can also be used for in-
room assets so that hotels can make sure all the services are offered to customers in
their allotted guestrooms. Collingnon (2005) explains that hotels can manage lost and
stolen garments, linens and sheets using this system. It also facilitates in providing
To reduce stock outs and improve performance, businesses should employ category
shelf space allocation must be a priority as the amount of inventory on display may
stimulate demand. Borin et al. (1994) recognizes the effects of shelf space allocation
on stock outs and operating costs and proposes an optimization model for the joint
product assortment and shelf space allocation decision and shows that ignoring the
effects of stock outs can yield less than desired results. Eroglu et al. (2011) posits that
shelf space management has a direct effect on shelf stock outs and suggests that
managers should allocate shelf space not only on the basis of case pack quantity but
conversion period is a precursor to increasing stock out costs and will eventually
Financial management.
Sushma & Phubesh (2007) in their study of 23 Indian Consumer Electronics Industry
firms established that businesses’ inventory management policies had a role to play in
their profitability performance. Lazaridis & Dimitrios (2005) in their study of 131
inventory will lead to tying up excess capital at the expense of profitable operations
and suggested that managers can create value for their firms by keeping inventory to
an optimum level. Also, Rajeev (2008) in his study of 91 Indian Machine Tool SMEs
cost established that effective inventory management practices have a positive impact
on the inventory performance of businesses and also have an eventual effect on the
performance of businesses.
Juan & Mertinez (2002) in their study of 8872 small and medium-sized Spanish firms
also demonstrated that managers of firms can create value by reducing the number of
distribution costs; and enables businesses track items and their expiration dates
the costs of maintaining certain levels of inventory as there are costs involved in
holding too much stock and there are also costs involved in holding too little hence the
need to put in place an effective stock management system to ensure reliable sales
forecasts .As Ross et al. (2008) observed, the Economic Order Quantity (EOQ) model
is an approach of determining the optimal inventory level that takes into account the
inventory carrying costs, stock-out costs and total costs which are helpful in the
observed that large businesses rely more on quantitative techniques, such as EOQ and
small firms make use of management judgment without quantitative back up.
Decision making management
consumes physical space, creates a financial burden, and increases the possibility of
damage, spoilage and loss. On the other hand, too little inventory often disrupts
business operations, and increases the likelihood of poor customer service (Dimitrios,
2008).
In the hotel industry, Collingnon (2005) suggested that in many luxury and upscale
end furnishings, electronic equipment and fine china and silverware” can be tagged
rather than protecting them 24/7. While saving on the costs of maintenance, these
technologies can also reduce the costs of labor. Smart RFID tags can be used for
items are rightly placed. It also facilitates in tracking items that may need servicing,
2004). While protecting the assets and tracking the inventory through RFID
Information management
In the past, researchers apart from hotel industry have stated that RFID technologies
can be used to identify the “available inventories” and provide information of the
assets in organizations (Kok et al., 2008; Hau & Ozer, 2007 & Atali et al., 2006).
While inventory and system user errors do occur quite frequently, there are not many
studies that have identified them. While the traditional inventory management
methods presume to have 100% reliable information, in actual fact most hotels have
only uneven guesstimates of actual inventory. In hotel or lodging literature there are
very few studies that focus on implementing RFIDs for asset and inventory
on going and external inventory management to which a hotel embraces its crucial
and retrieve data efficiently. It provides easy access to data and provides data security
Some of the tasks, using a computer system, are to store and manage data. To handle
(DBMS) is needed. A DBMS stores, processes and retrieves data. A database is a pool
of data that has been edited and is shareable between application systems linking data
stored in different files together to ease access. The simplest way to reduce the
term implies that data should be stored as a common pool shared between application
systems. This pool of data sharable between applications is the enterprise database.
Data which is unnecessary duplicated is redundant in the sense that duplication adds
no information; hence we use the term non redundant in the database. A collection of