The mathematics model designed to calculate the appropriate order size of nonperishable inventory items by incorporating demand, ordering, or set up cost, and holding or carrying cost. The objective of this model is to minimize the total cost (carry cost and ordering cost) incurred.
Published in Chapter:
Sustainable Inventory Management in Hotels
Tipparat Laohavichien (Department of Technology and Operations Management, Kasetsart University, Thailand) and Lawrence D. Fredendall (Department of Management, Clemson University, USA)
Copyright: © 2023
|Pages: 22
DOI: 10.4018/978-1-6684-4645-4.ch013
Abstract
The objectives of this chapter are to present inventory planning and control systems in the hotel industry and to examine how to use the existing inventory management practices in the hotel industry to promote sustainability based on the concept of a triple bottom line (i.e., economic, social, and environmental sustainability). Yield or revenue management is the method most hotels use to manage their perishable inventory (rooms). The basic principle of yield management is that hotels achieve maximum revenue by matching customer needs with the right room rate and the right time of sale. Yield management directly promotes economic and social sustainability but indirectly fosters environmental sustainability. In addition, techniques and models for managing nonperishable hotel inventory are discussed, including the EOQ model, JIT and Lean systems, and the ABC classification. Moreover, radio-frequency identification (RFID), the technology used to support the effectiveness of a sustainable inventory management system, is discussed, and finally, further research is provided.