Operations Management A Case Study of a Hotel - VEA

Australia 

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Operations 

Management 

A Case Study of a Hotel 

Teacher Notes by Debra McNaughton, B.A., 

Dip.Ed. 

Produced by VEA Pty Ltd 

Commissioning Editor Lisa Tancredi B.A. Dip.Ed. 

Executive Producer Simon Garner B.Ed. 

© Video Education Australasia Pty Ltd 2009 

Reproducing these teacher notes 

You may download and print one copy of these teacher notes 

from our website for your reference. Further copying or printing 

must be reported to CAL as per the Copyright Act 1968. 

Suitable for: 

Business Management 

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Shortland St., Auckland 

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Facsimile: 0800 488 668 

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Website 

www.vea.com.au 

VEA 

Bringing Learning to Life 

Program Support Notes 

Senior Secondary 

28 mins

For Teachers: 

Introduction 

Operations Management – A Case Study of a Hotel 

The provision of accommodation is a highly competitive market. As tourists look for the best possible 

value for money, hotel operators must ensure that they are providing a quality venue with costeffective 

services. This program is based on the Mercure Hotel in Hobart and covers the key elements 

of its operations (the inputs and processes that create the output). The program examines the ways in 

which the design of its facility, the control of materials, the use of technology and the quality standards 

all contribute to ensuring the hotel remains productive and competitive. 

Program Timeline 

00:00:00 Introduction 

00:01:15 The basics of operations management 

00:05:13 Introducing four strategies 

00:10:17 Applying the four strategies 

00:14:56 Applying the four strategies (part two) 

00:20:10 Evaluating operations management 

00:26:20 Conclusion 

00:26:47 Credits 

00:27:37 End program 

Website References 

http://www.buseco.monash.edu.au/mkt/dictionary/ 

http://www.ami.org.au/ 

http://www.lean.org.au/ 

Other Relevant Programs available from VEA 

• Small Business Management Series -The Business Plan 

• The Four P's of Marketing Strategies 

• Introducing Operations Management - Case Study Rip Curl 

Please visit our website for more relevant programs www.vea.com.au 

VEA – Bringing learning to life 

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You may download and print one copy of these teacher notes from our website for your reference. Further copying or printing must be 

reported to CAL as per the Copyright Act 1968.


Student Worksheet: 

Before Viewing the Program 

1. Define the following terms: 

a) Goods 

b) Inputs 

c) Operations Management 

d) Outputs 

e) Processes 

f) Productivity 

g) Services 

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While Viewing the Program 

1. List two inputs. 

2. Name two processes. 

3. Name one output of a hotel. 

4. Why is the layout of facilities important in a hotel? 

5. What is a Master Production Schedule used for? 

6. How do hotels ensure they keep their star ratings? 

7. How can technology assist with quality checks? 

8. Explain the importance of storage, as part of the facilities design and layout, for a hotel. 

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9. Why is it important to establish good relationships with suppliers as part of materials management? 

10. What is a par level? 

11. List two things the Executive Housekeeper Suzie Kelly checks to ensure that quality standards are 

maintained. 

12. List two new technologies that hotels are expected to provide. 

13. List three Key Performance Indicators that can be used to evaluate the success of a hotel such as 

the Hobart Mercure. 

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After Viewing the Program 

Operations management case study 

Cathy Sinta and Tony Martino own and run a medium sized business called Delizia that makes fresh 

pasta. They supply supermarkets, and over the last ten years have established a loyal customer base. 

The pasta is made using fresh ingredients that are delivered straight to their factory in Benalla in 

Victoria. In the past some of the pasta lines were hand-made, but now machines make the pasta and 

even pack it into the plastic containers and boxes ready for delivery. 

Things started to change for Cathy and Tony when complaints started coming in stating that the pasta 

was dry and stale. Customers returned stock, demanding their money back. One of the large 

Supermarket chains has said that unless the next batch is up to scratch, it will find another supplier 

for its fresh pasta. 

1. List five inputs that are required to make the output of Delizia; i.e. the pasta. 

2. List three processes that are required to make the output of Delizia; i.e. the pasta. 

3. The operations manager at Delizia must work fast to find the source of this problem. Suggest ways 

in which improvements in the following areas could assist them to improve the pasta: 

a) Facility layout and design 

b) Materials management 

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c) The management of quality 

d) Technology 

4. Suggest two Key Performance Indicators (KPIs) that Cathy and Tony could use to determine if the 

problem of the dry pasta has been solved. 

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Suggested Student Responses 

Before Viewing the Program 

1. Define the following terms: 

a) Goods 

Products that are tangible can be stored for later use and the consumption can occur 

separately from the purchase. 

b) Inputs 

The resources that are necessary to make the product. 

c) Operations Management 

The task of managing the process that transforms resources into finished goods and/or 

services. 

d) Outputs 

The finished products (either goods or services) that result when inputs have been 

processed. 

e) Processes 

The actions performed on the inputs to transform them into finished products. 

f) Productivity 

The amount of output per worker or set of resources per period of time. 

g) Services 

Products that are intangible, they cannot be stored and the consumption usually occurs 

with the purchase, meaning that the consumer is involved directly. 

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While Viewing the Program 

1. List two inputs. 

Inputs may include: furniture, linen, electricity, water, employees, fruit, vegies and meats for 

the kitchens, computers. 

2. Name two processes 

Processes include: cleaning rooms, making reservations, checking guests in and out of the 

hotel, room service delivery, organising functions. 

3. Name one output of a hotel. 

Outputs include the provision of the guest rooms, the food served in the restaurants, the 

provision of facilities for functions and conferences. 

4. Why is the layout of facilities important in a hotel? 

Facilities need to enhance efficiency in a hotel. For this reason the public areas, such as the 

lobby, need to be easily accessed by guests and reception must be near the entrance. The 

loading bays must be close to where the most frequently ordered stock needs to be placed. In 

hotels this is near the kitchens and cool fridge areas. 

5. What is a Master Production Schedule used for? 

The MPS forecasts sales and business activity, allowing a Materials Requirement Plan to be 

generated which will outline the resources that are required for the next time period. 

6. How do hotels ensure they keep their star ratings? 

Hotels conduct regular internal quality checks and acquire feedback from customers to 

ensure that they keep their star ratings. 

7. How can technology assist with quality checks? 

Online questionnaires allow guests to provide feedback on the quality of the hotel. 

8. Explain the importance of storage, as part of the facilities design and layout, for a hotel. 

The kitchens in hotels order a great deal of perishable stock, therefore the storage system is 

essential to ensure that stock is kept in fridges, freezers or store cupboards that will prolong 

its usable condition. Wasted stock equals lost money in a business. 

9. Why is it important to establish good relationships with suppliers as part of materials management? 

If there is a good relationship with suppliers, then the quality of the goods or services can be 

guaranteed, they will meet unusual demands (such as the rock lobster example in the 

program), and lead times can be minimal. 

10. What is a par level? 

A par level refers to the minimum quantity of each item that hotel needs to have in stock at 

all times. 

11. List two things the Executive Housekeeper Suzie Kelly checks to ensure that quality standards are 

maintained. 

Any two of the following would be correct: 

Suzie Kelly checks that the laundry is washing and ironing guests’ laundry properly, towels 

and sheets are properly laundered, there is no mould or body hair in the bathroom, the 

mirrors and toilets are clean, the beds are made properly, the guest rooms are set up properly 

and the glasses and mugs are all clean. 

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12. List two new technologies that hotels are expected to provide. 

Any two of the following would be correct: 

Hotels are expected to provide widescreen TVs, electronic display boards, wireless internet 

access, electronic call buttons, electronic lock systems and a pay movie system in rooms. 

13. List three Key Performance Indicators that can be used to evaluate the success of a hotel such as 

the Hobart Mercure. 

Any 3 of the following would be correct, or the students may think of any number of others 

that would also be correct. 

Hotels could consider their operations to be successful if: 

• The room occupancy rate is high 

• Profit has increased 

• Market share has increased 

• The level of waste has decreased (especially in the area of perishable items in the 

kitchens) 

• Cash flow and turnover have increased 

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After Viewing the Program 

Operations management case study 

Cathy Sinta and Tony Martino own and run a medium sized business called Delizia that makes fresh 

pasta. They supply supermarkets, and over the last ten years have established a loyal customer base. 

The pasta is made using fresh ingredients that are delivered straight to their factory in Benalla in 

Victoria. In the past some of the pasta lines were hand-made, but now machines make the pasta and 

even pack it into the plastic containers and boxes ready for delivery. 

Things started to change for Cathy and Tony when complaints started coming in stating that the pasta 

was dry and stale. Customers returned stock, demanding their money back. One of the large 

Supermarket chains has said that unless the next batch is up to scratch, it will find another supplier 

for its fresh pasta. 

1. List five inputs that are required to make the output of Delizia; i.e. the pasta. 

Flour, eggs, water, the factory, the pasta-making machines, computers, employees, 

packaging materials, delivery trucks, electricity, cleaning materials. 

2. List three processes that are required to make the output of Delizia; i.e. the pasta. 

Mixing the pasta dough, cutting the pasta into the required shapes, cleaning the pastamaking 

machines, taking orders for pasta, packaging the pasta, developing new recipes. 

3. The operations manager at Delizia must work fast to find the source of this problem. Suggest 

ways in which improvements in the following areas could assist them to improve the pasta: 

a) Facility layout and design 

Perhaps the storage of the raw ingredients is causing them to deteriorate early, causing 

the dry and stale taste. Ensuring that refrigeration is sealed and running at the correct 

temperature, and that there is proper storage of the dry ingredients could assist with 

this. 

b) Materials management 

The problem could be that the resources (inputs) are not as good lately. If Delizia has 

changed suppliers, it would be worth testing the ingredients to see if they have the same 

properties as those when there were no complaints. Perhaps the stock is not being 

rotated properly, resulting in old stock sometimes being used. The systems of stock 

rotation could be examined to see if improvements need to be made. 

c) The management of quality 

If quality checks have not picked up this problem, then perhaps a more formal quality 

system could be introduced, such as a system based on Total Quality Management. By 

setting up teams of workers to look at the problem, concentrating on ensuring that every 

single stage of production is the best possible quality that it can be, and always striving 

to improve the quality, problems like this might become rarer. 

d) Technology 

Machines are use to both make the pasta and to pack it. The problem could be occurring 

at either of these stages. Thorough examination of the machinery, including cleaning and 

maintenance could prevent problems such as this from happening. 

4. Suggest two Key Performance Indicators (KPIs) that Cathy and Tony could use to determine if 

the problem of the dry pasta has been solved. 

Here are a few possible answers to this question: 

• If the number of repeat orders increases 

• If the number of returned products decreases 

• If there is a general increase in sales 

• If profit increases 

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Operations Management A Case Study of a Hotel - VEA

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