UNIT 11: RESOURCE MANAGEMENT IN HOSPITALITY

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Unit 11:
Unit code: QCF level: Credit value:
Resource Management in Hospitality
D/601/1794 4 15

Aim

This unit will enable learners to gain understanding of the principles and application of resource
management to a commercial operation, including the contribution of procurement strategies.

Unit abstract

Procurement is about the input of goods and services and the interface between the supplier
and the client. This unit gives learners an understanding of procurement strategies as well as
the techniques of financial accounting, and establishes their importance in the sector. The unit
shows how procurement contributes to profit and how it helps to maintain a competitive edge.
Learners will carry out a review and evaluation of procurement strategies within a named
organisation.

1 2 3 4
Unit content
LO1 Understand the principles and application of resource management to commercial
operations

1. Understand the principles and application of resource management to commercial operations
Methods: selection; acquisition; maintenance; replacement criteria Principles: procurement
strategy; specification; supplier identification; selection criteria; working with specialist suppliers;
stock control

LO2 Understand the suitability of various forms of finance and taxation available to UK business
in general and the hospitality sector in particular

2. Understand the suitability of various forms of finance and taxation available to UK business in
general and the hospitality sector in particular Internal: managing the elements of working
capital to free resources; internally generated funds; retained profits External: short-, medium-
and long term; caring; risk and reward Cost of capital: equity and loan capital costs; weighted
average cost computations Systems: the main features of income and corporation tax;
schedules; rates; personal and capital allowances; tax credits and debits

LO3 Understand how procurement issues and strategies contribute to the achievement of
commercial objectives through purchasing power

3. Understand how procurement issues and strategies contribute to the achievement of
commercial objectives through purchasing power Systems and processes: standard
specification; tendering; estimating/quoting; methods of procurement eg centralised, contract,
lease; Pareto analysis; just in time (JIT); equipment; materials; services; terms and conditions
Procurement officer: role; assessing operational needs; selecting suppliers; quality and quantity
control; timing; discounts; receipt and control of purchases; wastage factors; company policies;
budgetary restrictions Risks: financial; physical; task duplication; direct and indirect costs; effect
on the internal and external customer; quality issues; legal implications; effect on process and
outcome activities of organisations Managing procurement: profit opportunities; direct and
indirect cost-saving opportunities; minimising risk; maximising profit; approved supplier lists;
evaluating the best deal; performance indicators and benchmarking Contract: definition;
different forms; parties; essentials for a valid contract; rules of offer and acceptance; terms eg
express/implied, conditions/warranties; vitiating factors eg misrepresentation, fundamental
mistake; breaches; fraud Sourcing issues: method of supply eg buying products/services,
tendering, subcontracting/outsourcing; value for money; hygiene factors; range; choice; service
guarantee; legal and contractual compliance; trace origin data; yield; methods of payment;
credit and price; negotiating skills Evaluation: communication; finance; delivery; compliance with
specified requirements; packaging; industrial relations; attitude to customers; sample testing
and defect elimination Pricing management: techniques; negotiating price reductions; controlling
or resisting price increases; quantity discounts; prompt payment discounts Management
strategies: competition between suppliers; developing profit margins to increase financial
returns; releasing cash and capital by minimising stock; negotiating extended credit; determining
the right quality for the right application; negotiating and developing delivery schedules

LO4 Be able to carry out a review and evaluation of procurement strategies and business
performance within named organisations

4. Be able to carry out a review and evaluation of procurement strategies and business
performance within named organisations Review: standard specifications; terms and conditions;
monitoring; redeveloping strategy; contemporary developments; comparing and contrasting
purchasing options Evaluate: cost models eg return on investment (ROI), productivity gain,
human resource benefits


Learning outcomes and assessment criteria

Learning outcomes
Understand the principles and application of resource management to commercial operations
Understand the suitability of various forms of finance and taxation available to UK business in
general and the hospitality sector in particular Understand how procurement issues and
strategies contribute to the achievement of commercial objectives through purchasing power Be
able to carry out a review and evaluation of procurement strategies and business performance
within named organisations.

On successful completion of this unit a learner will:
LO1 Understand the principles and application of resource management to commercial
operations

Assessment criteria for pass
The learner can:
LO1 Understand the principles and application of resource management to commercial
operations
1.1 discuss the methods available for managing materials, devising specifications of
requirements and the selection criteria to be applied
1.2 discuss the principles involved when procuring equipment and the ongoing requirements
over the life of that equipment

LO2 Understand the suitability of various forms of finance and taxation available to UK business
in general and the hospitality sector in particular
2.1 analyse appropriate strategies for the efficient management of working capital to meet a
range of financial needs
2.2 evaluate the main sources of finance currently available to UK businesses in relation to their
suitability in meeting long-, medium- and short-term needs
2.3 compute personal and business tax liability for sole traders, partners and limited companies


LO3 Understand how procurement issues and strategies contribute to the achievement of
commercial objectives through purchasing power

3.1 establish a process to manage the procurement function, outlining management strategies
in relation to pricing techniques for a given commercial situation
3.2 assess the role of the procurement officer, explaining the importance of the essential
components, terms and conditions of a specimen contract
3.3 evaluate the sourcing issues for a given procurement situation, analysing the management
techniques used to appraise and evaluate suppliers

LO4 Be able to carry out a review and evaluation of procurement strategies and business
performance within named organisations

4.1 demonstrate how review and evaluation can be used to assess procurement strategies, for
a given commercial situation
Guidance

Links
This unit can be linked to the following units:

Unit 18: Facilities Operations and Management
Unit 19: External Business Environment.

This unit links to the following Management NVQ units:
B8: Ensure compliance with legal, regulatory, ethical and social requirements
D2: Develop productive working relationships with colleagues and stakeholders
E1: Manage a budget
E2: Manage finance for your area of responsibility
E3: Obtain additional finance for the organization
F3: Manage business processes.

Essential requirements

Purchasing and procurement textbooks must be supported by case studies. Access to
procurement sections of local organisations, if possible, provides a useful information source.
Part-time learners working in procurement can be used as a resource by sharing their
experiences of different business approaches to procurement.

Employer engagement and vocational contexts

A visiting speaker in resource management, from the hospitality sector, will enhance delivery of
this unit.

BH027242 Edexcel BTEC Levels 4 and 5 Higher Nationals specification in Hospitality
Management Issue 2 May 2011 Edexcel Limited 2011