West Visayas State University

Luna Street, La Paz, Iloilo City

A Case Analysis of
THE FEASIBILITY OF PRODUCTION PLANNING AND CONTROL SYSTEMS IN THE
FOOD BEVERAGE UNITS OF LARGE-SCALE ACCOMMODATION MANAGEMENTS
(A Practice Study)

Presented to
DR. LUIS ABIODA
VPAA

In Partial Fulfillment of the Requirements for the Subject:

MHM 504 TOTAL QUALITY MANAGEENT WITH CURRENT TRENDS AND GLOBAL
ISSUES IN HOSPITALITY AND TOURISM

By

KENDRICK A. CALLAO
May 24, 2012

I. Point of View

Kendrick A. Callao a graduate of Bachelor of Science in Hotel and

Restaurant Management at Western Institute of Technology last March 29,
2012. He is presently connected with St. Paul University Iloilo teaching as a
full-time instructor.

II. Problem

Background of the Problem

Profile of the Population

The practice study for the aim of the research has been done in the 4
or 5 star large scale hotel enterprises specifically in their Food & Beverage
Units in the region of Antalya, Turkey. The researchers reason for choosing
Antalya as a pilot region for the research is that the number of enterprises in
Antalya is near the total number of enterprises in Turkey. For this reason the
enterprises, which the practice study has been done, were chosen as the 4
star hotel managements and 5 star hotel managements.

The universe of the research generally forms the 4 and 5 star hotel
managements in Turkey. The universe of the study also forms the 4 and 5

star hotel managements in Antalya. A total of 40 managements including

chosen 13 of 4 star and 27 of 5 star hotel managements form the model of
the research to compare the feasibilities. When the rates of fullness of the
managements were examined it was determined that they started to
increase in June,

2005 and the functions

of administration in the

managements started to be activated in this term. It is because of that

reason the data of the research was gathered in June of 2005.

The 13 of hotels (32.5%) are 4 star, the 27 of them (67.5%) are 5 star
hotel managements. The 38 of hotels (95%) are characterized in private;
the 2 of them (5%) are in foreign partnership management. As a
characteristic

of

possessiveness,

the

16

of

enterprises

(40%)

are

independent; the 24 of them are chain hotel managements. Finally, the

number of enterprises which were stated their practicing in the food and
beverage departments with the aim of production planning and control is 18
(45%) and the number of the ones stated not practicing is 22 (55%).

Industry Background

Global Sector
The global food and beverage market is expected to reach USD 3,840
billion in 2010. It was USD 3,500 billion in 2007, and thus has grown by
approximately three percent per annum despite the recession. Emerging
markets such as China, India and Brazil are seen as drivers of growth as the
recession contracted consumer spending in developed markets. On the other
hand, the rising price of raw materials such as animal feed, energy, and
other commodities such as packaging materials are concerns for the
producers. In response to the global economic downturn, it is observed that
consumers have curbed their spending on non-essentials such as home
furnishings. However, spending on essentials such as food and beverage has
remained fairly robust. Although the economic downturn has had an impact
on

spending

habits

and

priorities,

concerns

for

quality, health

and

sustainability still play an important role. For instance, sales of organic foods
have remained broadly stable in the US. Food safety concerns are expected
to grow as stated in the Top of Mind survey of the CIES (The Consumer
Goods Forum). It is expected that in 2010 and onwards, there will be even
more focus on food safety initiatives, as food and beverage companies focus
on growth in emerging markets, which tend to lack the infrastructure and
pervasive standards. The food and beverage industry is highly fragmented,

with the top ten companies in 2007 accounting for only 12.9 percent of the
global market. In terms of the operators in the food chain, there is a highly
concentrated retail sector where in most EU countries the three largest food
retailers represent more than 40 percent market share, and in the Nordic
countries even more than 75 percent. The aggregate level of global exports
(and imports) in 2007 was USD 375 billion. The EU plays a key role in world
trade as the worlds largest exporter and importer of food and beverage
products worldwide (excluding intra-EU trade).
However, the share of the EU in the global export market for food and
beverage products declined from 1998 to 2007 (from 24.6 percent to 19.8
percent) mainly due to the increasingly strong pressure from Brazil and
China whose respective shares as of 2007 stand at 7.4 percent and 6.5
percent. Value-added growth in the EU food and beverage industry has
begun to stabilize at +2 percent over the past few years, whereas the rates
for China and Brazil reached 22 percent and 14 percent respectively between
2006 and 2007.9

Domestic Sector (Turkey)

Production in the food and beverage sector reached TRY 8,852 million
in 2009, which constitutes 18-20 percent of the countrys production as a
whole.11 It is largely dependent on the agricultural sector in Turkey. A wide
range of crops grow in Turkey helped by the generally benign climate.

Significant sub-sectors within the Turkish food and beverage industry include
meat and meat products, baked products, dairy products, fruits and
vegetables, oils, confectionery, alcoholic and non-alcoholic drinks, soft
drinks, ready-made food and baby food.

Results of the Study

Production planning and control systems are among the methods that
could be applied in order to eliminate the problems about production and
reduce the costs in large scale hotel managements. These possible systems
are Optimized Production Technology (OPT), Material Requirement Planning
(MRP), Manufacturing Resource Planning (MRP II), Just in Time (JIT) an
Enterprise Resources Planning (ERP).

In this study, the factors which occurred in the large scale hotel
establishments and spoiled the amount and balance of production were
examined in the tourism sectors own interiordinamic. Also the measures
which were taken about reducing the costs based on these factors, were
investigated.

As

result,

production

planning

and

control

systems

applicable, which was one of the measures taken to prevent the factors
which spoiled the amount of balance of production in the food and beverage
departments in the large scale hotel enterprises were examined.

According to the study, the difference between the enterprises

practicing production planning and control systems and the ones not
practicing is determined especially by the studies for preparation related to
systems, the practicing fields of systems, the arrangements to be made in
the base of education related to systems production systems in the food and
beverage departments and the results from the systems. When cost control
and analyzing studies in the enterprise are evaluated, factors determining
difference appear especially in the matters of raw material stocks, interval
stocks, the conditions for storing, the amount of materials in service, cost
control being done by a unit of persons and the practices in the result of
control, and factors damaging the activities for cost decreasing. Finally, the
feasibility of production planning and control systems into tourism sector is
determined on the benefits of system practicing.