Premier Inn operates a central laundry that washes bed linen for several hotels. Its maximum weekly capacity is 8400 linen packs, but it processed 6720 pack...
Question 1 Report
Premier Inn operates a central laundry that washes bed linen for several hotels. Its maximum weekly capacity is 8400 linen packs, but it processed 6720 packs last week. A quality-control check found that 96 packs had to be washed again because they were stained or incorrectly folded. The operations manager is considering a just-in-time system for detergent and replacement linen. Deliveries would arrive each morning instead of holding a large store of supplies. Starbucks and Emirates have both used carefully planned supplier deliveries in their operations, but the laundry manager is concerned that a late delivery could stop work. The business wants to reduce costs without reducing the standard of its rooms.
(a) Define quality control. [2]
(b) State two costs to Premier Inn of defective linen packs. [4]
(c) Calculate the capacity utilisation of the laundry last week. [3]
(d) State one benefit of using just-in-time stock control. [2]
(e) Analyse whether Premier Inn should introduce just-in-time deliveries for detergent and replacement linen. [9]
Answer Details
(a) Quality control is checking products during or after production to identify defects and ensure that they meet required standards. [2]
(b) Defective linen packs require extra labour, water and energy for rewashing. They can delay room preparation, lead to customer complaints or refunds, and damage Premier Inn's reputation. Any two developed costs gain credit. [4]
(c)
\[\text{Capacity utilisation}=\frac{6720}{8400}\times100=80\%\]
Capacity utilisation was 80%. [3]
(d) Just-in-time stock control reduces the amount of money tied up in stock. It can also lower storage costs and reduce the risk of stock being damaged or unusable. Any one developed benefit gains credit. [2]
(e) Just-in-time deliveries could reduce cash tied up in detergent and replacement linen. The laundry may need less storage space, reducing cost or freeing space for productive equipment. Frequent deliveries can also reduce waste from old or damaged supplies.
However, a late delivery could stop washing. Hotels might then lack clean linen, rooms may not be ready and service quality could be damaged. Just-in-time therefore depends on reliable suppliers and accurate forecasts, and may increase administration or delivery costs.
Premier Inn should introduce the system only with a dependable supplier and a small emergency stock of essential detergent and linen. This retains many stock-cost benefits while reducing the risk of a complete stoppage. [9]
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