Activity Based Costing (ABC) as an Approach to Optimize Purchasing Performance in Hospitality Industry

ABC (Activity Based Costing) system has proved success in both products and services. The researchers propose using a new model through the application of ABC approach that can be implemented in purchasing department as one of the most dynamic departments in service sector to optimize purchasing activities performance. The researchers propose purchasing measures, targeting customers' loyalty ensuring the continuous flow of supplies. The researchers used the questionnaire as a tool of data collection method for verifying the hypothesis of the research. Data obtained was analyzed by using Statistical Package for Social Sciences (SPSS).The results of the research based on limited survey that have been distributed to number of hotels in Great Cairo region. Our research was targeting three hundred purchasing manager and staff through five star hotels. It is recognized that further research is necessary to establish the exact nature of the causal linkages between proposed performance measures and strategic intent in order to gain insights into practice elsewhere