Chapter 5 Inventory Control

Unlike manufacturing firms where the production of goods can be adjusted according to the demand of customers, hospitality firms do not have the ability to alter the capacity of the changing demand of guests in a short period of time. Given the relatively fixed capacity or supply, maximizing revenue through inventory control is essential for hospitality operations. This chapter covers operations inventory control extracted from the field of revenue management. First, the concept of capacity management and planning is enclosed and various capacity management tactics and inventory control strategies are explored. Next, the management and principles of space inventory through inventory-based restrictions, strategic pricing, displacement analysis, and distribution channel management are addressed. Finally, the respective applications of these principles, strategies, and tactics in several hospitality sectors are discussed.