This document discusses resource management in hospitality. It covers four learning outcomes: understanding principles of resource management and procurement; understanding finance and taxation options; understanding how procurement strategies contribute to commercial objectives; and reviewing and evaluating procurement strategies and business performance. The document provides details on procurement methods, supplier selection, finance sources, taxation computations, the procurement officer's role, sourcing issues, contract terms, and strategy evaluation techniques.

1. UNIT 11: RESOURCE MANAGEMENT IN HOSPITALITY
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LO1 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
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
UNIT 11: RESOURCE MANAGEMENT IN HOSPITALITY
LO3 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

2. 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
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LO4 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
UNIT 11: RESOURCE MANAGEMENT IN HOSPITALITY
Learning outcomes and assessment criteria
Learning outcomes
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:
1.1 discuss the methods available for managing materials, devising specifications of
requirements and the selection criteria to be applied

3. 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
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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 organizations
4.1 demonstrate how review and evaluation can be used to assess procurement strategies, for
a given commercial situation
UNIT 11: RESOURCE MANAGEMENT IN HOSPITALITY

4. 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 organisation
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.
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