Budgeting and Inventory Control Flashcards

What is a 'capital expenditure' in the context of a housekeeping budget?

Answer: A large purchase of long-term assets such as new laundry equipment

Capital expenditures are investments in long-term assets like equipment or furniture that provide value over multiple years.

A property uses 3 rolls of toilet paper per occupied room per day. With 150 occupied rooms, how many rolls are needed for a 7-day period?

Answer: 3,150

3 rolls × 150 rooms × 7 days = 3,150 rolls needed for the period.

Which inventory method values the most recently purchased items as the first to be used?

Answer: LIFO (Last In, First Out)

LIFO assumes the last items purchased are the first used, which can affect inventory valuation during periods of price inflation.

What does a 'budget variance report' primarily show a housekeeping executive?

Answer: Differences between budgeted and actual expenditures

A variance report compares planned budget amounts to actual spending, highlighting areas over or under budget.

Which practice BEST reduces linen losses in a hotel's housekeeping department?

Answer: Implementing a controlled linen tracking and accountability system

A formal linen tracking system with documented issuance and return records minimizes losses due to theft, misuse, or misplacement.

An executive housekeeper is preparing next year's operating budget. Which document is MOST useful as a starting reference?

Answer: Current year's actual expenditure and variance reports

Current year actuals and variances provide a data-driven foundation for realistic projections in the next budget cycle.

What is the primary reason for establishing a 'minimum order quantity' (MOQ) for housekeeping supplies?

Answer: To ensure adequate stock levels and qualify for volume pricing

MOQs help maintain sufficient inventory to avoid stockouts and often unlock supplier discounts for bulk purchasing.