CEH Budgeting and Inventory Control 5 — Questions and Answers
Question 1: What is the main purpose of a 'petty cash fund' in a housekeeping department?
- To pay monthly vendor invoices
- To cover small, urgent operational purchases without formal purchase orders (Correct answer)
- To reimburse employees for personal expenses
- To fund capital equipment replacements
Correct answer: To cover small, urgent operational purchases without formal purchase orders
A petty cash fund handles minor, immediate purchases that would be inefficient to process through normal procurement channels.
Question 2: Which document formally authorizes a housekeeping department to spend money up to a specified amount?
- Purchase requisition
- Approved operating budget (Correct answer)
- Vendor invoice
- Receiving report
Correct answer: Approved operating budget
An approved operating budget is the authorizing document that sets spending limits for a department within a fiscal period.
Question 3: A property wants to track whether its housekeeping productivity is improving year over year. Which metric is MOST relevant?
- Total number of housekeeping employees hired
- Average number of rooms cleaned per labor hour (Correct answer)
- Total linen replacement costs
- Number of guest complaints received
Correct answer: Average number of rooms cleaned per labor hour
Rooms cleaned per labor hour is a direct productivity metric that shows efficiency of labor utilization over time.
Question 4: What risk does a hotel face when operating with inventory levels consistently BELOW par stock?
- Excessive storage costs
- Operational disruptions due to stockouts of essential supplies (Correct answer)
- Overpayment to vendors for rush orders only
- Increased product expiration losses
Correct answer: Operational disruptions due to stockouts of essential supplies
Below-par inventory levels risk stockouts that can disrupt room cleaning operations, delay check-ins, and reduce guest satisfaction.
Question 5: When preparing a bid specification for a linen contract, which factor is MOST critical to include for accurate cost comparison?
- The color options available from each supplier
- Thread count, weight, durability specifications, and expected life cycle (Correct answer)
- The distance of the supplier's warehouse from the property
- The number of years the supplier has been in business
Correct answer: Thread count, weight, durability specifications, and expected life cycle
Technical specifications like thread count, weight, and durability determine true value and enable apples-to-apples cost comparisons between bids.
Question 6: Which statement BEST describes the relationship between occupancy rate and housekeeping labor costs?
- Labor costs remain fixed regardless of occupancy
- Higher occupancy increases variable labor costs while fixed supervisory costs remain stable (Correct answer)
- Lower occupancy always reduces total labor costs to zero
- Occupancy rate has no measurable effect on labor budgeting
Correct answer: Higher occupancy increases variable labor costs while fixed supervisory costs remain stable
Room attendant hours are a variable labor cost that rises with occupancy, while supervisory salaries remain as fixed costs regardless of occupancy.
Question 7: An executive housekeeper wants to justify purchasing new commercial washing machines. Which document BEST supports this capital budget request?
- A list of current vendor contacts
- A cost-benefit analysis showing ROI and payback period (Correct answer)
- A record of staff attendance over the past year
- Guest comment cards mentioning linen quality
Correct answer: A cost-benefit analysis showing ROI and payback period
A cost-benefit analysis quantifying savings, productivity gains, and return on investment provides the financial justification required for capital expenditure approval.
CEH Budgeting and Inventory Control 5
What is the main purpose of a 'petty cash fund' in a housekeeping department?