CEH Budgeting & Inventory Control 3 — Questions and Answers
Question 1: An executive housekeeper wants to reduce linen replacement costs. Which strategy BEST addresses this goal without reducing service quality?
- Purchase cheaper single-use linens
- Implement a strict loss and damage tracking system (Correct answer)
- Increase the number of linen sets per room
- Reduce the frequency of linen changes for all guests
Correct answer: Implement a strict loss and damage tracking system
Tracking loss and damage identifies waste sources and accountability gaps, directly reducing unnecessary replacement costs.
Question 2: What is the purpose of a physical inventory count in housekeeping?
- To determine which staff members are most productive
- To reconcile actual stock levels against recorded quantities and identify discrepancies (Correct answer)
- To set next quarter's purchasing budget automatically
- To calculate the daily cost per occupied room
Correct answer: To reconcile actual stock levels against recorded quantities and identify discrepancies
Physical inventory counts verify that actual quantities match records, revealing shrinkage, miscounts, or recording errors.
Question 3: A housekeeping budget includes a line item for 'capital expenditures.' Which of the following BEST fits this category?
- Monthly cleaning chemical purchases
- Replacement of all vacuum cleaners fleet-wide (Correct answer)
- Overtime pay during a convention week
- Guest amenity restocking
Correct answer: Replacement of all vacuum cleaners fleet-wide
Capital expenditures are major purchases of equipment or assets with long useful lives, such as replacing an entire fleet of vacuums.
Question 4: Which formula correctly calculates the inventory turnover rate for housekeeping supplies?
- Ending inventory ÷ total purchases
- Cost of supplies used ÷ average inventory value (Correct answer)
- Total purchases ÷ beginning inventory
- Average inventory ÷ total rooms cleaned
Correct answer: Cost of supplies used ÷ average inventory value
Inventory turnover = cost of supplies used ÷ average inventory value, indicating how quickly stock is consumed and replaced.
Question 5: During budget preparation, an executive housekeeper should reference historical occupancy data primarily to:
- Determine the number of full-time employees to permanently add
- Forecast variable supply and labor costs based on expected demand (Correct answer)
- Set a fixed linen replacement budget regardless of season
- Justify eliminating the safety stock buffer
Correct answer: Forecast variable supply and labor costs based on expected demand
Historical occupancy data allows accurate forecasting of variable costs like supplies and staffing that fluctuate with guest volume.
Question 6: What is the primary risk of maintaining inventory levels that are too LOW in a housekeeping operation?
- Excessive carrying costs and storage fees
- Stockouts that disrupt service and guest satisfaction (Correct answer)
- Over-ordering and expiration of perishable supplies
- Increased shrinkage and pilferage rates
Correct answer: Stockouts that disrupt service and guest satisfaction
Insufficient inventory levels lead to stockouts, which can halt operations and directly harm guest satisfaction and service delivery.
Question 7: A purchasing variance report shows that actual spending on amenities was $2,400 versus a budget of $2,000 for the month. What is the percentage variance?
- 16.7% unfavorable
- 20% unfavorable (Correct answer)
- 16.7% favorable
- 20% favorable
Correct answer: 20% unfavorable
Variance % = (actual − budget) ÷ budget × 100 = ($2,400 − $2,000) ÷ $2,000 × 100 = 20% unfavorable.
CEH Budgeting & Inventory Control 3
An executive housekeeper wants to reduce linen replacement costs.
Which strategy BEST addresses this goal without reducing service quality?