Statistical forecasting as a method of management and control of inventory: a case for guest soap at Block lodges A subsidiary of Block hotels management limited.

Abstract

Guest Soap is a twenty grammes soap tablet supplied to overnight guests in all Block Lodges and Hotels. It is one of the seven hundred items purchased and supplied to Block Lodges and Hotels by the Central Stores of Block Lodges. Guest Soap is purchased from East African Industries in cartons of 144 specially labeled guest soap tablets. Due to continuously increasing cost of capital, -Block Lodges Management have made various studies in an attempt to reduce inventory management costs, through improved management and control systems. Currently, inventories are managed and controlled through a periodic-review-system. In this project, the author uses Economic Ordering Quantity Model and Statistical Forecasting Techniques in an attempt to reduce inventory management costs, at the same time improving management and control systems. -This system has resulted to a 331% reduction in inventory management cost. Besides the cost reduction, it provides a more efficient and reliable system of inventory management and control at the Block Lodges Central Stores.