Service Purchasing at the Sunny Hotel

Service Purchasing at the Sunny Hotel

By

Jasmine Khuranna

An assignment submitted in partial fulfillment of the requirement for MGMT 608

School of Business Management

National University

Professor Renee Weeks

August 9, 2014

Background

Sunny Hotel/Spa and Wellness Resort founded in 1995 in Izmir, Turkey grew 200% in a five year period. According to the owners of the hotel, Mr. and Mrs. Gunes, the hotels success has been credited to their focus in providing management services. Recently Mr. and Mrs. Gunes have considered outsourcing critical services, which has been embraced by the hotel upon the arrival of the new purchasing manager, Mr. Murat Var.

Previously the purchasing department only focused on supply of goods. Few outsourced services were being purchased and managed by the department directly receiving these services. Var consolidated the purchasing and of goods and services so that both the goods and services could be centralized and be solely the function of the purchasing department. By doing so, the hotel improved its customer services and decreased its total cost of purchasing by 30%. However, these benefits also have had negative implications in the functional departments. According to the departmental managers, personnel in the purchasing department do not engage other department heads in the service selection process which has recently lead to wrong or bad service selections.

What makes the procurement of services different from that of the purchase of goods and materials?

The term purchasing can be defined as, the function responsible for obtaining by purchase, lease or other legal means, equipment, materials, components, suppliers and services required by an undertaking for use in production or resale (Lysons, 2000). Procurement is a broad term in comparison with purchasing which implies the acquisition of goods or services in return for a monetary or equivalent payment. Procurement is strictly, a more accurate term, and...