Operations management Lab Report Example | Topics and Well Written Essays - 2500 words

Operations management - Lab Report Example According to Jones and Lockwood (2001), the industry is a complex assembly of customer processing, information processing, and material processing that leads to process choice of hybrid types inclusive of job shops, batch production, mass customization, and mass production all within the same operation (Jones, Lockwood, 2001), Additionally, the specific content of the industry does not always allow process layout to closely match process type, and the theory of Operations Management becomes difficult to apply (Jones and Lockwood, 2001). It is in this context the operations of Budget Hotels and its Luxury counterpart will be compared, and the results will there lacked the level of accuracy, and absoluteness prevalent in operations like the auto industry and other manufacturing entities. According to Dejong (2010), the difference between Budget Hotels and a Luxury Hotels, is that budget hotels tend to derive more value from operations given the leaner cost structures that are based on lower capital investments, land cost, and the staff to hotel room ratio. They are therefore able to achieve higher operating returns, which facilitate higher contributions to the hotel bottom lines (Dejong, H. 2010). Luxury Hotels on the other hand, according to Dejong (2010), are considered less risky then Budget Hotels in terms of development prospects, in that the entry barriers to new entrants are very high in this segment of the market. Studies have shown that Luxury Hotels are normally established in urban or resort areas, where they are characterized by the low number of available sites for development, compared to Budget Hotels which are found principally along highways, in close proximity to airports, and in suburban areas (Dejong, H. 2010). The strategy in locating these hotels in theses different areas separates and characterize the customers will be attracted to them, and the financial status and satisfaction desire levels of customers will play a critical role in decidi ng who chooses a luxury hotel as against the budget hotel. Economic conditions of the market, is also a key factor on the development choices of investors, and where the loan value ratios are decreasing compare to earlier periods like 2010 versus 2008, lower capital will be required to build budget hotels instead of luxury, and it is in this direction many business entrepreneurs will resort to achieve financial success and stability (Dejong, H. 2010). The hotel Investment climate criteria is one major reason why investors are turning to Budget Hotels in South America, Central America, Asia, especially in Brazil, India, China, and Dubai, instead of Luxury Hotels according to Dejong (2010). The criteria have an investment component and a market related component. Investors look at the investment horizon, the medium objectives, and risk tolerance before looking at the market related aspect which include the maturity of the destination markets being targeted, the supply and demand and t he state of the credit market before deciding whether the cost and returns from luxury and or budget hotels are attractive enough to warrant the investment of their capital (Dejong, 2010). According to Dejong (2010), substantial saving opportunities are available for companies that incorporate budget properties into their managed hotel programs over luxury hotels, and other upscale properties.