Program & Batch: PGDM Full Time - 2017

Term: Term – 2
Course Name: Operations Management
Name of the
Anirban Ganguly
faculty:
Topic/Title: Analyzing the Quality of Hotel Krishna Sagar’s rooms using Statistical Quality Control

Original or Revised
Original
Write-up:
Group Number: 11
Contact No. and
email of Group 8600877740, pgp17manavlakhina@imt.ac.in
Coordinator:
Sl. Roll No. Name
1 170102025 Amish Gupta

2 170102071 Ishani Ajmera

Group Members: 3 170103200 Sanya Jain

4 170103248 Sumit Kajal

5 170102143 Sritam Samantaray

6 170103112 Manav Lakhina

 INTRODUCTION
We have chosen the hotel Industry for our project. We are looking at the defects in the Krishna Sagar Hotel
in Ghaziabad. We are looking at the defects in the system for 7 days and are plotting them in the form of
control charts.

ABOUT THE HOSPITALITY INDUSTRY

Hospitality Industry is one of the biggest industries. Most of the industries are composed only of a handful
of businesses but hospitality industry is prevalent among almost all companies where customer satisfaction
and meeting leisurely needs is the focus. This industry is very broad but there are some defining aspects
related to it. There are 1,10,000 rooms that are supplied by the hotels in India. As per the tourism ministry,
the number of tourists that visited India last year was 4.4 million and at the present trend the demand will
be raised to 10 million in 2010 – to accommodate 350 million domestic travellers. There is a shortage of
150,000 rooms in India, leading to increased hotel room rates pan India. With this huge opportunity, India
is a destination where the hotel industry is looking for growth. According to world travel and tourism
council, India ranks 18th in top travel destinations and will jump to top 5 in this decade. According to the
estimate by the sources the demand for hotels is going to exceed the supply by almost 100% over the next
two years. It has been found that the 5 star hotels in metro cities allocate the same room to different
guests more than once in the same day and charge for 24 hours against the 6-8 hour usage. Because of the
demand-supply disparity it is believed that over the next two years, 'Hotel India' room rates will rise 25%
annually and occupancy will rise by 80%. Indian Hotel Industry recently has emerged out as a cost-effective
destination.

Recently there is an addition of about 60,000 quality rooms in Indian Hotel Industry in different stages of
planning and development. An upsurge is witnessed in and forging Joint Ventures by MNC Hotel Industry
giants to earn their share of pie in the race. A approval of nearly 300 hotel projects has been given by the
Government, nearly half of which are in the luxury range. According to the Sources an increase from 7
million in 2002 to 15 million in 2015 in the manpower requirements of the hotel industry could be
anticipated.

Software services sector, currently estimated at USD 23 billion, is pushing the Indian economy skywards,
which has lead to the movement of IT professionals towards the cities. Indian hotel industry is expected to
grow at a CAGR of 15%. This figure increased manifolds in 2010, when Delhi hosted the Commonwealth
Games. More than 50 international budget hotel chains are moving into India to set us their business here.
Therefore, the future of Indian Hotel Industry looks bright.

DEFINING ASPECTS
This industry focuses majorly on satisfaction of the customer. While this maybe true of nearly all the
businesses, this industry relies almost totally on the customers’ being happy, the reason being this industry
depends upon providing luxury services.

Reliance on disposable income and leisure time are other factors on which this industry depends. This is
reason why most of these hotels are for providing services to tourists or the rich patrons. In case the
disposable income decreases because of a slump or recession, then these are many times the first
businesses to suffer because customers won’t spend the extra money to enjoy their services.
 LEVEL OF SERVICE
Customer satisfaction is the most important factor that defines the hotel business. So, delivering excellent
level of service is their foremost and most important task. The USP for hotels is to deliver a great
experience, if the customers are not satisfied then there is a high probability that they won’t return to that
hotel again. So these companies hire the employees based upon their skills and service delivering
capabilities in order to provide the best of services to the customers.

ABOUT HOTEL INDUSTRY

Hotels today are more than destinations of rest and sleep, they are a part of a traveller’s gateway
experience. Travellers are choosing a hotel that is more of a selling point than the destination itself
because there has been a recent boom in the boutique hotels market, in the spiffed-up budget properties,
and in the novelty accommodations.
The hotel industry in India is in maturity stage marked by intense competition, where an increase in market
share comes at a competitor’s price. Medical tourism in India is on a verge of increase. India ranks two in
medical tourism because of its highly-advanced treatment technologies attracting many patients from
different countries.
It is expected that the share of India in international tourism and the hospitality market is expected to
increase over the long term. New budget and star hotels are being set up in the country. Foreign hotel
industry players are looking forward to have a joint venture or Greenfield investment in India. It is
expected that the Indian hospitality sector will touch a gross business of US$275 billion in the coming 10
years. In the next two years the domestic hospitality sector is expected to see investments of US$11 billion
because of the 40 international hotel brands ready to build their presence in the country in the next few
years.
The high growth in sectors like information technology, telecom, retail and real estate has lead to an
increase in demand for hotels. The credit of growth of the hotel industry can also be given to the growth of
tourism industry. The boost given by the government to the travel and tourism industry has led to the
growth of Hotel Industry.
 CUSTOMER REVIEWS
Hospitality Revies on Different Websites:

Food Reviews on Zomato:

CONTROL CHARTS

The control chart can be described as a graphical representation that is used to examine the way of a
process that changes over a timespan. The data collected are represented in chronological order. A control
chart would always have a centerline that is meant for the average/mean, along with an upper line that
represents the upper control limit (UCL) and also a lower line to show the lower control limit (LCL). These
lines can be determined by using some historical data. The chart is a chart or a graph that has limit lines,
that are called the control lines. There are three kinds of control lines, which are: the upper control
limit (UCL), also the central line, along with the lower control limit (LCL).
Statistical Quality Control means the usage of statistical methods to monitor and maintain the quality of
any products and services. A method, referred to as an acceptance sampling, may be used in a situation in
which a decision is required to be made in order to accept or reject a group of items or parts based
on quality the is found in a sample.
The use of control charts :
A run chart can provide a clear picture of history behind the performance of a process. Control charts can
place additional information into a run chart – information that is aimed at aiding us in the decision of how
to react to it right now, in response to most recent acquired information regarding the process that is
shown in the charts. They can tell us about the things that we should do, and about the things that we
ought to refrain from doing.
1. The temptation to tamper
2. Looking locally for causes
3. Common-cause versus special-cause variation
4. Reducing common-cause variation
5. Control chart construction – the basic idea

Groups of Data Control Charts:

1. The X Chart:
An x-chart can be used to understand the changes in the mean value of X-measurements as time
passes by. Since the measured characteristics of a process could not be Normally distributed, we
can make use of the Central Limit’s effect by working on sample means instead of some individual
X-values in order to work with quantities that possess a distribution that is more close to Normal.
Usually data are collected in 10 subgroups of size three to six (typically five) measurements or
recordings along with the average of each of subgroup is calculated. In case we are taking the
sample from a distribution with a mean of µ and a standard deviation that is σ, the sample means
obtained from the subgroups of n number of observations change according to a distribution with
the mean and standard deviation that are given by:

also, almost all of the subgroup means lie within 3-sigma limits: (3-sigma limits for subgroup
averages) µ ± 3 σ . If we know the real values of µ and σ, we could use µ + 3σ also as the upper
control limit (UCL), and µ − 3σ also as the lower control limit (LCL).
2. The R–chart:
An X chart mainly focuses the attention on the consistency of the mean level (µ) and also is not any good at
finding out the changes in the variability (σ). An R-chart (or a range chart) is a specifically designed chart for
detecting the changes in variability. This time we will plot the subgroup ranges, i.e. R, instead of the
 subgroup means.
In case µR and σR are respectively the average and the standard deviation of the range R of n number of
observations that are sampled from a Normal Distribution, then it could be shown that σR is of the form of
σR = dµ for some constant called d. The wanted upper control limit (UCL) for the subgroup ranges = µ + 3σ.
Now, also, µ + 3σ = µ(1 + 3d) which is of the form of D4µ.

3. The P-chart:
They can monitor the behavior pattern of a sample proportion of some defective items over a period of
time. We would select some subgroups of n number of items and then compute the sample proportion of
the defectives for each subgroup. Limits of µ ± 3σ for p are this: p ± 3(p(1−p)/n)^(1/2) . In case that the
process is in control, then the p value, the unknown real probability that an item is produced is defective, is
also the same for all the items regardless of what the subgroups they come from.

4. The C-chart:
In statistical quality control, the c-chart is a type of control chart used to check "count"-type data,
total number of non-conformities per unit. It is also occasionally used to check the total number of
events occurring per unit of time. The c-chart differs from the p-chart as it accounts for the
probability of more than one nonconformity per inspection unit, and that (not like the p-chart and
the u-chart) it needs a fixed sample size. The p-chart models "pass"/"fail"-type inspection only,
while the c-chart (and u-chart) give the ability to differentiate between (say) 2 items which fail
inspection because of one fault each and the same two items failing inspection with 5 faults each;
in the first case, the p-chart will show two non-conformant items, while the c-chart will show 10
faults.
Findings:

1. In a run chart for a process there is a graph in which the data are plotted in the order in which
they were acquired in a chronological order, and the consecutive points are joined together by
lines.

2. Control charts are useful for

• conveying a past record of the behavior of a process;
• allowing us to examine a process for stability;
• detecting changes from a previously stable pattern of variation;
• signaling the need for the adjustment of a process;
• helping in detecting special causes of variation.

3. If the distribution of X does not change over time , a process is said to be in control (with respect
to some measured characteristic X of the product).

4. There are two types of reasons that produce the variation seen in a run chart:
• common (chance) causes. These are generally small and are due to the many random
elements that make up a process.
• special (assignable) causes. These are also more systematic changes in the pattern for which
the true cause is often found when their presence is signaled by a control chart.

5. Control charts for subgroups of data.

• x–chart: this chart plots successive subgroup averages in order to monitor the behavior of the
mean level of X.
• R–chart: plots successive subgroup ranges to monitor the behavior of the variability of X.
• p–chart b : plots successive subgroup proportions to monitor the behavior of the proportion of
items produced which are “defective”
 6. Individuals chart. These are used when data from the process is produced too gradually for
grouping to be feasible

7. The upper and lower specification limits (USL and LSL) are externally imposed, for example by the
customer, and are not a reflection of the behavior of the process. Also they are applicable to
individual units, and not to averages.

8. The 4 tests we shall use for determining when a process is out of control are as follows:
(i) One or more points are outside of the the control limits.
(ii) Nine points in a row are above or are below the center line.
(iii) Six points in a row are steadily increasing or are decreasing.
(iv) 14 points in a row alternating up and down (not necessarily crossing the center line).

OUR STUDY
We collected our data from Hotel Krishna Sagar. It belongs to the company Krishna Sagar Hospitality Services Pvt.
Ltd.

Address: C-48, R.D.C. Raj Nagar, Ghaziabad U.P. (India)

The hotel consists of 34 rooms in total. We took a sample of 4 different rooms over a 7 day period and counted all
the defected in the room. We not only checked for normal housekeeping service defects like clean sheets, dust,
room supplies, room literature, or towels, but also for defects like an inoperative or missing TV remote, poor TV
reception or quality, or inoperative geyser, or tap, etc. defective lamps, a malfunctioning clock, tears or stains in the
bedcovers or curtains, or a malfunctioning curtain pull. Etc.
Over the 7 days, we collected the following data (4 rooms per sample):

Sample Number of defects

Number
1 15
2 20
3 11
4 18
5 9
6 14
7 17
TOTAL 104

Using the above data, we calculated the following for a 99% confidence (Z=3.00)

C bar= Total Number of defects/ Number of samples=104/7 = 14.86

UCL= {(C bar)+Z*(sqrt(C bar)}=26.42

LCL={(C bar)-Z*(sqrt(C bar)}= 3.29
Using the data above, we plotted with the following Control C-Chart:

30

24
Number of Defects

18
Number of defects

C Bar

UCL
12 LCL

0
1 2 3 4 5 6 7
Sample Number
 OUR OBSERVATIONS
Since all the observation are in between the control limits, so we can deduce that the hotel’s maintenance is working
properly. The number of defects are still a matter of concern as Hotel Krishna Sagar is situated in RDC which is one of
the most crowded area of Ghaziabad, the errors needs to be minimized as we previously saw the negative impact of
the same in one of the above comments.