A Cost-based Material Management Model for a Sustainable Hotel Supply Chain

Abstract

Effective material management is a key aspect of supply chain sustainability due to its significant economic, environmental, and social impacts. Major costs are typically associated with the procurement, transportation, storage, and processing of materials. Environmental concerns include emissions, wastes, and the consumption of precious resources such as energy and water. However, less attention is paid to material management in services supply chains compared to that of manufacturing firms. This paper aims to develop a cost-based optimization model for sustainable material management in a hotel supply chain. The model combines the key costs of materials within the supply chain including those associated with green decisions and environmental impacts. The pilot model is developed based on empirical data collected from a small sample of 4 and 5-stars hotels in the UAE. The model can be expanded and utilized by hotels and service companies in general as a platform to reduce the total cost of material management and to support sustainability practices across the supply chain. This is particularly important for hospitality sector which is under a growing pressure from stakeholders and regulators to increase its operational and cost-effectiveness while maintaining high environmental, safety, and quality standards.