Using cost of quality in managing constraints: A case study in a hotel company

In today's business world, customer orientation is one of the most important factors the success of a company. Customer orientation requires being able to meet customers' needs and expectations by offering quality goods and services. Customers whose needs and expectations are met by the company will be satisfied and this will increase customer loyalty to the company. Customer loyalty is one of the most important elements for the companies' profitability. Profitable companies can survive and become established. Theory of constraints has emerged as a management philosophy that emphasizes that a companies' main goal is making money and there are always at least one or more constraints that prevent companies from the realization of this goal. Theory of constraints is a method that focuses on continuous improvements in finding and managing these constraints. Past to the present theories of constraints have been successfully applied to many industrial businesses. But in recent years it has become a preferred method in service companies as well as in industrial enterprises. In this context, our study has attempted to identify the constraints encountered in service companies using the thinking process tools of theory of constraints. Additionally, the effect of these constraints on the service quality and the profitability are determined by the PAF model of cost of quality. In this context, a descriptive and explanatory case study was conducted at a hotel. Primarily, the company's current situation is put forward and the constraints are determined by the case study. Then, we attempted to determine the changes in the profitability of the company with managing constraints using a PAF model.