revenue management final
What is the term used to identify a management philosophy that places customer gain
ahead of short-term revenue maximization in revenue management decision making? -
ANS- customer-centric revenue management
What is the term used to describe the potential customers to whom a business's
marketing activities and messages are directed? - ANS- the target market
Understanding the barter system is critical because it helps us understand the concept
of - ANS- value without money
A company that focuses solely on generation of its profits is likely to go out of business
in today's marketplace. This is because successful organizations know that both the
company and the __________________ must profit in order to maintain a successful
and profitable business. - ANS- customer
Revenue refers to the total amount of sales achieved in a specified time period.
Therefore, the formula isNumber of units sold X - ANS- unit price
What is the fundamental assumption upon which the concept of consumer rationality is
based? - ANS- Buyers act in ways that are of personal benefit to them
What is created when a seller communicates to a buyer a description of a product to be
sold and the price at which that product will be sold? - ANS- A value proposition
What concept is displayed by the intersecting point on a supply and demand curve? -
ANS- An estimate of the amount of a product that would be purchased at a known price
and point in time
Which of the following statements about the relationship between costs and pricing is
true? - ANS- An appropriate selling price for a product or service must dictate its
allowable costs
The minimum sales point is equivalent to - ANS- the dollar sales volume at the
break-even point (revenue - cost = 0)
, What special challenge do buyers of hospitality products such as hotel guestrooms or
restaurant meals face? - ANS- Difficulty in quality evaluation prior to purchase
If quantity and quality are held constant how will a reduction in price affect buyers'
perceptions of value? - ANS- Perceived value will increase
If quantity and price are held constant how will reductions in product or service quality
affect buyers' perceptions of value? - ANS- Perceived value will decrease
Which individual would be most likely to spend the most money on incidentals (at the
per person level) in a hotel? - ANS- Business traveler on a corporate account
In the consumer's mind, value for the product is equivalent to - ANS- perceived benefit
minus the price
What is the formula revenue managers use to calculate Net ADR Yield? - ANS- Net
Room Rate/Standard ADR = Net ADR Yield
What is an explanation of "consumer surplus"? - ANS- When customers' willingness to
pay is lower than the price they paid
What is the name for the specific requirements that describe how and who is eligible for
a special pricing offer? - ANS- price fence
If a RM identifies that a certain segment of customers is willing to pay a higher price for
a product, but that RM does not have an effective way for those customers to identify
themselves, the RM is likely to encounter which unfortunate effect of poorly managed
differential pricing? - ANS- cannibalization
Which statement about revenue management in the hospitality industry is true? - ANS-
It is best understood by experienced hospitality managers
Lisa is the revenue manager of a 500 room hotel property. Next week-end demand for
her rooms will exceed the number of rooms she has available for sale. Which high
demand pricing strategy will optimize revenue for her property? - ANS- Implement a
differential pricing strategy and allocate the limited supply tothose market segments who
value the rooms most highly
What is the term used to identify a management philosophy that places customer gain
ahead of short-term revenue maximization in revenue management decision making? -
ANS- customer-centric revenue management
What is the term used to describe the potential customers to whom a business's
marketing activities and messages are directed? - ANS- the target market
Understanding the barter system is critical because it helps us understand the concept
of - ANS- value without money
A company that focuses solely on generation of its profits is likely to go out of business
in today's marketplace. This is because successful organizations know that both the
company and the __________________ must profit in order to maintain a successful
and profitable business. - ANS- customer
Revenue refers to the total amount of sales achieved in a specified time period.
Therefore, the formula isNumber of units sold X - ANS- unit price
What is the fundamental assumption upon which the concept of consumer rationality is
based? - ANS- Buyers act in ways that are of personal benefit to them
What is created when a seller communicates to a buyer a description of a product to be
sold and the price at which that product will be sold? - ANS- A value proposition
What concept is displayed by the intersecting point on a supply and demand curve? -
ANS- An estimate of the amount of a product that would be purchased at a known price
and point in time
Which of the following statements about the relationship between costs and pricing is
true? - ANS- An appropriate selling price for a product or service must dictate its
allowable costs
The minimum sales point is equivalent to - ANS- the dollar sales volume at the
break-even point (revenue - cost = 0)
, What special challenge do buyers of hospitality products such as hotel guestrooms or
restaurant meals face? - ANS- Difficulty in quality evaluation prior to purchase
If quantity and quality are held constant how will a reduction in price affect buyers'
perceptions of value? - ANS- Perceived value will increase
If quantity and price are held constant how will reductions in product or service quality
affect buyers' perceptions of value? - ANS- Perceived value will decrease
Which individual would be most likely to spend the most money on incidentals (at the
per person level) in a hotel? - ANS- Business traveler on a corporate account
In the consumer's mind, value for the product is equivalent to - ANS- perceived benefit
minus the price
What is the formula revenue managers use to calculate Net ADR Yield? - ANS- Net
Room Rate/Standard ADR = Net ADR Yield
What is an explanation of "consumer surplus"? - ANS- When customers' willingness to
pay is lower than the price they paid
What is the name for the specific requirements that describe how and who is eligible for
a special pricing offer? - ANS- price fence
If a RM identifies that a certain segment of customers is willing to pay a higher price for
a product, but that RM does not have an effective way for those customers to identify
themselves, the RM is likely to encounter which unfortunate effect of poorly managed
differential pricing? - ANS- cannibalization
Which statement about revenue management in the hospitality industry is true? - ANS-
It is best understood by experienced hospitality managers
Lisa is the revenue manager of a 500 room hotel property. Next week-end demand for
her rooms will exceed the number of rooms she has available for sale. Which high
demand pricing strategy will optimize revenue for her property? - ANS- Implement a
differential pricing strategy and allocate the limited supply tothose market segments who
value the rooms most highly
