REVENUE MANAGEMENT FINAL EXAM, PRACTICE
EXAM AND STUDY GUIDE LATEST 2024 ACTUAL EXAM
500 QUESTIONS AND CORRECT DETAILED ANSWERS
WITH RATIONALES (VERIFIED ANSWERS) |ALREADY
GRADED A+
What is the industry term used to describe the sum of prices paid by a business's
customers? - ANSWER: Total Revenues
Historically, what concept have hospitality managers chiefly used to calculate their
selling prices? - ANSWER: Costs
What is an algebraic equivalent of the formula: Sales = Costs + Profit? - ANSWER:
Profit = Sales - Costs
What is the name for the net value achieved by both parties in a business
transaction? - ANSWER: Profit
What element is not present in a barter economy? - ANSWER: Money
What is the formula used to calculate an owner's ROI? - ANSWER: Owner's
Investment Return / Owner's Original Investment = Owner's Return on Investment
Sandy has 100 hotel rooms to sell. This Saturday night has enough customers to sell
125 rooms so she will be refusing 25 requests for rooms. What is this an example of?
- ANSWER: Constrained Supply
Which industry was the first to use Yield Management principles? - ANSWER: Airline
What is the industry term used to describe the selling of rooms which are not
actually available for sale? - ANSWER: Overbooking
What is the formula used to calculate Average Daily Rate? - ANSWER: Total Room's
Revenue / Total Rooms Sold = Average Daily Rate
Tashia's hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250
rooms. What was Tashia's occupancy % last night? - ANSWER: 70%
Tashia's hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250
rooms. What was Tashia's RevPAR last night? - ANSWER: $140.00
What is the industry term for the average revenue generated by each occupied
guestroom during a defined period of time? - ANSWER: RevPOR
,What is the formula used to calculate GOPPAR? - ANSWER: (Total Revenue -
Management Controllable Expenses) / Rooms Available to Sell = GOPPAR
What is the industry term for a customer group which can be readily identified by
one or more common characteristics? - ANSWER: Market Segment
What is rack rate? - ANSWER: The price of rooms when no discounts of any type are
offered
What is:
Total period revenue
(Number of available seats) x (hours of seat availability) - ANSWER: The formula for
RevPASH
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? - ANSWER: 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? - ANSWER: The target market
What is the term used to describe efforts undertaken to encourage travel and
tourism to a specific geographic area or attraction? - ANSWER: Destination
Marketing
What is the name for the value given up by a buyer and a seller in a business
transaction? - ANSWER: Price
Charging guests for watching a "Pay-Per-View" movie in their hotel guestroom is an
example of what type of pricing? - ANSWER: Two-tiered pricing
What is the fundamental assumption upon which the concept of consumer
rationality is based? - ANSWER: Buyers act in ways that are of personal benefit to
them
What is the revenue management term used to describe the perceived benefit
gained, minus the price paid, in a business transaction? - ANSWER: Value
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? - ANSWER: A value
proposition
Which one of the following terms is not one of the 4 Ps of the Marketing Mix? -
ANSWER: Proposition
Which of the following terms would be included in the Place portion of a hotel's
marketing mix? - ANSWER: Distribution Channels
, What is the fundamental assumption upon which the Law of Supply is based? -
ANSWER: The higher the demand for a product the more of it will be produced by
sellers
According to Alfred Marshall's work, if the price of a product is lower than the
natural, or equilibrium price, what will happen? - ANSWER: The demand fort he
product would exceed its supply
Assume an equilibrium price (P1) is in place for a product. What would the law of
supply and demand predict as an outcome if demand for that product increased? -
ANSWER: The new price (P2) would be lower than the previous price (P1) because
supply would decrease
What concept is displayed by the intersecting point on a supply and demand curve? -
ANSWER: An estimate of the amount of a product that would be purchased at a
known price and point in time
What must be true if a product producer is to continue creating and selling
products? - ANSWER: Revenues must exceed costs
What is the specialized branch of accounting that focuses on recording and analyzing
the expenses incurred by an organization? - ANSWER: Cost Accounting
What is the industry term for the point at which an organization's revenues exactly
equal its costs? - ANSWER: Break-even point
Which of the following foodservice costs is a variable cost? - ANSWER: Food
Which of the following lodging costs is a fixed cost? - ANSWER: Mortgage payments
In a hospitality industry break-even analysis graph the Total Revenues line starts at 0.
Why does the Total Costs line always start farther up the y axis? - ANSWER: Because
fixed costs are incurred even if no guests are served or rooms are sold
Which of the following statements about unit costs in the hospitality industry is
true? - ANSWER: Unit costs will vary based upon how high or low an item is priced
Which of the following statements about the relationship between costs and pricing
is true? - ANSWER: An appropriate selling price for a product or service must dictate
its allowable costs
If a Revenue Manager implements an organization's strategic pricing plan what
personal characteristic of that Revenue Manager will be most important for ensuring
the plan's success? - ANSWER: An understanding of an organization's customers
EXAM AND STUDY GUIDE LATEST 2024 ACTUAL EXAM
500 QUESTIONS AND CORRECT DETAILED ANSWERS
WITH RATIONALES (VERIFIED ANSWERS) |ALREADY
GRADED A+
What is the industry term used to describe the sum of prices paid by a business's
customers? - ANSWER: Total Revenues
Historically, what concept have hospitality managers chiefly used to calculate their
selling prices? - ANSWER: Costs
What is an algebraic equivalent of the formula: Sales = Costs + Profit? - ANSWER:
Profit = Sales - Costs
What is the name for the net value achieved by both parties in a business
transaction? - ANSWER: Profit
What element is not present in a barter economy? - ANSWER: Money
What is the formula used to calculate an owner's ROI? - ANSWER: Owner's
Investment Return / Owner's Original Investment = Owner's Return on Investment
Sandy has 100 hotel rooms to sell. This Saturday night has enough customers to sell
125 rooms so she will be refusing 25 requests for rooms. What is this an example of?
- ANSWER: Constrained Supply
Which industry was the first to use Yield Management principles? - ANSWER: Airline
What is the industry term used to describe the selling of rooms which are not
actually available for sale? - ANSWER: Overbooking
What is the formula used to calculate Average Daily Rate? - ANSWER: Total Room's
Revenue / Total Rooms Sold = Average Daily Rate
Tashia's hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250
rooms. What was Tashia's occupancy % last night? - ANSWER: 70%
Tashia's hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250
rooms. What was Tashia's RevPAR last night? - ANSWER: $140.00
What is the industry term for the average revenue generated by each occupied
guestroom during a defined period of time? - ANSWER: RevPOR
,What is the formula used to calculate GOPPAR? - ANSWER: (Total Revenue -
Management Controllable Expenses) / Rooms Available to Sell = GOPPAR
What is the industry term for a customer group which can be readily identified by
one or more common characteristics? - ANSWER: Market Segment
What is rack rate? - ANSWER: The price of rooms when no discounts of any type are
offered
What is:
Total period revenue
(Number of available seats) x (hours of seat availability) - ANSWER: The formula for
RevPASH
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? - ANSWER: 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? - ANSWER: The target market
What is the term used to describe efforts undertaken to encourage travel and
tourism to a specific geographic area or attraction? - ANSWER: Destination
Marketing
What is the name for the value given up by a buyer and a seller in a business
transaction? - ANSWER: Price
Charging guests for watching a "Pay-Per-View" movie in their hotel guestroom is an
example of what type of pricing? - ANSWER: Two-tiered pricing
What is the fundamental assumption upon which the concept of consumer
rationality is based? - ANSWER: Buyers act in ways that are of personal benefit to
them
What is the revenue management term used to describe the perceived benefit
gained, minus the price paid, in a business transaction? - ANSWER: Value
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? - ANSWER: A value
proposition
Which one of the following terms is not one of the 4 Ps of the Marketing Mix? -
ANSWER: Proposition
Which of the following terms would be included in the Place portion of a hotel's
marketing mix? - ANSWER: Distribution Channels
, What is the fundamental assumption upon which the Law of Supply is based? -
ANSWER: The higher the demand for a product the more of it will be produced by
sellers
According to Alfred Marshall's work, if the price of a product is lower than the
natural, or equilibrium price, what will happen? - ANSWER: The demand fort he
product would exceed its supply
Assume an equilibrium price (P1) is in place for a product. What would the law of
supply and demand predict as an outcome if demand for that product increased? -
ANSWER: The new price (P2) would be lower than the previous price (P1) because
supply would decrease
What concept is displayed by the intersecting point on a supply and demand curve? -
ANSWER: An estimate of the amount of a product that would be purchased at a
known price and point in time
What must be true if a product producer is to continue creating and selling
products? - ANSWER: Revenues must exceed costs
What is the specialized branch of accounting that focuses on recording and analyzing
the expenses incurred by an organization? - ANSWER: Cost Accounting
What is the industry term for the point at which an organization's revenues exactly
equal its costs? - ANSWER: Break-even point
Which of the following foodservice costs is a variable cost? - ANSWER: Food
Which of the following lodging costs is a fixed cost? - ANSWER: Mortgage payments
In a hospitality industry break-even analysis graph the Total Revenues line starts at 0.
Why does the Total Costs line always start farther up the y axis? - ANSWER: Because
fixed costs are incurred even if no guests are served or rooms are sold
Which of the following statements about unit costs in the hospitality industry is
true? - ANSWER: Unit costs will vary based upon how high or low an item is priced
Which of the following statements about the relationship between costs and pricing
is true? - ANSWER: An appropriate selling price for a product or service must dictate
its allowable costs
If a Revenue Manager implements an organization's strategic pricing plan what
personal characteristic of that Revenue Manager will be most important for ensuring
the plan's success? - ANSWER: An understanding of an organization's customers
