Download Revenue Management Final Complete Practice Test and more Exams Nursing in PDF only on Docsity! revenue management final complete practice test 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? - >>>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? - >>>the target market Understanding the barter system is critical because it helps us understand the concept of - >>>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. - >>>customer Revenue refers to the total amount of sales achieved in a specified time period. Therefore, the formula isNumber of units sold X - >>>unit price What is the fundamental assumption upon which the concept of consumer rationality is based? - >>>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? - >>>A value proposition What concept is displayed by the intersecting point on a supply and demand curve? - >>>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? - >>>An appropriate selling price for a product or service must dictate its allowable costs The minimum sales point is equivalent to - >>>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? - >>>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? - >>>Perceived value will increase If quantity and price are held constant how will reductions in product or service quality affect buyers' perceptions of value? - >>>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? - >>>Business traveler on a corporate account In the consumer's mind, value for the product is equivalent to - >>>perceived benefit minus the price What is the formula revenue managers use to calculate Net ADR Yield? - >>>Net Room Rate/Standard ADR = Net ADR Yield What is an explanation of "consumer surplus"? - >>>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? - >>>price fence RevPOR differs from RevPAR because it considers - >>>occupied rooms only Charging guests for watching a "Pay-Per-View" movie in their hotel guestroom is an example of what type of pricing? - >>>Two-tiered pricing 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? - >>>Because fixed costs are incurred even if no guests are served or rooms are sold Which of the following statements about "true" unit costs in the hospitality industry is true? - >>>Unit costs will vary based upon how high or low an item is priced What pricing philosophy uses the formula below to establish prices?Expenses + desired profit = selling price - >>>cost-based pricing The RM's use of data and insight to set prices in the hospitality industry is referred to as - >>>strategic pricing Which of the following is not an example of two-tiered pricing? - >>>Car buying and gasoline purchases What type of benefit is lacking in material qualities and is not able to be touched or seen but nonetheless can still be perceived? - >>>Intangible Which of the Four I's of service addresses the fact that a hotel room that goes unsold on a specific night cannot be discounted and offered for sale the next day? - >>>inventory Randall is the revenue manager for a franchisee who owns a five unit quick service restaurant company. Which feature would be the easiest for Randall to change if he sought to increase the value his company provides its customers? - >>>The quality of service offered Consider the formula: (A + B) - C = D Where: A = Perceived tangible product benefit B = Perceived intangible service benefit C = Price D = Value If all other variables are held constant, which statement is also true? - >>>As C decreases, D increases Which two factors do successful revenue managers employ when they devise and implement strategic pricing plans? - >>>Data management and insight If the service increases and price decreases, value for the customer - >>>increases What is value-based pricing? - >>>A pricing system based upon a buyer's view of product or service value What is the term used to describe a pricing system in which all customers are charged the same price at all times? - >>>fixed pricing What is the relationship between differential pricing and consumer surplus? - >>>Differential pricing is a strategy used by sellers to minimize consumer surplus What is the purpose of a price fence or barrier? - >>>To identify who is and who is not eligible for a special pricing offer Which differential pricing strategy would in most cases be illegal or unethical if implemented? - >>>Pricing based on the ethnicity of the buyer Which of the following factors is likely to impact a differential pricing strategy? - >>>Customer characteristics (age, affiliation, loyalty, etc.) Product purchased (quantity, distribution channel, product version, etc.) Payment terms Which of the following is a good differential pricing tool that a RM may use to avoid arbitrage and cannibalization? - >>>price fence What is the net ADR yield (not the net room rate) given the following information:ADR = $250 Distribution channel costs = $50 - >>>80% What two factors establish a restaurant's weekly customer capacity? - >>>Number of seats and number of hours open per week What is the name for the laws and regulations aimed at preventing abusive business behavior or anti- competitive practices? - >>>Anti-trust legislation Which US law would be violated if a hotel charged different room rates based upon a room buyer's race, religion or ethnic background? - >>>Civil Rights Act What is true about the way buyers generally view variance in a seller's prices? - >>>Discounts are viewed more favorably then surcharges According to the most recent Hospitality Sales & Marketing Association International (HSMAI) survey, to whom do the largest percentage of hotel revenue managers report? - >>>Their hotel's general manager What vehicle do effective revenue managers use to best develop and evaluate their organizations' pricing and revenue management strategies and tactics? - >>>Regular strategy meetings What is the formula revenue managers use to calculate the percentage change in sales which has occurred from the last accounting period to the present period? - >>>Total Sales This Period - Total Sales Last Period /Total Sales Last Period = % Change in Sales What is the primary reason for forecasting future room demand? - >>>To make pricing-related decisions When might a revenue manager at a lodging facility be pressured to establish a long-term forecast that is unrealistically low? - >>>When a significant financial incentive exists for exceeding the forecast What is the most likely result of a revenue manager's decision to reduce regular room rates during periods of reduced demand? - >>>Competitor's rates will also be reduced Ray sold 140 rooms on Monday at an ADR of $ 160.00. He sold 100 rooms on Tuesday at an ADR of $ 190.00. What was his ADR for the combined days of Monday and Tuesday? - >>>$172.50 In revenue management, which of the following is irrelevant to demand forecasting - >>>Changes in accounting methods Group business is an important indicator for immediate revenue strategies because - >>>it allows the RM to plan ahead for transient strategies to fill any needs For revenue managers working in the lodging industry the term "Place" in the 4P's of the Marketing Mix refers to two items. One is the physical location of the hotel. What is the second? - >>>The property's distribution channels What is the industry term used to describe all of a hotel's unique or distinct forms of guestroom products available for sale? - >>>rooms inventory What would be the effect of an upon-arrival inventory management training program that resulted in a hotel significantly up selling a large percentage of its arriving guest? - >>>ADR and RevPAR would increase and occupancy % would be unchanged Tanika is the revenue manager at the Holiday House hotel. Southeast Airlines has requested that Tanika quote them a rate for the use of 20 rooms per night for a period of one year. If Southeast airlines accepts Tanika's quote for both price and availability, what type of room rate will the hotel and airline have agreed upon? - >>>Contract rate What is true about a revenue manager's rooms demand forecast? - >>>It is based on customer demand at an established price In which situation would a customer-centric revenue manager likely implement a special event rate? - >>>During a local festival that would fill all of the area hotels Hanna is the revenue manager at the Waterford hotel. For the first week in July next year she has determined her hotel will accept reservations for guests seeking to arrive on July 1st. July 2nd. or July 3rd; but not on July 4th. Which of the following revenue management control (restriction) strategies is she using? - >>>CTA Which of the following is NOT a strategy typically used by revenue managers to optimize revenue during periods of high demand? - >>>Implement rack rate discounts to maximize occupancy To optimize revenues while enhancing property operations, which strategy pair should revenue managers seek to implement? - >>>Maximization of room codes, minimization of rate codes Lani is the revenue manager at the Aloha Inn. In which situation would Lani optimize the Inn's gross rooms revenues? - >>>High Standard ADR, high Net ADR Yield Harold tracks his hotel guest check outs and the number of new reservations made at check out. Last week a total of 640 guests checked out of his hotel. In that same period, his front desk staff booked reservations for 32 future rooms nights from this group of check out guests. What is true at Harold's hotel? - >>>The reservation nights booked per check out for last week was .05 Which is most often true about room sales made by a hotel's group sales department? - >>>ADRs are lower than average and Net ADR Yield is higher than average How are most CVBs in the United States funded? - >>>By a combination of hotel occupancy taxes and membership dues Into which hotel industry distribution channel component would a brand's call center worker enter room reservations he or she has made? - >>>CRS What is the net ADR yield given the following information:ADR = $180 Distribution channel costs = $40 - >>>77.8% Which of the following has a higher Net ADR Yield? Standard ADR = 200; Distribution Cost = 20 Standard ADR = 210; Distribution Cost = 30 - >>>Standard ADR of 200 and cost of 20 Mr. Smith booked his stay through expedia.com. He is now checking out and decides to book a future stay with the front-desk agent who is taking care of the check-out. What is true about the future room reservation? - >>>No IDS fees will be paid on the revenue the new reservation will generate At Rachel's hotel the CPOR is $40.00. Her Net ADR Yield averages 85% and her franchise fees average 5%. What is Rachel's average minimum ADR sales point? - >>>$50.00 Last month Carl's hotel ran a 55% occupancy. His comp. set had 50,000 room nights available for sale and sold 25,000 rooms. What was Carl's occupancy index last month? - >>>110%