Revenue Management Strategies and Techniques, Exams of Business Economics

Download Revenue Management Strategies and Techniques and more Exams Business Economics in PDF only on Docsity! HM 441 Final Exam 55 Questions with Answers 2023 Positives of Revenue Management Strategies & Tactics - CORRECT ANSWER - Serve more guests - Increase market share - increase revenues & profitability - NOT to motivate employees What is the hurdle rate? - CORRECT ANSWER The lowest rate for a given day (T/F) A benefit of variable pricing within RM is the smoothing of demand - CORRECT ANSWER True Revenue Management can be defined as... - CORRECT ANSWER A set of strategies and techniques used to sell the right product, to the right customer, at the right time and at the right prices. Revenue management is a set of revenue maximization strategies and tactics that: - CORRECT ANSWER can be used to improve the profitability of certain businesses. When the American Airlines CEO developed yield management, what type of information was crucial to its success? - CORRECT ANSWER Forecasting (T/F) Revenue management is new, as are all of the strategies that are employed to maximize profit. - CORRECT ANSWER False What is the main reason that travelers today have more clout than ever before? - CORRECT ANSWER They have information on virtually everything at their fingertips. KPIs to unlock full potential of RM - CORRECT ANSWER - Varied but predictable demand - Fixed-capacity environment - A perishable primary product (T/F) Revenue Management is a computer system and is price discounting - CORRECT ANSWER False The goal of revenue management is to MAXIMIZE REVENUE per Available Time- Based Inventory Unit (or RevPATI). RevPATI formula applied to all industries translates into...? - CORRECT ANSWER Capacity Utilization x Average Revenue per Service Transaction Revenue Management is NOT necessarily about... - CORRECT ANSWER Achieving 100 % occupancy and a perfect science Revenue Management includes a multidisciplinary management techniques applied to several sub-sectors of the hospitality. What are they and which one is not? - CORRECT ANSWER - Operations Management - Financial Management - Marketing Management - NOT Logistics Management To interpret measures of a hotel's performance, managers often compare those measures with: - CORRECT ANSWER - The budget for the period - Historical figures from comparable earlier periods at the hotel - Industry or sector averages A short-term forecast will identify demand generators with names and numbers. By contrast, a long-term forecast will be based both on current key economic indicators and on _______________ - CORRECT ANSWER Historical data A _____________ contains a breakdown of all revenue and expenses reasonably planned and expected for a particular period and is not likely to change unless unforeseen events force a revision. - CORRECT ANSWER Budget The DeLong Hotel has three different rate categories of rooms. Forecasts show midweek low-demand dates for the higher-priced executive floor rooms. Using principles of capacity management, the reservations manager should: - CORRECT The Horntooth Ranch Hotel is run by a management company that operates several mid-range properties under many different corporate flags. What type of management Contract Company is it? - CORRECT ANSWER Second-tier What is a successful positioning strategy based on? - CORRECT ANSWER A set of competitive advantages If a restaurant had an overall average RevPASH of $14 and an overall seat occupancy of 66%, its average check would be: - CORRECT ANSWER $21.21 The bottleneck activity of a service delivery system has the: - CORRECT ANSWER Lowest throughput rate Much of the data required to perform an RRM analysis can be obtained through: - CORRECT ANSWER - Observation - Manual collection - POS The throughput rates for the three major processes that make up a service delivery system are provided below. Take Order Assemble Order Deliver Order 1.2 1.9 2.1 Throughput rate (customers/min) Which of the activities is the bottleneck and why? - CORRECT ANSWER Taking the order, because its throughput rate is lowest. Which are and are NOT a condition necessary for the successful application of RM to a service business: - CORRECT ANSWER - Time variable demand - Perishable inventory - Relatively fixed capacity - Segmentable markets - NOT Low fixed and high variable costs Throughput time measures: - CORRECT ANSWER The time a customer spends in the system from enter to exit Restaurant Revenue Management primarily focuses on front-of-house operations. However, other aspects of running a restaurant are also tied to RRM. These are: - CORRECT ANSWER - Marketing - Customer Service - BOH - Staffing Time-variable demand means: - CORRECT ANSWER Different market segments use a service at different times Seat Occupancy % - CORRECT ANSWER Total Nr. of Seats Used ÷ Total Nr. of Seats Available x 100 Table Occupancy % - CORRECT ANSWER (Total Nr. of Tables Used ÷ Total Nr. of Tables Available) x 100 If a 210-seat restaurant is open 360 days a year for 8 hours a day and has total annual revenue of $6,000,000. Its RevPASH is: - CORRECT ANSWER $9.92 (T/F) Revenue managers must be willing to take on a leadership role in helping build strong teams committed to achieving revenue goals - CORRECT ANSWER False What type of revenue management systems execute all of the rate and capacity allocation controls necessary to achieve revenue management goals? - CORRECT ANSWER Decision support systems At what stage of the evolution of the revenue manager position were certification programs and specialized training introduced? - CORRECT ANSWER Intermediate When the Director of Revenue Management (DORM) reports directly to the Hotel's general manager it's not only the most common case but it's what Forgacs call? - CORRECT ANSWER Evolutionary Stage (T/F) Since two customers booking the same type of room may be paying different rates based on the time of their booking, the customer may feel they are getting a "fair price". - CORRECT ANSWER True The Revenue Team (or committee) should include & NOT include which members? - CORRECT ANSWER - Director of Sales/Marketing - Catering/F&B Directors - GM - Front Desk/Reservation Managers - NOT Engineering Director Reference price should answer the following question: - CORRECT ANSWER The price perceived by consumers to be the normal price for a product or a service? From an ethics perspective, a well designed service recovery program is the correct strategy to reduce conflicts in case of _________ - CORRECT ANSWER Overbooking Some hotels are known to make check calls to ascertain the availability of backup rooms at nearby properties and they adjust the aggressiveness of their overbooking accordingly. In essence, these hotels are only thinking __________ - CORRECT ANSWER Short term What's the best (simple) definition of Ethics? - CORRECT ANSWER It is about moral standards of right and wrong conduct toward others