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Revenue Management Final Exam: Questions & Answers (Correct & Verified)
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Revenue Management Final Exam: Questions &Answers (Correct & Verified)
Revenue Right Ans - The total amount of sales achieved in a specified time
period
Revenue is calculate as: Right Ans - Number of Units Sold x Unit Price
Effective managers of an organization's revenues MUST do three things
Right Ans - 1. Understand the importance of revenue management
2. Understand the many complex factors that influence revenue management
strategy and tactics
3. Become better at making revenue management decisions than their
competitors
Proft Formula Right Ans - Revenue - Expenses
Profit Right Ans - the net value achieved by a seller AND a buyer in a
business transaction
ROI (Return on Investment) Right Ans - Owner's Investment
Return/Owner's original investment
Revenue Manager Right Ans - The individual or team responsible for
ensuring that a company's prices match a customer's willingness to pay. These
techniques are always customer-needs driven, not company-needs driven
Customer-centric revenue management Right Ans - A revenue
management philosophy that places customer gain ahead of short-term
revenue maximization in revenue management decision making
What is price? Right Ans - Price is the value placed by a firm its products
and services
OR
The amount of money charged for a good or service
,Two-tiered Price Right Ans - A pricing strategy in which the buyer must
pay a price for the ability to make additional purchases
Value Right Ans - In a buyer or seller transaction, the amount of perceived
benefit gained minus the price paid
Value Proposition Right Ans - A statement describing the goo or service to
be received and the price to be paid for it
Buyer Assessment Right Ans - A value less than 0, do not buy
A value Equal to 0, do not buy in most cases
A value greater than 0, buy
Marketing Right Ans - The process of providing a seller's value proposition
to a market
The 4 P's Right Ans - 1. Product: The product or service delivered to the
buyer
2. Promotion: The means of communication between buyer and seller
3. Place: The location or means of delivering the product or service to be sold
4. Price: What is given up in an exchange for the product or service
Supply (of law) Right Ans - The higher the demand of a product, the more
of it will be produced by sellers
Demand (law of) Right Ans - The higher the price of a product, the less of it
will be wanted by buyers
How to measure demand for hospitality products Right Ans - Desire,
Ability to Pay, Willingness to Pay
Break-Even Point Right Ans - The point at which a firm's revenues exactly
equal to its expenses
Variable (cost) Right Ans - An expense that generally increases as sales
volume increases and decreases as sales volume decreases
, Fixed (cost) Right Ans - An expense that remains constant despite
increases or decreases in volume. In the hospitality industry, examples
include the costs of illuminating exterior signage, overhead music and liquor
liability premiums.
Cost-based pricing Right Ans - a pricing philosophy that involves summing
product (or service) costs incurred, with desired profit, to arrive at an item's
selling price
Cost-based Pricing Formula Right Ans - Expenses + Desired profit = selling
price
Strategic pricing Right Ans - the application of data and insight to
effectively match prices charged with buyer's perceptions of value
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? Right 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? Right Ans - The
target market
Understanding the barter system is critical because it helps us understand the
concept of Right 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 Right Ans - customer
Revenue refers to the total amount of sales achieved in a specified time
period. Therefore, the formula is Number of units sold X Right Ans - Unit
Price
What is the fundamental assumption upon which the concept of consumer
rationality is based? Right Ans - Buyers act in ways that are of personal
benefit to them
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