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Revenue management Latest Exam Questions with 100% Correct Answers
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Revenue management Latest Exam Questions with 100% Correct Answers
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Revenue management Latest ExamQuestions with 100% Correct Answers
expected monetary value - ✅✅probability * impact
internal. external factors affecting overbooking - ✅✅(I)Database accuracy: (E) season
of year,day, week
-no shows Room demand and available
-cancellations capacity
-early departures weather, city events
-delayed departures
Human errors
2 costs of overbooking - ✅✅1-Cost of walking guest:is the cost of having booked too
many rooms(when the hotel needs to accommodate on or more guests at another hotel)
2- cost of an empty room: is the profit that could have been made if the room was occupied
Cost of an empty room - ✅✅contribution to fixed cost
likehood that a guest could have come back
cost of walking guest - ✅✅-cost of re-accomodation
-compensation cost
-loss of customer goodwill
reducing arrival uncertainty - ✅✅internal approaches(within organization):
-no shows forecasting
,-overbooking policy
External approaches(towards customers)
-deposits--cc,nonrefund
-penalties
What are overbooking approaches and types of cost requirements? -
✅✅1-Critical fractial(booking ratio)-marginal cost analysis
2-Net results- minimising the cost of overbooking
Requirements:
-relative frequency of no shows
-the cost of empty room
-cost of walking guest
optimising rate mix - ✅✅the level of available capacity increases, the marginal
revenue expected from each additional room declines
nested reservation system - ✅✅NPL-min allocation, protection level
NPL is the minimum room capacity that a hotel wants to protect for a given class and its higher
classes rather then just for a given class.
EMRR curve - ✅✅as level of available capacity increases, the marginal expected revenue
from each additional unit of capacity declines
point of indifference - ✅✅we have a rate of 100 for special customers, and our discount rate is
70: we will continue to reserve units for our special customer util the probability of selling one
more unit will drop until 70%--> this means that the amount we sold is protection level for this
category
we reserve units for category until we reach point of indifference of another category
, industry characteristic of restaurant revenue management applicaiton - ✅✅-relatively fixed
cost
-predictable demand
-perishable inventory
-appropriate cost and pricing structure
-time variable demand
non traditional rm - ✅✅service capacity is relatively
fixed duration of service use is variable
physical cosntraint: constricted but elastic(restaurant), non constricted but elastic(theme parks)
Theme park:
1-Perishable Inventory
2-Cost Structure
3-demand
4-segmented market-
5-capacity limits
6-reservation made in advance - ✅✅1-Inventory is perishable
2-Low cost of marginal sales in comparison to marginal
revenues High fixed cost
3-Variation in demand is significant
Demand is somewhat predictable 4-Market is
cable of being segmented Differences in price
elasticity by market segment 5- Capacity is
relatively flexible
Theme parks have excess capacity during low-demand seasons and excess demand at high-
demand seasons or on weekends
6- Small percentage of or no reservations are made in advance
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