Revenue Management BBA4 Exam Questions
With Insightful Rejoinders 2025\2026 A+
Grade
revenue management
- accurate answers-art & science of predicting real time customer demand at
the micro level & optimizing the price & availability of products
7 core concepts of RM
- accurate answers-1. focus on price rather than costs when balancing supply
& demand
2. replace cost-based pricing with market-based pricing
3. sell to micro markets not mass markets
4. save products to most valuable customers
5. decisions based on knowledge not supposition
6. exploit product´s value cycle
7. continually re-evaluate revenue opportunities
Revenue manager
- accurate answers-individual/team responsible for ensuring a company's
prices match a customer's willingness to pay
- always customer-needs driven not company-needs driven
revenue management process
- accurate answers-1. establish prices
2. forecast demand
3. manage inventory
4. manage distribution: who to sell to?
5. Evaluate results
6. Establish prices
Types of forecast
- accurate answers-1. forecast demand
2. occupancy forecast
3. total revenue forecast
dimensions of service
- accurate answers--time
,- price
reduce arrival uncertainty
- accurate answers-internal control: forecast of no-shows, cancellations,
overbooking
external control: deposits in advance, prepayments, cancellation penalties,
non-refundable, reminders
reduce duration uncertainty
- accurate answers-internal control: forecast time of stay, service and process
redesign
external controls: change of penalties, restrictions, length of stay control(max,
min stay)
reduce time between customers
- accurate answers-process re-design
communication
information technology
Classical RM
- accurate answers-- operational internally oriented
- searching optimal results for company
- generate max revenue
- tactical approach
- product value
Customer centric RM
- accurate answers-- customer oriented
- optimal outcome for customers
- generate loyal customers
- strategic approach
- customer value
- reach past customer in a personalized way to optimize response
- places customers gain ahead short-term revenue maximization
- focused on needs, wants and desires of organizations customers
- continuous assessment of product attributes, perceptions by listening to
customers actions
, KPI
- accurate answers-set of quantifiable measures that a company uses to assess
its performance over time
- determines company's progress in achieving strategic goals and compare
company´s performance against others to implement benchmarking strategies
ADR: average daily rate
- accurate answers-Total Rooms Revenue /
Number of rooms sold
Occupancy %
- accurate answers-(Total Occupied rooms /
Number of available rooms)*100
RevPar: Revenue per available room
- accurate answers-- Total rooms revenue / number of available rooms
- ADR*%occupancy
TrevPar
- accurate answers-Total revenue/ number of available rooms
ArPar
- accurate answers-(ADR- variable cost per occ. room + additional revenue per
occupied room)*occupancy
-> clear reflection of bottom line profit
GOPPAR
- accurate answers-gross operating profit per available room -> earnings
before interest and taxes
= revenue - expenses / number of available rooms
-> takes into account all operating/departmental costs not only variable cost
Revenue growth
- accurate answers-(recent revenue - previous revenue) / previous revenue =
(revenue current year/ revenue last year)-1
Competitive set KPI´s
- accurate answers-to compare competitors:
- targeting the same clientele
With Insightful Rejoinders 2025\2026 A+
Grade
revenue management
- accurate answers-art & science of predicting real time customer demand at
the micro level & optimizing the price & availability of products
7 core concepts of RM
- accurate answers-1. focus on price rather than costs when balancing supply
& demand
2. replace cost-based pricing with market-based pricing
3. sell to micro markets not mass markets
4. save products to most valuable customers
5. decisions based on knowledge not supposition
6. exploit product´s value cycle
7. continually re-evaluate revenue opportunities
Revenue manager
- accurate answers-individual/team responsible for ensuring a company's
prices match a customer's willingness to pay
- always customer-needs driven not company-needs driven
revenue management process
- accurate answers-1. establish prices
2. forecast demand
3. manage inventory
4. manage distribution: who to sell to?
5. Evaluate results
6. Establish prices
Types of forecast
- accurate answers-1. forecast demand
2. occupancy forecast
3. total revenue forecast
dimensions of service
- accurate answers--time
,- price
reduce arrival uncertainty
- accurate answers-internal control: forecast of no-shows, cancellations,
overbooking
external control: deposits in advance, prepayments, cancellation penalties,
non-refundable, reminders
reduce duration uncertainty
- accurate answers-internal control: forecast time of stay, service and process
redesign
external controls: change of penalties, restrictions, length of stay control(max,
min stay)
reduce time between customers
- accurate answers-process re-design
communication
information technology
Classical RM
- accurate answers-- operational internally oriented
- searching optimal results for company
- generate max revenue
- tactical approach
- product value
Customer centric RM
- accurate answers-- customer oriented
- optimal outcome for customers
- generate loyal customers
- strategic approach
- customer value
- reach past customer in a personalized way to optimize response
- places customers gain ahead short-term revenue maximization
- focused on needs, wants and desires of organizations customers
- continuous assessment of product attributes, perceptions by listening to
customers actions
, KPI
- accurate answers-set of quantifiable measures that a company uses to assess
its performance over time
- determines company's progress in achieving strategic goals and compare
company´s performance against others to implement benchmarking strategies
ADR: average daily rate
- accurate answers-Total Rooms Revenue /
Number of rooms sold
Occupancy %
- accurate answers-(Total Occupied rooms /
Number of available rooms)*100
RevPar: Revenue per available room
- accurate answers-- Total rooms revenue / number of available rooms
- ADR*%occupancy
TrevPar
- accurate answers-Total revenue/ number of available rooms
ArPar
- accurate answers-(ADR- variable cost per occ. room + additional revenue per
occupied room)*occupancy
-> clear reflection of bottom line profit
GOPPAR
- accurate answers-gross operating profit per available room -> earnings
before interest and taxes
= revenue - expenses / number of available rooms
-> takes into account all operating/departmental costs not only variable cost
Revenue growth
- accurate answers-(recent revenue - previous revenue) / previous revenue =
(revenue current year/ revenue last year)-1
Competitive set KPI´s
- accurate answers-to compare competitors:
- targeting the same clientele
