Revenue Management Final Exam
Correct Questions And Answers
What is the industry term used to describe the sum of prices paid by a business's
customers? Correct Answers Total Revenues
Historically, what concept have hospitality managers chiefly used to calculate their
selling prices? Correct Answers Costs
What is an algebraic equivalent of the formula: Sales = Costs + Profit? Correct Answers
Profit = Sales - Costs
What is the name for the net value achieved by both parties in a business transaction?
Correct Answers Profit
What element is not present in a barter economy? Correct Answers Money
What is the formula used to calculate an owner's ROI? Correct Answers Owner's
Investment Return / Owner's Original Investment = Owner's Return on Investment
Sandy has 100 hotel rooms to sell. This Saturday night has enough customers to sell
125 rooms so she will be refusing 25 requests for rooms. What is this an example of?
Correct Answers Constrained Supply
Which industry was the first to use Yield Management principles? Correct Answers
Airline
What is the industry term used to describe the selling of rooms which are not actually
available for sale? Correct Answers Overbooking
What is the formula used to calculate Average Daily Rate? Correct Answers Total
Room's Revenue / Total Rooms Sold = Average Daily Rate
Tashia's hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250
rooms. What was Tashia's occupancy % last night? Correct Answers 70%
Tashia's hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250
rooms. What was Tashia's RevPAR last night? Correct Answers $140.00
What is the industry term for the average revenue generated by each occupied
guestroom during a defined period of time? Correct Answers RevPOR
,What is the formula used to calculate GOPPAR? Correct Answers (Total Revenue -
Management Controllable Expenses) / Rooms Available to Sell = GOPPAR
What is the industry term for a customer group which can be readily identified by one or
more common characteristics? Correct Answers Market Segment
What is rack rate? Correct Answers The price of rooms when no discounts of any type
are offered
What is:
Total period revenue
(Number of available seats) x (hours of seat availability) Correct Answers The formula
for RevPASH
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?
Correct Answers 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? Correct Answers The target market
What is the term used to describe efforts undertaken to encourage travel and tourism to
a specific geographic area or attraction? Correct Answers Destination Marketing
What is the name for the value given up by a buyer and a seller in a business
transaction? Correct Answers Price
Charging guests for watching a "Pay-Per-View" movie in their hotel guestroom is an
example of what type of pricing? Correct Answers Two-tiered pricing
What is the fundamental assumption upon which the concept of consumer rationality is
based? Correct Answers Buyers act in ways that are of personal benefit to them
What is the revenue management term used to describe the perceived benefit gained,
minus the price paid, in a business transaction? Correct Answers Value
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? Correct Answers A value
proposition
Which one of the following terms is not one of the 4 Ps of the Marketing Mix? Correct
Answers Proposition
Which of the following terms would be included in the Place portion of a hotel's
marketing mix? Correct Answers Distribution Channels
, What is the fundamental assumption upon which the Law of Supply is based? Correct
Answers The higher the demand for a product the more of it will be produced by sellers
According to Alfred Marshall's work, if the price of a product is lower than the natural, or
equilibrium price, what will happen? Correct Answers The demand fort he product would
exceed its supply
Assume an equilibrium price (P1) is in place for a product. What would the law of supply
and demand predict as an outcome if demand for that product increased? Correct
Answers The new price (P2) would be lower than the previous price (P1) because
supply would decrease
What concept is displayed by the intersecting point on a supply and demand curve?
Correct Answers An estimate of the amount of a product that would be purchased at a
known price and point in time
What must be true if a product producer is to continue creating and selling products?
Correct Answers Revenues must exceed costs
What is the specialized branch of accounting that focuses on recording and analyzing
the expenses incurred by an organization? Correct Answers Cost Accounting
What is the industry term for the point at which an organization's revenues exactly equal
its costs? Correct Answers Break-even point
Which of the following foodservice costs is a variable cost? Correct Answers Food
Which of the following lodging costs is a fixed cost? Correct Answers Mortgage
payments
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? Correct Answers
Because fixed costs are incurred even if no guests are served or rooms are sold
Which of the following statements about unit costs in the hospitality industry is true?
Correct Answers Unit costs will vary based upon how high or low an item is priced
Which of the following statements about the relationship between costs and pricing is
true? Correct Answers An appropriate selling price for a product or service must dictate
its allowable costs
If a Revenue Manager implements an organization's strategic pricing plan what
personal characteristic of that Revenue Manager will be most important for ensuring the
plan's success? Correct Answers An understanding of an organization's customers
Correct Questions And Answers
What is the industry term used to describe the sum of prices paid by a business's
customers? Correct Answers Total Revenues
Historically, what concept have hospitality managers chiefly used to calculate their
selling prices? Correct Answers Costs
What is an algebraic equivalent of the formula: Sales = Costs + Profit? Correct Answers
Profit = Sales - Costs
What is the name for the net value achieved by both parties in a business transaction?
Correct Answers Profit
What element is not present in a barter economy? Correct Answers Money
What is the formula used to calculate an owner's ROI? Correct Answers Owner's
Investment Return / Owner's Original Investment = Owner's Return on Investment
Sandy has 100 hotel rooms to sell. This Saturday night has enough customers to sell
125 rooms so she will be refusing 25 requests for rooms. What is this an example of?
Correct Answers Constrained Supply
Which industry was the first to use Yield Management principles? Correct Answers
Airline
What is the industry term used to describe the selling of rooms which are not actually
available for sale? Correct Answers Overbooking
What is the formula used to calculate Average Daily Rate? Correct Answers Total
Room's Revenue / Total Rooms Sold = Average Daily Rate
Tashia's hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250
rooms. What was Tashia's occupancy % last night? Correct Answers 70%
Tashia's hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250
rooms. What was Tashia's RevPAR last night? Correct Answers $140.00
What is the industry term for the average revenue generated by each occupied
guestroom during a defined period of time? Correct Answers RevPOR
,What is the formula used to calculate GOPPAR? Correct Answers (Total Revenue -
Management Controllable Expenses) / Rooms Available to Sell = GOPPAR
What is the industry term for a customer group which can be readily identified by one or
more common characteristics? Correct Answers Market Segment
What is rack rate? Correct Answers The price of rooms when no discounts of any type
are offered
What is:
Total period revenue
(Number of available seats) x (hours of seat availability) Correct Answers The formula
for RevPASH
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?
Correct Answers 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? Correct Answers The target market
What is the term used to describe efforts undertaken to encourage travel and tourism to
a specific geographic area or attraction? Correct Answers Destination Marketing
What is the name for the value given up by a buyer and a seller in a business
transaction? Correct Answers Price
Charging guests for watching a "Pay-Per-View" movie in their hotel guestroom is an
example of what type of pricing? Correct Answers Two-tiered pricing
What is the fundamental assumption upon which the concept of consumer rationality is
based? Correct Answers Buyers act in ways that are of personal benefit to them
What is the revenue management term used to describe the perceived benefit gained,
minus the price paid, in a business transaction? Correct Answers Value
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? Correct Answers A value
proposition
Which one of the following terms is not one of the 4 Ps of the Marketing Mix? Correct
Answers Proposition
Which of the following terms would be included in the Place portion of a hotel's
marketing mix? Correct Answers Distribution Channels
, What is the fundamental assumption upon which the Law of Supply is based? Correct
Answers The higher the demand for a product the more of it will be produced by sellers
According to Alfred Marshall's work, if the price of a product is lower than the natural, or
equilibrium price, what will happen? Correct Answers The demand fort he product would
exceed its supply
Assume an equilibrium price (P1) is in place for a product. What would the law of supply
and demand predict as an outcome if demand for that product increased? Correct
Answers The new price (P2) would be lower than the previous price (P1) because
supply would decrease
What concept is displayed by the intersecting point on a supply and demand curve?
Correct Answers An estimate of the amount of a product that would be purchased at a
known price and point in time
What must be true if a product producer is to continue creating and selling products?
Correct Answers Revenues must exceed costs
What is the specialized branch of accounting that focuses on recording and analyzing
the expenses incurred by an organization? Correct Answers Cost Accounting
What is the industry term for the point at which an organization's revenues exactly equal
its costs? Correct Answers Break-even point
Which of the following foodservice costs is a variable cost? Correct Answers Food
Which of the following lodging costs is a fixed cost? Correct Answers Mortgage
payments
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? Correct Answers
Because fixed costs are incurred even if no guests are served or rooms are sold
Which of the following statements about unit costs in the hospitality industry is true?
Correct Answers Unit costs will vary based upon how high or low an item is priced
Which of the following statements about the relationship between costs and pricing is
true? Correct Answers An appropriate selling price for a product or service must dictate
its allowable costs
If a Revenue Manager implements an organization's strategic pricing plan what
personal characteristic of that Revenue Manager will be most important for ensuring the
plan's success? Correct Answers An understanding of an organization's customers
