Revenue Management Final Exam Questions with Correct and Verified Answers

Revenue Management Final Exam Questions with Correct and Verified Answers Revenue - Correct answer The total amount of sales achieved in a specified time period" "Revenue is calculate as: - Correct answer Number of Units Sold x Unit Price" "Effective managers of an organization's revenues MUST do three things - Correct answer 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 - Correct answer Revenue - Expenses" "Profit - Correct answer the net value achieved by a seller AND a buyer in a business transaction" "ROI (Return on Investment) - Correct answer Owner's Investment Return/Owner's original investment" "Revenue Manager - Correct answer 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 - Correct answer A revenue management philosophy that places customer gain ahead of short-term revenue maximization in revenue management decision making" "What is price? - Correct answer 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 - Correct answer A pricing strategy in which the buyer must pay a price for the ability to make additional purchases" "Value - Correct answer In a buyer or seller transaction, the amount of perceived benefit gained minus the price paid" "Value Proposition - Correct answer A statement describing the goo or service to be received and the price to be paid for it" "Buyer Assessment - Correct answer 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 - Correct answer The process of providing a seller's value proposition to a market" "The 4 P's - Correct answer 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) - Correct answer The higher the demand of a product, the more of it will be produced by sellers" "Demand (law of) - Correct answer The higher the price of a product, the less of it will be wanted by buyers" "How to measure demand for hospitality products - Correct answer Desire, Ability to Pay, Willingness to Pay" "Break-Even Point - Correct answer The point at which a firm's revenues exactly equal to its expenses" "Variable (cost) - Correct answer An expense that generally increases as sales volume increases and decreases as sales volume decreases" "Fixed (cost) - Correct answer 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 - Correct answer 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 - Correct answer Expenses + Desired profit = selling price" "Strategic pricing - Correct answer 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? - Correct answer 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 answer The target market" "Understanding the barter system is critical because it helps us understand the concept of - Correct answer 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 - Correct answer customer" "Revenue refers to the total amount of sales achieved in a specified time period. Therefore, the formula is Number of units sold X - Correct answer Unit Price" "What is the fundamental assumption upon which the concept of consumer rationality is based? - Correct answer Buyers act in ways that are of personal benefit to them" "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 answer A value proposition" "What concept is displayed by the intersecting point on a supply and demand curve? - Correct answer An estimate of the amount of a product that would be purchased at a known price and point in time" "Which of the following statements about the relationship between costs and pricing is true? - Correct answer An appropriate selling price for a product or service must dictate its allowable costs" "The minimum sales point is equivalent to - Correct answer the dollar sales volume at the break-even point (revenue - cost = 0)" "Intangible (benefit) - Correct answer Lacking material qualities, not able to be touched or seen, but nonetheless perceived" "quality - Correct answer the degree of excellence of something as measured against other similar things" "Service - Correct answer intangible activities or benefits provided to buyers either alone or in conjunction with the purchase of a product" "If quality is constant and price increases - Correct answer then value decreases" "if quality is constant and price decreases - Correct answer the value increases" "if quality increases and price decreases - Correct answer then value increases" "if quality decreases and price increases - Correct answer then value decreases" "if service is constant and price increases - Correct answer then value decreases" "if service is constant and price decreases - Correct answer then value increases" "if service increases and price decreases - Correct answer then value increases" "if service decreases and price increases - Correct answer then value decreases" "Four I's of Service - Correct answer Intangibility, Inconsistency, Inseparability, Inventory" "Intangibility - Correct answer a service cannot be touched or seen before it is purchased" "Inconsistency - Correct answer Uneven performance results from variations between the skills of those who are actually delivering the service" "Inseparability - Correct answer it is often impossible to make a distinction between the individual delivering the service and the service itself" "Inventory - Correct answer unsold inventory vanishes if not sold and the costs associated with idle production capacity can be high `" "Effective revenue management depends on - Correct answer Science and insight" "Insight - Correct answer the ability to see clearly and intuitively into the nature of a complex person, subject or situation" "What special challenge do buyers of hospitality products such as hotel guest rooms or restaurant meals face? - Correct answer Difficulty in quality evaluation prior to purchase" "If quantity and quality are held constant how will a reduction in price affect buyers' perceptions of value? - Correct answer Perceived value will increase" "If quantity and price are held constant how will reductions in product or service quality affect buyers' perceptions of value? - Correct answer Perceived value will decrease" "Which individual would be most likely to spend the most money on incidentals (at the per person level) in a hotel? - Correct answer Business traveler on a corporate account" "In the consumer's mind, value for the product is equivalent to - Correct answer perceived benefit minus the price" "Value Based Pricing - Correct answer the practice of establishing prices for a firm's products and services based primarily on the buyer's perceived value of those products and services" "Differential Pricing - Correct answer The practice of a seller charging different prices to different buyers for the same product or slightly different versions of the same product" "Inventory management - Correct answer the process of allocating and modifying the number of products available for sale at various prices and through various distribution channels" "Consumer surplus - Correct answer The difference between the amount of a buyer would be willing to pay for a product or service and the amount they are charged" "Limits to differential pricing - Correct answer imperfect knowledge, cannibalization, arbitrage, questions of legality or ethics" "Price Fence - Correct answer the specific requirements that describes who is and is not eligible for a special pricing offer" "Direct channel - Correct answer a system of selling to consumers without the use of an intermediary" "Indirect channel - Correct answer A system of selling to consumers utilizing one or more intermediaries" "intermediary - Correct answer an entity that acts as a communication or service link between buyers and sellers that are unable or unwilling to deal directly" "Net ADR yield - Correct answer The proportion of the standard rate (ADR) for a room sale that is actually realized by a hotel after subtracting the cost of fees and assessments associated with the specific distribution channel responsible for the room's sale" "Price Band - Correct answer the span from lowest to highest price in a range of prices" "Add features - Correct answer this may include increasing quality, quantity, or the service levels provided to customers" "Subtract features - Correct answer doing so may allow the product or service to appeal to new customers while leaving current customers unaffected" "Add a service to a product - Correct answer in some cases, the service may be permitting the customer to save time by avoiding a wait" "Bundling - Correct answer Combining individual products and/or services into groupings that are sold for a single price, usually lower than the sum of the prices charged if the same included items were purchased individually" "Revenue Optimization - Correct answer The application of disciplined tactics that predict buyer response to prices, optimize product availability, and yield the greatest business profits" "What is an explanation of "consumer surplus?" - Correct answer When customers' willingness to pay is higher than the price they paid" "What is the formula revenue managers use to calculate Net ADR Yield? - Correct answer Net Room Rate/Standard ADR" "What is the name for the specific requirements that describe how and who is eligible for a special pricing offer? - Correct answer Price Fence" "If a RM identifies that a certain segment of customers is willing to pay a higher price for a product, but that RM does not have an effective way for those customers to identify themselves, the RM is likely to encounter which unfortunate effect of poorly managed differential pricing? - Correct answer price fixing (?)" "Which statement about revenue management in hospitality industry is true? - Correct answer It is best understood by experienced hospitality managers" "Federal Antitrust Legislation - Correct answer laws and regulations aimed at preventing abusive business behavior or anti-competitive practices, including those related to unfair pricing" "The Sherman Antitrust Act - Correct answer This 1890 Act outlaws all contracts and conspiracies that unreasonably restrain interstate trade. This expressly includes any agreements among competitors to fix prices, rig bids, or allocate customers." "The Federal Trade Commission Act - Correct answer This 1914 Act created the FTC, which was established for the press purpose of enforcing the Sherman Antitrust Act. The FTC can prevent businesses from engaging in certain activities simply by declaring them illegal" "The Clayton Act - Correct answer This 1914 Act mandates that a business must apply its prices fairly--that is, it cannot illegally discriminate in its pricing policies" "The Robinson-Patman Act - Correct answer Also known as the Small Business Protection Act, it prevents sellers from giving discount prices to volume buyers if the volumes require for the discount are so high that only one or two buyers could meet them" "Predatory Pricing - Correct answer The practice of a firm harming consumers by selling its products below costs or at a price developed with the intent of driving competitors out of the market, thus creating monopoly and the ability to raise its own prices significantly in the future" "Price Gouging - Correct answer The increasing of prices, often in response to a natural disaster or emergency, beyond a level deemed reasonable by society" "Ethics - Correct answer Moral standards of right and wrong conduct toward others" "reference price - Correct answer the price perceived by consumers to be the normal for a product or service" "Customer Relations Management (CRM) - Correct answer A term applied to a variety of processes, often computerized, implemented by companies to handle their direct contact with customers." "RMs seeking continuous improvement in their revenue optimization efforts undertake the following steps: - Correct answer Step 1: Establish prices Step 2: Forecast Demand Step 3: Manage Inventory Step 4: Manage Distribution Step 5: Evaluate Results" "Reporting Relationships - Correct answer The director of sales and marketing -> the rooms manager -> the controller -> the property GM -> A corporate level executive" "service industry - Correct answer those businesses that primarily sell their customers intangible goods. also known as the service sector" "Shoulder Period - Correct answer the time period just prior to, or just after, a peak demand period. For example, in a restaurant, the period just before or after lunch is a should period. In a resort, the weeks just before and just after the resort's peak season are shoulder periods" "Probabilistic modeling - Correct answer the application of statistical formulas to past events for the purpose of predicting the likelihood of future events" "Lisa is the revenue manager of a 500 room hotel property. Next week-end demand for her rooms will exceed the number of rooms she has available for sale. Which high-demand pricing strategy will optimize revenue for her property? - Correct answer Implement a differential pricing strategy and allocate the limited supply to those market segments who value the rooms most highly" "What is the name used to describe a consortium of independent organizations formed to limit competition by controlling the production, distribution and pricing of a product or service? - Correct answer Cartel" "What is the name of the US legislation that prohibits competing hospitality managers from meeting to agree upon the room prices that will be charged for upcoming events or charged to specific groups of customers? - Correct answer Sherman Antitrust Act" "What is the name for the price perceived by consumers to be the normal or standard price for a product or a service? - Correct answer Reference price" "Which group of employees is most responsible for implementing the revenue optimization strategies and tactics developed by a revenue management team? - Correct answer Line-level employees" "Demand (customers) - Correct answer the number of potential buyers with the interest and ability to purchase the products sold by a business at the specific price offered" "Accurate forecasts are important for: - Correct answer - Scheduling workers - Purchasing supplies - Managing cash flows" "Types of data in forecasting - Correct answer Historical, Current, and Future Data" "Trailing Period - Correct answer A data collection method characterized by the act of discarding the oldest piece of data in a data set when the newest data are added, thus updating the set's information while keeping the set size constant. Data contained in a trailing period are often used in calculating the rolling average." "Fixed average - Correct answer an average calculated by using historical data generated during a specific and unchanged time period" "Rolling Average - Correct answer an average calculated by using historical data generated during a changing time period" "RMs monitor: - Correct answer - Occupancy and Availability Reports - Group Rooms Pace Reporting - Non-rooms Revenue Pace Reporting" "Minimum Length of Stay (MLOS) - Correct answer A revenue management strategy that instructs reservationists to decline any room reservation request that does not equal or exceed the predetermined minimum number of nights allowed" "Group Rooms Pace Report - Correct answer A summary report describing the amount of future demand for a lodging property's group rooms and the rate(s) at which that group business has been captured. Also referred to as a group rooms booking pace report." "Pick Up - Correct answer the proportion of previously reserved rooms that are ultimately occupied" "Demand generator - Correct answer An entity or event that produces a significant increase in business." "demand drain - Correct answer A circumstance that produces a significant decrease in business." "What is the lodging industry term for a revenue management strategy that instructs reservationists to decline any room reservation request that does not equal or exceed the pre-determined minimum number of nights allowed? - Correct answer MLOS" "What is the most customer-centric strategy for revenue managers to employ if they seek to optimize ADR and RevPAR in periods of temporarily heightened demand? - Correct answer Eliminate discounts" "One of the best ways to make decisions about future performance is to - Correct answer understand historical performance" "A "booking report" or "pace report" tells the revenue manager - Correct answer the rate at which future demand is being captured" "effective demand forecasts rely on historical, current, and future date. What is the fourth component needed for effective demand forecasting? - Correct answer Insight" "Internal Customer - Correct answer a co-worker or another department who receives services produced elsewhere in the company to then create a product or service for the company's external customers" "Brand partner - Correct answer a business entity utilized by a franchisor to achieve the goals of one or more of that franchisor's brands" "Franchise services representative (FSR) - Correct answer A franchisor representative assigned to assist franchisees in the operation of their franchised unit(s)." "Rooms inventory - Correct answer All of the unique forms of guest room products offered for sale by a lodging facility." "Room code - Correct answer A property-specific, shortened description used to identify a specific room product in a hotel" "Guests will perceive higher value based on - Correct answer - location of room - room size or type - bed configuration - package" "transient rooms - Correct answer RMs must ensure that effective upon arrival, up-sell programs are in place at their properties and that the program's effectiveness is measured and assessed on a regular basis" "Pre-arrival Strategies - Correct answer for maximizing room revenues via inventory management consist of clearly communicating to potential buyers the availability of the hotel's various room types and then accurately recording these guests' purchases" "Upsell - Correct answer To increase seller revenues: (1) by selling the buyer a higher cost item than that which was originally intended to be purchased, or (2) by increasing the number of items purchased by the buyer." "Top-down (selling) - Correct answer A selling approach that seeks to sell an entity's highest priced items prior to the sale of its lower priced items." "Bottom-up (selling) - Correct answer A selling approach that seeks to sell an entity's lowest priced items prior to the sale of its higher priced items." "Attrition - Correct answer the difference between the purchases a group pledges to make and the purchases it actually makes. Also referred to as wash, wash down, or slippage." "Contract rate (room) - Correct answer A long-term room rate whose availability is agreed to in advance and for the duration of the contract agreement." "Negotiated rate (room) - Correct answer An agreement to provide a select group of travelers, subject to availability, rooms at and agreed on and discounted rate. The discounted rate is in effect for the term of the negotiated rate agreement." "Walk(ed) - Correct answer to relocate a guest with a confirmed reservation at a hotel to an alternative property" "Price Management - Correct answer The strategies and tactics employed by revenue managers to best match rates or prices charged with prospective customers' willingness to pay." "Rate code - Correct answer A property-specific notation used by a hotel's PMS to specify the price of a unique room product. Also known as a rate plan." "Special event (rate) - Correct answer An above-rack room rate typically implemented during single day or multiday periods of extremely high demand for rooms. Also referred to by some RMs as a premium rate, premium rack rate, or super rack rate." "Stay restrictions - Correct answer Duration rules and limitations related to guests arrival dates, departure dates, and minimum stay lengths." "CTA - Correct answer Short for closed to arrival. A date on which guests are not permitted to begin their hotel stays." "Which of the following is not typically used by revenue managers to designate specific room products sold in their hotels? - Correct answer Price" "What are two synonymous lodging industry terms used to identify the difference between the purchases a group pledges to make and the purchases it actually makes? - Correct answer Attrition and wash" "Hanna is the revenue manager for the Waterford hotel. For a Saturday in the future she has determined her hotel will accept reservation only for those guests seeking to stay for two or more days. Which of the following revenue management control (restriction) strategies is she using? - Correct answer MLOS" "The process of allocating and modifying the number of products available for sale at various prices and through various channels is called - Correct answer inventory management" "What is the correct term for a property specific, shortened description used to identify a specific room product in a hotel? - Correct answer Room code" "Travel wholesaler - Correct answer A large-volume travel industry intermediary who sells to other, smaller-volume travel intermediaries." "Global distribution system (GDS) - Correct answer A group of companies that electronically connect travel-related businesses such as airlines and hotels with those individuals and companies seeking to buy from them" "Internet distribution system (IDS) - Correct answer The group of online reservation systems and travel portals that utilize the Internet to connect travel-related businesses such as hotels with those individuals and companies seeking to buy from them." "Proprietary Web Site - Correct answer A web address whose content is 100% controlled by a hotel's own management team" "Net Rate - Correct answer The amount per room actually received by hotel when selling its rooms through an intermediary." "Merchant Model - Correct answer A system in which an intermediary obtains rooms inventory at a wholesale rate and then acts as a merchant by selling the rooms to buyers at retail rates" "Referral site - Correct answer A web site the searches for and reports information found on other web sites. Also known as a scrapping site or meta search site." "Opaque model - Correct answer A system in which the room buyer does not know the name of the hotel they have chosen until after they have committed to the purchase price of the room." "Consumer-generated media (CGM) - Correct answer Various online venues such as forums, blogs, wikis, and reviewer sites where those seeking to research and buy products can use information and opinions posted by other consumers before making their buying decisions." "What is the industry term for a lower room rate that is offered when a potential rooms buyer exhibits initial price resistance? - Correct answer Fade rate" "For which distribution channel type do hotels typically employ a shopper's service? - Correct answer Sales made via the telephone" "Which statement does not accurately describe a non-electric distribution channel? - Correct answer CRS is a non-electrical distribution channel" "Which of the following rooms marketing strategies would contribute to the commoditization of hotel rooms? - Correct answer Participation on a website that lists only a hotel's name and a single rack room rate" "Which common IDS room sales model is most dependent on selling price for its revenue generation? - Correct answer Opaque Model" "Room Related Occupation Costs - Correct answer Those rooms-related costs incurred directly as a result of selling a guest room" "Minimum ADR sales point formula - Correct answer The lowest room rate that can be charged and still generate enough revenue to pay all rooms-related occupancy costs plus the cost of any distribution channel commissions and franchise-related fees and royalties paid to create the sale. Rooms Related Occupancy Costs/net ADR yield %" "gross operating profit - Correct answer total revenues less management-controllable operating expenses. GOP can be expressed in dollars or percentage (Total Revenue - Management Controllable expense)/Rooms Available to Sell" "Flow-through - Correct answer The relative change in profit dollars expressed as a percentage of the change in revenue dollars (GOP this year - GOP last year)/(Total revenues this year - total revenues last year)" "Index - Correct answer a measure of a property's performance in relation to its competitive set. An index of "100" indicates that the property performed equal to its comp set's average. An index greater than 100 indicates a property is performing above the comp set's level; an index below 100 indicates the property is performing below its comp set's average" "Competitive Set - Correct answer A group of four or more properties selected by a hotel for purposes of comparison. A single hotel or brand can make up a minimum of 35% of the reporting rooms of any competitive set in order to protect proprietary data." "Occupancy Index - Correct answer an index designed to measure a property's share of rooms sold" "Average room rate index - Correct answer A measure of a property's pricing performance in relation to its competitive set" "RevPAR index - Correct answer A measure of a property's revenue generation performance in relation to its competitive set" "Market share (supply) - Correct answer The proportion of the market's rooms controlled by the subject hotel" "market share (demand) - Correct answer The proportion of the market's total rooms sold that were sold by the subject hotel" "market share (revenue) - Correct answer The proportion of the market's rooms revenue captured by the subject hotel" "Strong Occupancy/ Average ADR index - Correct answer Indicates that guests perceive strong value at current rate structure and that many likely would be willing to continue booking even at higher rates." "Average Occupancy/Strong ADR Index - Correct answer Indicates that guests perceive strong value at current rate structure. Increase discounted offerings during slack demand periods to fill more rooms." "Strong Occupancy/Strong ADR index - Correct answer Indicates that guests perceive strong value at current room rates and the property's market position is strong. Increase rates (and service levels) during periods of highest demand to maintain and expand market dominance." "Weak Occupancy/Average ADR index - Correct answer Indicates that the average guests does not perceive strong value at the current rate structure; carefully reexamine marketing efforts as well as service levels prior to seeking to expand customer base or increase rates" "Average Occupancy/Weak ADR index - Correct answer Indicates that guests perceive value but only at reduced rates; carefully evaluate physical facility and service levels prior to seeking increased rates." "Weak Occupancy/ Weak ADR index - Correct answer Indicates very poor guest perception of product and service levels at the current rate structure. Reexamine marketing efforts, product service levels, and facility quality as well as brand affiliation prior to seeking significantly increased rates." "SMERF - Correct answer Social, Military, Educational, Religious, Fraternal" "Marketing Mix - Correct answer the relative proportion of revenue contributed by each of a hotel's most important identified guest types" "Last year Carl's hotel had an occupancy index of 120%. From that information, what can be said about Carl's hotel? - Correct answer It achieved a higher average occupancy % than its comp set" "Last month Carl's hotel had a RevPAR index of 133%. Based on that information alone; what does Carl know for sure about his hotel's performance last month? - Correct answer His ADR or occupancy index will exceed 100%" "What information is never included in the STAR report? - Correct answer Performance data for individual competitors" "To improve upon revenue management measurements within the lodging industry, some have suggesting using GOPPAR because - Correct answer this measurement considers cost in addition to revenue" "To determine your property's supply share, you would divide your properties available rooms by what? - Correct answer Total of all rooms of the competitive set including your property" "Product cost percentage (pricing method) - Correct answer A pricing method that relies on product cost percentage targets when determining menu prices Costs of products sold/All product sales" "Pricing Factor (foodservice) - Correct answer A constant number used to help determine foodservice product menu prices." "Product cost: plus (pricing method) - Correct answer Any of a number of pricing methods that consider product cost as well as one or more additional costs when determining selling price" "Prime cost - Correct answer the sum of the product cost and labor cost required to produce a menu item" "contribution margin (cm) - Correct answer the profit (margin) that remains after a product's cost is subtracted from its selling price" "Puzzle - Correct answer High contribution margin, low popularity" "Star - Correct answer High contribution margin, high popularity" "Dog - Correct answer Low contribution margin, low popularity" "Plow Horse - Correct answer Low contribution margin, high popularity" "Menu Mix - Correct answer The total number of various food and beverage products (menu items) ordered by guests during a designated time period" "Check average - Correct answer The mean amount spent per visit by each restaurant guest during a designated time period (e.g., by day part (lunch or dinner) or calendar period (daily, weekly, or monthly). total revenue/guests served" "Price blending (food service) - Correct answer The process of pricing food and beverage products with different cost ratios in such a way as to optimize revenues in a least cost manner" "Revenue Center Contribution % - Correct answer Revenue Center Sales/Total Revenue" "Day Part Contribution % - Correct answer Day part sales/total revenue" "For-profit (foodservice) - Correct answer A foodservice operation whose continued operation is dependent on its ability to generate income in excess of expenses." "3-step process for measuring revenue change - Correct answer Step 1. Determine sales for this accounting period Step 2. Calculate THIS accounting period's sales minus LAST accounting period's sales Step 3. Divide the difference in Step 2 by last accounting period's sales to determine the percentage variance" "same-store sales - Correct answer Sales revenues achieved by operations that have been open for more than one year. Also referred to as same-store revenue, comparable (comp) sales, or like for like (LFL) sales." "Revenue per Square Foot - Correct answer An operations total annual revenue divided by the number of square feet occupied by the operation" "Which of the following is an opportunity to employ revenue management strategies in restaurants? - Correct answer Time management, capacity management, and menu management" "In F&B, revenue Center Contribution is communicated as a percentage and is calculated by dividing Revenue Center sales by - Correct answer total revenue" "As a foodservice RM, there are a variety of ways you can assess the sources of your revenues: Revenue Centers, Service Styles, AND which of the following: - Correct answer Day parts" "Which factor has historically provided the basis for a foodservice manager's assessment of revenue generation efficiency? - Correct answer Menu items sold" "What would be the typical impact on RevPASH of an increase in guest duration? - Correct answer RevPASH would increase if check average did not change (?)" "RMs must be more concerned with the quality of revenues achieved than with revenue quantity. There are 4 keys to doing that: - Correct answer - Championing Revenue Management - Clearly Defined Areas of Responsibility - Effective Price Management - Candid Product and Service Self-Assessment" "As an RM your vision must be - Correct answer - identifiable - communicable - inspiring - rewarding" "Ownership of responsibility - Correct answer The individual or department with primary accountability for a defined task or mission" "sales - Correct answer owns the customer relationship. it is the RM's job to ensure pricing and inventory control decisions support and enhances sales relationships; not to damage them" "Marketing - Correct answer owns the sales MESSAGE. RMs who are doing a good job in pricing and inventory management help keep the sales message clear and easily understood by costumers" "Accounting - Correct answer also known as the controller's office in a hotel, owns the REVENUE-RELATED DATA" "Distribution - Correct answer Owns the management of CHANNELS" "Operations - Correct answer Owns the GUEST'S EXPERIENCE" "Revenue Management Relationship - Correct answer Revenue management owns INVENTORY or its PRICE" "Cyclical business - Correct answer A business affected by identifiable but only marginally predictable fluctuations in economic activity" "Seasonal (business) - Correct answer A business affected by an identifiable and very predictable fluctuation in economic activity" "Distressed market - Correct answer An economic condition that results in revenue levels that are significantly (10% or more) below historic norms" "Leveraging - Correct answer the use of borrowed money to acquire business assets" "Displacement analysis (revenue) - Correct answer A structured examination of the relative merits of choosing among alternative pieces of business for the purpose of identifying the piece that optimizes revenue" "Tammy owns a tanning salon. Her salon has five tanning beds; thus she faces supply constraints based on capacity. In her business what additional factor acts to constrain supply? - Correct answer Time" "Revenue optimization strategies can make the most impact on inventory management in industries with which kind of cost structures? - Correct answer low variable costs and high fixed costs" "Selling season tickets to sporting events such as professional baseball or basketball games at a price per game that is lower than the cost of individual tickets to all of the games is an example of what revenue optimization activity? - Correct answer Product versioning" "In the past 20 years what has been the trend regarding the number of hospitality- related business owners choosing to affiliate with franchisors? - Correct answer Their numbers are increasing" "Which of the following statements best describe the structure of a typical CVB? - Correct answer A quasi governmental agency" "which of the following statements about restaurant pricing methods is true? - Correct answer Restaurant pricing methods are very different from hotel industry pricing methods" "which menu pricing system would utilize an operation's prime costs when calculating its selling prices? - Correct answer Product cost: Plus" "In which menu pricing approach would Menu Engineering as proposed by Kasavana and Smith be utilized? - Correct answer Contribution Margin Pricing" "Poco Miller's restaurant has 130 seats. Last night Poco served 295 guests. What was is the formula Poco would use to calculate her table turns? - Correct answer 295/130 = table turns" "What food service value-related factor is most affected when a revenue manager successfully implements a price blending strategy? - Correct answer menu mix"