Revenue Management Quiz 1 – Flashcards
Unlock all answers in this set
Unlock answersquestion
Revenue
answer
The amount of sales achieved in a specific time period. Calculated as Numbers of Units sold X unit price
question
Profit
answer
The net value achieved by a seller and a buyer in a business transaction
question
Barter System
answer
A trading system in which goods and services are exchanged without the use of money.
question
ROI
answer
Reward to investors for taking a risk. Calculated by taking The return and dividing that by the original investment
question
Customer-Centric revenue management
answer
A R.M. philosophy that places customer gain ahead of short-term rev maximization in rm decision making
question
Constrained Supply
answer
When suppliers struggle to satisfy demand
question
Hard Constraint
answer
Supply constraint that can't be removed regardless of demand. E.X(Hotel Room/Restaurant Tables)
question
Soft Constraint
answer
Supply constraint that with sufficient time can be changed. E.X.(Airplane service)
question
Yield Management
answer
Demand Based Revenue Management strategy. Allowing your consumers demand of your rooms to determine how much you're charging.
question
Average Daily Rate
answer
Average selling price of guest rooms during a specific time period. Total Revenue/Total rooms sold
question
Occupancy Percentage
answer
The number of rooms sold represented as a percentage. Total rooms sold/Total available rooms
question
RevPAR
answer
Average revenue generated by each available guest room during a specific period of time. Calculated by ADR X Occupancy percentage
question
RevPOR
answer
Revenue per occupied room. Average revenue generated by each occupied guest room during a specific time. Total Revenue/Total occupied rooms.
question
GOPPAR
answer
Gross operating profit per available room. Average gross operating profit generate by each available guest room. Total Revenue- Management Controllable Expense all over Total Rooms available
question
Competitive Set
answer
A group of similar and directly competing lodging properties to which an individual hotel's operating performance is compared.
question
Pace Report
answer
A summary report describing the amount of future demand for a lodging propert's rooms and the rate at which it is being captured
question
Rack Room Rates
answer
The price of rooms when no discounts of any types are offered
question
QSR
answer
Quick Service restaurant. Same as fast food
question
RevPASH
answer
Revenue per avaialable seat hour. Revenue for an amount of time/(Number of seats X Hours they were avaialable)
question
DOSM
answer
Director of Sales and Marketing.
question
Two-tiered Price
answer
A RM strategy to make customers pay additionally for seperate offered services. (Buying a bottle of wine @ a restaurant, Mini bar)
question
Consumer Rationality
answer
The belief that any decision to purchase from a consumer point of view is based on some sense of personal benefit.
question
Value
answer
The amount of percieved benefit minus the price paid.
question
Value Proposition
answer
A statement describing the good or service to be recieved and, the price paid for it. (Menu Item)
question
Oenology
answer
The study of wine and winemaking
question
Law of Supply
answer
The idea that when demand goes up, supply will follow
question
Law of Demand
answer
The idea that when price goes up, demand will fall
question
Break-Even point
answer
The point at which a firms revenue exactly equals their expenses
question
Minimum Sales point
answer
The revenue level required to reach the break even point for a period of time
question
Cost Based Pricing
answer
A pricing philosophy that involves summing products cost incurred, with a desired profit to arrive at an item's selling price
question
Four I's of Service
answer
Intangibility, Inconsistency, Inseperability, Inventory.
question
Intangibility (Relating to service)
answer
A service cannot be touched or seen before it is purchased.
question
Inconsistency
answer
Uneven performance results from variations between the skills of those delivering the service
question
Inseperability
answer
Making a distinction between the individual delivering the service and the service itself
question
Inventory
answer
Unsold stock vanishes if not sold and the costs associated with idle production capacity can be high
question
Idle Production Capacity
answer
A condition when is servivice is available but there is no demand for it
question
Value Based Pricing
answer
The practice of applying prices to a product based on a buyers percieved value
question
Differential Pricing
answer
The practice of applying different prices to different buyers for the same product
question
Inventory Management
answer
Process of allocating and modifying the number of products available for sale at various prices and through different channels
question
Consumer Surplus
answer
The difference between what a buyer would be willing to pay and the price
question
FOM
answer
Front Office Manager. The individual in charge for administration
question
Arbitrage
answer
The practice of buying at a low price and reselling at a high price. One of the difficulties RM's face in pricing
question
Price Fence
answer
Ethical and Legal standards for price differentiation. It determines what you're allowed to do as an RM when it comes to pricing
question
Central Reservation System(CRS)
answer
Structure used to accept a guests reservation. Directly communicated to the hotel -(Kayak, etc...)
question
Property Management System(PMS)
answer
The hardware and software used by hotels to store the information about their guests
question
Intermediary
answer
An entity that acts as acommunication or service link between buyers and sellers(Kayak)
question
Net Room Rate
answer
Standard ADR-Distribution Channel Cost
question
Net ADR Yield
answer
Net room rate/ Standard ADR
question
Price band
answer
Span from lowest to highest price in a range of prices
question
Revenue Management
answer
Strategic Pricing to optimize greatest business income
question
Revenue Optimization
answer
Strategic pricing to optimize greatest business profits
question
Predatory Pricing
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
question
Price gouging
answer
Increase of prices during a natural disaster or emergency, deemed unfit by society
question
Dual entitlement (theory)
answer
The idea that consumers feel they are entitled to a reasonable price. And, that businesses are entitled to a reasonable profit
question
Reference Price
answer
Price percieved by customers to be the normal price for a product
question
Customer Relations Management (CRM)
answer
A term used to describe a variety of processes (usually computerized) to deal with their customers
question
Rooms Manager
answer
Individual in charge of both the front office and the housekeeping departments
question
Transient Room
answer
A room sale made to an individual who is not part of a large group
question
Line-level employees
answer
Non-managerial employees. Mostly direct communication with the customer
question
4 P's of Marketing
answer
Product, Promotion, Place and Price
question
Sherman Anti-Trust Act
answer
Outlawed all contracts and conspiracies that prevents any company from holding too much of a market
question
The Federal Trade Commission Act
answer
Made in an effort to enforce the Sherman Antitrust Act
question
Clayton Act
answer
Made to restrain companies from unfair and illegal pricing
question
The Robinson-Patman Act
answer
Outlawed predatory pricing for the purpose of monopolizing. Also, prevents collusion among companies.
