ISQS 3344Thureday 702Spring 2018 Quiz Quiz 3 702 2118 This Q

ISQS 3344-Thureday 702-Spring 2018 Quiz: Quiz 3 702 2-1-18 This Question: 1 pt Convention Hotel Customers Business Hotel Customers 278 $90 Variable Customers for this day Average pricelroom night $25 $110 700 $150 Rack Rate (max price) Maximum number rooms available/day Caloulate total to profit and hotel effectiveness percentage Total Contribution to Profit and Overhead Pacnet th ann wer boxes

Solution

Total contribution to profit and overhead, $

= ( Average price/ night – Variable cost / night ) x Business hotel customers for the day + ( Average price/ night – Variable cost / night ) x Conventional hotel customers per day

= ( 90 – 25) x 278 + ( 73 – 25 ) x 503

= 65 x 278 + 48 x 503

= 18070 + 24144

= 42214

TOTAL CONTRIBUTION TO PROFIT AND OVERHEAD = $42214

We define Hotel Management effectiveness as :

Hotel Management effectiveness

= Sum of ( Total revenue earned from both type of customers / Maximum revenue possible to earn from both types of customers )

= ( Sum of Average price / room night x Customer for the day )/ ( Sum of Rack rate x Maximum number rooms available) x 100

= ( 90 x 278 + 73 x 503) / ( 150 x 300 + 110 x 700)   x 100

= ( 25020 + 36719) / ( 45000 + 77000 ) x 100

= 61739/ 122000 x 100

= 50.60 %

HOTEL MANAGEMENT EFFECTIVENESS = 50.60%

TOTAL CONTRIBUTION TO PROFIT AND OVERHEAD = $42214