ISQS 3344- Thursday-702 - Spring 2018 Quiz: Quiz 3 702 2-1-18 This Question: 1 p

Question

ISQS 3344- Thursday-702 - Spring 2018 Quiz: Quiz 3 702 2-1-18 This Question: 1 pt 10, 5 (4 complete) Convention Hotel Customers Business Hotel Customers 278 $90 $25 $150 300 Variable Customers for this day Average pricelroom night Variable costiroom night Rack Rate (max price) Maximum number rooms available/day 503 $73 $25 $110 700 Caloulate total contribution to profit and hotel offectiveness percentage Total Contribution to Proft and Overhead Hotel Management Effectiveness %- round to 2 dec nal places, no % Enter your arsver neach of me anwer poxes cBook

Explanation / Answer

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

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