A common room pricing strategy used by hotels is to price each day for which this...

A common room pricing strategy used by hotels is to price each day for which this room can be reserved, as discussed in the lecture. The price of a stay is then the sum of the day prices spanned by the stay (i.e., checkin and checkout dates). Full-service airlines, as you may already know, typically price itineraries. a. Explain the differences between day pricing of hotel rooms and the pricing of airline itineraries? (i.e. What is the product?, What is the resource?, and What is being priced?) b. Consider the purchase of a customized laptop on Dell’s website. Customization involves choosing laptop components that have different price points. The choice of components determines the ultimate price of the laptop. Explain why the day pricing of hotel rooms is a special case of the problem of pricing laptop components being shown to customers in Dell’s website. c. Why is Dell’s pricing problem more complicated than the pricing problem faced by a hotel?

Expert Solution

b. The Dell problem is related to the hotel problem because the laptop is product, the components of the laptop (e.g. mother board, graphics card) are resources, and Dell prices the components (resources). The price of the laptop is the sum of the price of chosen components. Resources in the Dell problem are laptop components while in the hotel problem the resources are rooms on a particular day. The difference is how products use resources. In the hotel problem, clearly a multi-day stay can only be created by choosing adjacent days (resources) whereas components can be chosen in a more flexible manner to create laptops.

c. The Dell problem is more complicated because in addition to products being formed by many different combination of resources, Dell also has to decide which options to show for each component. The latter decision is not present in the hotel problem.

keosha answered 3 months ago

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