When you decide to go and have a dinner with your friends in a world class hotel such as the Langham hotel or Coronado Beach, perhaps you would be horrified by the high price you would have to pay for a bottle of soft drink such as Coca Cola or Pepsi Cola or wine or even bottled water. Perhaps you begin to ponder why the same commodity that you can get at a supermarket at one tenth the hotel price is going for such an astronomical price at the hotel.Of course, such facilities will have a warning such "you are not allowed to bring in your own food or drinks" posted at appropriate places in the facility for the attention of customers.In another scenario, you enter a designer shop to buy clothes with a designer label for a friend on their birthday or on Valentine day and you reckon the clothes are so much expensive compared to similar own brand clothes from a clothing or chain store, even though they may cost a similar amount to produce.

Questions

Using your knowledge in basic economics, especially of the concept of demand and supply, attributes of a competitive market and price elasticity of demand, briefly discuss the following

A. Why may a hotel charge such very high prices for wine, soft drinks or even bottled water and yet quite reasonable prices for food and still get away with such high prices?

B. Why are designer shops able to price their clothes so very expensive and yet still get clients even though similar clothes that are available in a supermarket chain shops cost pretty much less?

When you decide to go and have a dinner with your friends in a world class hotel such as the Langham hotel or Coronado Beach, perhaps you would be horrified by the high price you would have to pay for a bottle of soft drink such as Coca Cola or Pepsi Cola or wine or even bottled water. Perhaps you begin to ponder why the same commodity that you can get at a supermarket at one tenth the hotel price is going for such an astronomical price at the hotel.Of course, such facilities will have a warning such "you are not allowed to bring in your own food or drinks" posted at appropriate places in the facility for the attention of customers.In another scenario, you enter a designer shop to buy clothes with a designer label for a friend on their birthday or on Valentine day and you reckon the clothes are so much expensive compared to similar own brand clothes from a clothing or chain store, even though they may cost a similar amount to produce.

Questions

Using your knowledge
in basic economics, especially
of the concept of demand and supply, attributes of a competitive market and price elasticity of demand, briefly discuss the following

A. Why may a hotel charge such very high prices for wine, soft drinks or even bottled water and yet quite reasonable prices for food and still get away with such high prices?

B. Why are designer shops able to price their clothes so very expensive and yet still get clients even though similar clothes that are available in a supermarket chain shops cost pretty much less?

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a)In order to determine the average price of hotel rooms in Atlanta. Using a 0.1 level of significance, we would like to test whether or not the average room price is significantly different from $110. The population standard deviation is known to be $16. A sample of 64 hotels was selected. The p-value associated with the test statistic (z) is calculated and it is 0.03. We conclude that the average price of hotel rooms in Atlanta is NOT significantly different from $110. (Enter 1 if the conclusion is correct. Enter 0 if the conclusion is wrong.)

b)In order to determine the average price of hotel rooms in Atlanta. Using a 0.1 level of significance, we would like to test whether or not the average room price is significantly different from $110. The population standard deviation is known to be $16. A sample of 64 hotels was selected. The test statistic (z) is calculated and it is -1.45. We conclude that the average price of hotel rooms in Atlanta is NOT significantly different from $110. (Enter 1 if the conclusion is correct. Enter 0 if the conclusion is wrong.)

C)A sample of 28 account balances of a credit company was taken to test whether the mean of all account balances is significantly greater than $1,150. Using the sample standard deviation, the test statistic (t) was calculated to be $1.93. We use a 0.05 level of significance. Assume the population of account balances is normally distributed and the population standard deviation is unknown to us.We conclude that the mean of all account balances is significantly greater than $1,150. (Enter 1 if the conclusion is correct. Enter 0 if the conclusion is wrong.)

1. An amusement park, whose customer set is made up of two markets, adult and children, has developed demand schedules as follows:

The marginal operating cost of each unit of quantity is $5. (Hint: Because marginal cost is a constant, so is average variable cost. Ignore fixed cost.) The owners of the amusement park want to maximize profits.

1. Calculate the price, quantity, and profit for each segment if the amusement park charges a different price in each market. (Hint: calculate profit at each price in the adult market, then in the child market, and choose profit maximizing in each. Using a spreadsheet would make this task manageable.)

Adult market price (in dollars):

Adult market quantity:

Adult market profit (in dollars):

Child market price (in dollars):

Child market quantity:

Child market profit (in dollars):

Total profit (adult + child, in dollars):

2. Calculate the price, quantity, and profit if the amusement park charges the same price in the two markets combined. (Hint: Add adult and child quantities together, and treat this total and the entire market quantity at each price.)

Market price (in dollars):

Quantity (child + adult at this price):

Profit:

3. Is profit higher, lower, or the same when the market is split with different prices for adults and for children?

According to Marriott’s vice president of marketing and public relations, quality, price, service, amenities, comfort, and convenience are all independent variables that affect the preferences for a hotel chain. Assume that in a survey, each of the independent variables is measured on a 7-point scale with 1=poor and 7=excellent. Preference for hotel chain is also measured on a 7-point scale, with 1=not at all preferred and 7=greatly preferred. Each respondent rates Marriott and three competing hotel chains on all the independent variables as well as preference to stay there on a vacation.

1. What sampling plan should be adopted and how should the sample size be determined for the survey?

Survey analysis: what statistical technique would you use to answer the following questions? Please state the technique you recommend, justify your reasons and outline any important assumptions.

2. Is preference related to each of the independent variables considered individually? What is the nature of the relationship you expect?
3. Is preference related to all the independent variables considered simultaneously?
4. Do the respondents evaluate the hotel chains more favourable on quality than they do on price?
5. The sample is divided into two groups: regular patrons of Marriott and patrons of other hotels. Do these two groups differ in terms of their ratings of Marriott on quality?
6. Are the two groups in the question above different on terms of income measured as high, medium and low?
7. The sample is divided into three groups, heavy, medium and light users of hotels. Do the three groups differ in terms of preference for Marriott?

Researchers are comparing the proportion of University Park students who are Pennsylvania residents to the proportion of World Campus students who are Pennsylvania residents. Data from a sample are presented in the contingency table below.

1. Construct a 95% confidence interval to estimate the difference between the proportion of all University Park students who are Pennsylvania residents and the proportion of all World Campus students who are Pennsylvania residents. If assumptions are met, use the normal approximation method. Show how you checked assumptions. You should not need to do any hand calculations. Use Minitab Express to construct the confidence interval. Remember to copy+paste all relevant Minitab Express output and always clearly identify your final answer. [15 points]
2. B. Interpret the confidence interval that you computed in part A by completing the following sentence. [5 points]
3. C. Use the five-step hypothesis testing procedure given below to determine if there is evidence of a difference between the proportion of University Park students who are Pennsylvania residents and the proportion of World Campus students who are Pennsylvania residents. If assumptions are met, use the normal approximation method. Use Minitab Express. You should not need to do any hand calculations. Remember to copy+paste all relevant Minitab Express output. [30 points]

Stan owned PureHands, a business that sold hand sanitizer. He knew that two local hotels had just installed a large number of hand sanitizing stations and were buying all of their hand sanitizer from his competitor, GermAway. Stan went to the Hotel Aja, and asked the Purchasing Director if she would consider buying the hotel’s hand sanitizer from him. The director said that she could not do it, because she was bound by a three-year contract to buy all hand sanitizer exclusively from GermAway. Stan offered to sell the hand sanitizer for 15% less than GermAway’s price if the director would buy from PureHands instead of GermAway. The Hotel Aja Purchasing Director then agreed to stop accepting and paying for shipments of hand sanitizer from GermAway. and to start buying from PureHands. Stan and the director immediately wrote and signed a contract to this effect. Stan then went to Hotel Gaucho, and asked the Purchasing Manager if he would buy the hotel’s hand sanitizer from PureHands. The manager told Stan he had been looking for a more competitive price for hand sanitizer, and told Stan the price he was paying with GermAway. Stan said he could sell his hand sanitizer for 10% less, and then the manager agreed to switch to PureHands as Hotel Gaucho’s supplier of hand sanitizer. Stan and the manager immediately wrote and signed a contract to this effect.

Use the IRAC method to analyze the likely outcome of any TORTS lawsuits that could arise from the above case problem.

Concur Technologies, Inc., is a large expense-management company located in Redmond, Washington.  The Wall Street Journal asked Concur to examine the data from 8.3 million expense reports to provide insights regarding business travel expenses. Their analysis of the data showed that New York was the most expensive city, with an average daily hotel room rate of $198 and an average amount spent on entertainment, including group meals and tickets for shows, sports, and other events, of $172. In comparison, the U.S. averages for these two categories were $89 for the room rate and $99 for entertainment. The table in the Excel Online file below shows the average daily hotel room rate and the amount spent on entertainment for a random sample of 9 of the 25 most visited U.S. cities (The Wall Street Journal, August 18, 2011). Construct a spreadsheet to answer the following questions.

1. Develop the least squares estimated regression equation.

   Entertainment = (___)+(___) Room Rate ( to 4 decimals)

2. Provide an interpretation for the slope of the estimated regression equation (to 3 decimals).

   The slope of the estimated regression line is approximately (____) . So, for every dollar increase in the hotel room rate the amount spent on entertainment increases by $ (___).

3. The average room rate in Chicago is $128, considerably higher than the U.S. average. Predict the entertainment expense per day for Chicago (to whole number).

   $ (___)
   
   

   Hotel Room Rate ($)	Entertainment ($)
   152	162
   96	104
   87	103
   113	141
   92	98
   103	121
   133	167
   88	140
   81	96

Incorporated by the founder of the Tata Group, Jamsetji Tata, the company opened its first hotel,
the Taj Mahal Palace, in Mumbai in 1903.
For over a century, The Taj Mahal Palace, Mumbai, has remained an iconic flagship and has set a
benchmark for fine living with exquisite refinement, inventiveness and warmth. Indian Hotels
Company Limited (IHCL) has a portfolio of 170 hotels, including 25 under development, in over
eighty locations in twelve countries spread across four continents.
IHCL is amongst South Asia’s largest hospitality companies by market capitalization and represents
a global hallmark of quality in hospitality.
The Tata Group owns hotels in India and all over the world and in order to effectively control
its hotels systems the management have put the following in place:
• Hotel room key cards
• Security alarm systems
• Inventory control
• Hotel management systems
• Financial controls
According to your understanding of organisational control explain what is meant by the
following:
a) Planning, organising, coordination and controlling [25 marks]
b) Explain how the above control systems can be used to monitor, measure, and evaluate
the Tata Group Hotel Systems? [25 marks]
c) Give five purposes of control systems used by TATA Hotels and how staff are made
to contribute to their success? [25 marks]
d) Describe the steps in organisational control and explain why corrective action is
important? [15 marks]
e) Give three financial ratios which can be used in Financial controls and their use? (10
marks) [100 marks]

a. Price discrimination is only possible in a (Click to select)(monopoly,long-run,perfectly competitive,unprofitable) market structure.

Suppose you are advising Five Banners Amusement Park, which is the only such firm in the state. Two types of visitors are interested in the park: middle-class families with young kids, and teens/college students.

b. What is wrong (from the perspective of Five Banners' revenue) with charging all visitors the same high admissions price?

• * People will expect extremely awesome rides, which are expensive to build.

• * Five Banners would have to pay its employees more.

• * Teens and college students would not be able to visit, even though they would have if the price was lower.

• * Five Banners would make less money on food sales.

c. What is wrong (from the perspective of Five Banners' revenue) with charging all visitors the same low admissions price?

• * Five Banners would start to attract competitors.

• * Five Banners will get less revenue than it could have from the families, who are willing and able to pay more.

• * The park will be overwhelmed by visitors, leading to unsafe conditions.

• * Five Banners would have to pay its employees less.

d. If Five Banners engages in price discrimination, the number of people visiting the park will be (Click to select)(the same as, less than, more than) if they charged everyone the same high monopoly price; and will be (Click to select)(the same as, more than, less than) the socially optimal number of visitors that would happen in a perfectly competitive market.