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.

Hotel Sport is in the suburb of large metropolitan area near a sports complex that has a stadium suitable for baseball and soccer games. The 250-room independent hotel is a select-service property in the mid-range category. Its rate structure is simple:

Rack                                         $190

Weekend                                 $159

Low season/Government    $140

Groups (of 15+)                     $130

Best available rate                 $120

Late August is traditionally a slow season in the hotel and business picks up in September after area businesses and government offices are back in full gear. The sell rate in late August is the $140 low season rate. For the weekend of August 20 to 22 the forecasted occupancy is around 130 rooms. The reservations on the book are 90 guaranteed and 25 non-guaranteed reservations. The hotel expects 15 walk-ins.

Questions

1. It is July 29. What rate should the revenue manager approve to quote for reservation inquiries for the weekend of August 20–22?

2. Now it is July 30. One day later: The Major League Soccer Franchise of the city had just clinched a spot in the playoffs and the first game in the elimination round will be against a team from California, the L. A. Galaxy. They have the world’s most famous superstar, David Beckham, in its lineup on August 21. All the hotels in the city are filling up fast and phones with reservation inquiries are ringing off the hook at the Sport.

What rate should the revenue manager approve to quote now for group reservation inquiries for the weekend of August 20–22? Are there any stay control measures that should be considered?

Question:

Temple Insurance Company Temple Insurance Company (TIC) provides automobile insurance throughout the United States. Last year, a new president was hired by TIC's board of directors to improve the company's competitiveness and customer service. After spending months assessing the situation, the new president introduced a strategic plan to strengthen TIC's competitive position. He also replaced three vice presidents. Jim Leon was hired as vice president of Claims (TIC's largest division) with 1500 employees, 50 claims centre managers, and 5 regional directors.

Jim immediately met with all of the claims managers and directors, and he visited the employees at TIC's 50 claims centers. As an outside, this was a big task but his strong interpersonal skills and ability to remember names and ideas helped him through the process. Through these visits and discussions, Jim discovered that the claims division had been previously managed in a relatively authoritarian, top-down manner. He could also see that morale was very low and employee-management relations were guarded. High workloads and isolation were two other common problems since claims adjusters worked in tiny cubicles. Several managers acknowledged that the high turnover among claims adjusters was partly due to these conditions.

Following discussions with TIC's president, Jim decided to make morale and supervisory leadership his top priority. He initiated a division newsletter with a tear-off feedback form for employees to return with their comments. He announced an open-door policy in which any claims division employee could speak to him directly and confidentially without first going to the immediate supervisor. Jim also initiated a flex-time program so that employees could design their work schedules around their needs. This program became a model for other divisions of TIC.

One of Jim's most pronounced symbols of change was the "Claims Management Credo" outlining the philosophy that every claims manager would be required to follow. At his first meeting with the complete claims management team, he presented a list of what he thought were important philosophies and actions of effective managers. The management group was asked to select and prioritize items from the list. The final list would be the division's management philosophy and all managers would be held accountable for abiding by its principles. Most claims managers were uneasy about this process but understood that the company was under competitive pressure and that Jim was using this exercise to demonstrate his leadership.

The claims managers developed a list of 10 items, such as encouraging teamwork, fostering a trusting work environment, and so on. The list was circulated to senior management for their comments and approval and then sent back to the claims managers for their endorsement. Once this was done, a final copy was sent to every claims division employee. Jim also announced plans to follow up with an annual survey to evaluate each of the claims manager's performance. This concerned the managers but most of them believed that this was a result of his initial enthusiasm and that he would be too busy to implement the survey later.

A year later, Jim announced that the first annual survey would be conducted. All claims employees were asked to complete the survey and return it confidentially to the human resource department where the results would be compiled for each claims center manager. The survey asked employees to indicate the extent to which their manager had lived up to each of the 10 items in the credo provided an opportunity to give written comments. Claim center managers were surprised that the survey would be conducted and were even more worried when Jim indicated that the results would be shared with employees. What results would employees see? Who would distribute these results? What happens if a manager gets poor ratings from his or her employees? "We'll work out the details later" said Jim in response to these questions. "Even if the results are not great, it will give us a good baseline for next year's survey".

The survey had a high response rate, with most employees completing it. Each report showed the claim center manager's average score for each of the 10 items, as well as how many employees rated the manager at each level of the 5-point scale. Comments made by the employees were included in the report as well. No one was prepared for the results of the survey. Most managers received moderate or poor ratings on the 10 items. Very few managers averaged above 3.0 (out of 5 points) on more than a couple of items. The comments were even more devastating than the ratings, ranging from mildly disappointed to extremely critical of the claims managers. Employees also expressed their frustration with the company, its high workloads, and their isolated working conditions. In their comments, several employees stated that they were skeptical about the changes that Jim had promised.

The survey results were sent to each claims manager, the regional director, and employees at the claims center. Jim instructed managers to discuss the survey results with their regional managers and directly with employees. The claim center managers, who thought that employees would only see the average scores, went into shock when they realized that the reports included individual comments. Some managers went to their regional directors, complaining that the comments would ruin their careers. Many directors sympathized but the results were already available to employees. When Jim heard about the concerns, he agreed that the results were lower than expected and that the comments should not have been shown to employees. After discussing the situation with his directors, he decided that the discussion meetings between managers and their employees should continue as planned. He believed that to delay or withdraw the reports would undermine the credibility and trust that Jim was trying to develop with employees. The regional managers were encouraged to attend the meetings held between claims managers and their employees to minimize direct conflict. Although these meetings went smoothly, a few of them resulted in harsh feelings between managers and their employees since the sources of the comments were easily identifiable.

A few months after the meetings, two claim center managers quit and three others asked for transfers back to non-management positions with TIC. Meanwhile, Jim wondered how to manage this process more effectively, particularly since employees expected another survey the following year.

1) What are the forces driving change and what are the forces resisting change in this situation? To what extent is this change effort as a challenge? For example, are the resisting forces stronger than the driving forces?

2) Was Jim Leon successful at bringing about change? Why or why not? Or in what ways "yes" and in what ways "no"?

3) What should Jim Leon do now?