Reading+Response+4+Sample+Answers - offering deals such as...

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A202 Reading Response #4 Sample Responses Instructions: Do the assigned textbook reading for Tuesday’s lecture (pages 200-214). Then type your answers to the questions in the text box below. Be sure you correctly save and submit your response. No late responses will be accepted. 1. Suppose you are the owner of several extended-stay hotels (guests usually stay for one or more weeks). The hotels are located in major cities around the country. For your business, explain the relationship between capacity and demand in the short term. A hotel’s capacity is fixed in the short term (such a business cannot quickly build additional rooms), but demand for hotel rooms in the short term usually fluctuates significantly. Therefore, the hotel’s challenge is to try to match demand with capacity, by taking such actions as raising or lowering rates,
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Unformatted text preview: offering deals such as two weeks for the price of one, or even sending guests to other hotels if they have overbooked for a particular night. 2. When considering a set of decision options, what is the difference between a relevant cost analysis and a totals or gross approach? A relevant (or incremental) approach compares the costs and benefits of the decision options relative to one of the options (often the status quo, if that is one of the options). This approach singles out only those amounts that differ across one or more of the options. A totals or gross approach includes all of the costs and benefits associated with each option, regardless of whether the amount is relevant or not. In most cases, a totals approach should result in the same outcome as the relevant cost approach....
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This note was uploaded on 02/02/2010 for the course BUS-A 202 taught by Professor Keenan during the Spring '08 term at Indiana.

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