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Marketing Final Exam

Model pricing msc blooms comprehension 54 use complex

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Unformatted text preview: e discounted prices, and overbooking capacity. PTS: 1 REF: 308 OBJ: 19-4 TOP: AACSB Reflective Thinking KEY: CB&E Model Pricing MSC: BLOOMS Comprehension 54. _____ use complex mathematical software to profitably fill unused capacity. a. Yield management systems b. Capacity correlation systems c. Service forecasting tools d. Service management systems e. Capacity management software ANS: A Yield management systems use complex mathematical software to profitability fill unused capacity by discounting early purchases, limiting early sales at these discounted prices, and overbooking capacity. PTS: 1 REF: 308 Thinking KEY: CB&E Model Pricing OBJ: 19-4 TOP: AACSB Reflective MSC: BLOOMS Knowledge 55. Allstate has more than 1,500 price levels determined by complex algorithms that analyze 16 credit report variables, including late payments and card balances. Allstate is using a _____ to set prices. a. yield management system b. capacity correlation system c. service forecasting tools d. service management system e. capacity maintenance tool ANS: A A yield management system is complex mathematical software used to profitably filled unused capacity. PTS: 1 REF: 308 Thinking KEY: CB&E Model Pricing OBJ: 19-4 TOP: AACSB Reflective MSC: BLOOMS Application 56. Which of the following statements about yield management systems (YMS) is true? a. The first use of YMS was in the U.S. car industry as it looked for ways to compete with imports. b. YMS eliminate the problem of simultaneous production and consumption from services. c. YMS cannot be used by any other businesses but services. d. YMS are complex pricing systems used to set equilibrium pricing points. e. YMS are mathematically complex systems to make use of underutilized capacity and reduce the cost of perishability. ANS: E YMS was first used in the airline industry, but it is now used by automobile manufacturers to make use of underutilized capacity. PTS: 1 REF: 308 Thinking KEY: CB&E Model Pricing OBJ: 19-4 TOP: AACSB Reflective MSC: BLOOMS Analysis 57. Chad has calculated the sales volume at which his lemonade stand’s costs equal revenue. Over dinner, he announced to his family that he only needed to sell 50 glasses of lemonade at \$5 per glass to cover all his costs (lumber and nails for the stand, lemons, sugar, etc.). Which important factor has Chad excluded from his analysis? a. Fixed and variable cost determination b. Consumer demand c. Target return pricing d. Break-even analysis e. Market share ANS: B Chad’s analysis only includes company costs and does not consider consumer demand. PTS: 1 REF: 309 Thinking KEY: CB&E Model Pricing OBJ: 19-5 TOP: AACSB Reflective MSC: BLOOMS Application 58. The two types of costs a marketer needs to consider when setting prices are: a. primary and secondary b. variable and fixed c. marginal and absolute d. short term and long term e. elastic and inelastic ANS: B A variable cost is a cost that varies with changes in the level of output (e.g., cost...
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