Le Centre Sheraton Case

1. The local Mastermind store sells innovative educational toys. Part of their service is giving advice to customers about the best toys for a particular age group, which requires having more customer service representatives in the store. During the month long Christmas buying season, it makes half of its $500,000 yearly sales. Its contribution margin on average is 40% and its fixed costs for the year are about $150,000. The owner believes that she could make even higher sales, if she had more customer service representatives on the floor during the peak season. She plans on hiring four more people for 200 hours each at $20 per hour. How much additional revenue does she have earn to the nearest dollar

Based on the Excel Problem of chapter one, if the total capacity for this business is 725 will you stay in it? If you want to stay in it what price you need to obtain a break even point of 725?

Jerome Simelane, the airline's Commercial GM, “By using what we have learned over the years about international airline best practice‚ we have also created a cost structure which allows us to offer competitive fares without cutting any corners on quality‚ safety and reliability."

In 1997 the "Tour Customers" accounted for the highest business volume at CLL with 57% (1,710,000 overnight visitors) and rented over 80,000 nights. During the winter period this segment stayed the longest at CLL, between 7 to 14 nights. The greatest benefit from this sector to CLL was that rooms were booked well in advance and were guaranteed to be full. In the summer they spend the shortest duration at CLL, only one night, while receiving the highest discounts amounting to 27% of that of the independent customers. Perhaps, instead of such a high discount CLL can offer bundle compensation for size of the tour and number of nights spent at the hotel. The potential danger, resulting in a 25% decline in this segment, exists if CLL does not undertake any form of action that will further promote the "Tour Customers". The "Tour Customers" preferred smaller rooms; thus did not generate as much of revenue as they would have by renting larger rooms. Some of them demanded greater flexibility than the tours usually allowed. These customers required a lower level of service, which could potential transfer to CLL having more time to serve the customers that demand higher service, but also who are willing to pay for it. Due to the Asian economic crisis, CLL faces a threat of potentially losing its entire Asian market that accounts for 65% of the "Tour Customers". A

Considering that an average ticket price is $1500 and the cost per passenger is $200, each sold ticket generates $1,300 of the positive cash flow. Since $295,000 of the initial capital had been spent by November 14th, the following minimum number of passengers must sign up in order for Health Cruises to break even provided no more money is invested:

6. Breakeven books = 450000/ (24.95-3.5) = 20979. MedNet has to sell 20979 books to make breakeven. I think that this contract will be signed. 1% of monthly visitors will be about 43000

If she decides not to overbook 22 rooms, she might be missing 22*90 = $1,980 of revenue. Moreover, she might be losing an opportunity to establish a good relationship with the tour company, who may book steady numbers of 60 rooms on Saturdays in the future. This would generate additional profit, since we know from historical data that Saturdays are always under booked. Given a very low variable costs and marginal profit of 90$, it is a great opportunity for Snow to maximize profit during one of the slowest day of the week Saturdays (according to DOW indicator). However, she has to forecast demand for Saturday to make sure that she will have those rooms available. Denying a guest with reserved room can be very costly, especially for loyal customers and negatively reflect on hotel’s reputation.

Barna Luxury Travel will offer exclusive online and over the phone exclusive offers to members only. It is to the advantage of the customer to become a member to receive these incentives and discounted rates of travel. Membership only requires a set amount of annual travel which most travel savvy customers should meet with ease. Annual membership can be purchased at any time for $499.99. The difference in ticket prices for members’ vs non-members could be a savings of up to $1000

Greetings, it is my understanding that Sheraton Buganvilias may be open to a mutually financially advantageous relationship. I invite you to consider the following proposal.

PAYMENTS: Rent and/or other charges are to be paid at such place or method designated by the owner as follows: each payment shall be hand delivered and each public declaration shall be made in a weekly radio statement. OWNER acknowledges receipt of the First Month 's rent of $1500.00, and a Security Deposit of $1500.00, for a total payment of $3000.00.

Hallstead’s consultant has asked us to look into the feasibility of reducing prices 10 percent across the board. We have been told that the new pricing would generate new sales. If prices are cut by 10 percent sales tickets are projected to jump from 6,897 to 7,500 (an 8.7% increase). Without even running a scenario it is obvious that this pricing scheme would not work. With Hallstead’s current operating situation 7,505 sales are needed to break even. Reducing the prices will not even lift sales to this required threshold and worse yet, the sales dollars per ticket would be reduced, resulting in even more sales needed to breakeven. Nonetheless, the results of the scenario suggested by the consultant are shown in Table 4. As expected, the increase in sales would not be enough to offset the reduction in price. The result of such a move would be catastrophic. Hallstead’s losses would increase another $704k from this plan. In order to breakeven, 9,634 sales tickets would need to be realized (or $13,464,872 in sales). See Table 5 for additional breakeven data for this

In a worse case that an intense competition among employees occurs, the company should reset its pays distribution and incentives before (or along with) follow the above recommendations. Moreover, in the worst case that many more low-cost and low-fare airlines enter the same route with Ryanair, it is highly suggested that

In the case of the Hamilton hotel, Snow needs to make a decision as to if 60 additional rooms reservations should be accepted which could lead to overbooking (Weatherford & Bodily,1990). It is a problem of capacity utilization that is being faced in this particular case where revenue maximization is aimed while minimizing customer dissatisfaction.

To cover costs and achieve a 10% profit margin in the first year and increase exponentially thereafter.

On the other hand, based on Appendix 2 after consider all other variable cost like credit card fee, royalty, and with the assumption of fuel price did not increase. RON95’s contribution margin ratio was increase from