you are not familiar with priceline.com, go to its Web site. Assume that an individual bids $50 on priceline.com for a room in Dallas, Texas, on August 24. Assume that August 24 is a Saturday, with low expected room demand in Dallas at a Marriott hotel, so there is excess room capacity. The fully allocated cost per room per day is assumed from hotel records as follows: Housekeeping labor cost* $25 Hotel depreciation expense 37 Cost of room supplies (soap, paper, etc.) 5 Laundry labor and material cost* 10 Cost of desk staff 5 Utility cost (mostly air conditioning) 3 Total cost per room per day $85 *Both housekeeping and laundry staff include many part-time workers, so that workload can be matched to demand. Should Marriott accept the customer bid for a night in Dallas on August 24 at a price of $50?
you are not familiar with priceline.com, go to its Web site. Assume that an individual bids $50
on priceline.com for a room in Dallas, Texas, on August 24. Assume that August 24 is a Saturday,
with low expected room demand in Dallas at a Marriott hotel, so there is excess room capacity. The
fully allocated cost per room per day is assumed from hotel records as follows:
Housekeeping labor cost* $25
Hotel
Cost of room supplies (soap, paper, etc.) 5
Laundry labor and material cost* 10
Cost of desk staff 5
Utility cost (mostly air conditioning) 3
Total cost per room per day $85
*Both housekeeping and laundry staff include many part-time workers, so that workload can be matched to demand.
Should Marriott accept the customer bid for a night in Dallas on August 24 at a price of $50?
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