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A) There is currently some space available in Hotel T’s in-room mini-bars for guests to put their
own items. Out of scope
b) Hotel T is located in the United States. Not relevant
c) Some guests of Hotel T do not make any purchases from their in-room mini-bars. Not relevant
d) The money that Hotel T makes from the mini-bar purchases of its guests is less than the
money that Hotel T loses from discarding mini-bar items that have not sold by their HOLD
expiration dates.
e) It will cost Hotel T less money to maintain empty refrigerators in its guest rooms than to
maintain stocked mini-bars in those rooms. Hold

While e is true, in the premise manager does take into account of 1 item sold thus D is a better choice.
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A,B,C can be easily eliminated.

Out of D,E .E can be eliminated as it only takes into account the cost of maintaining empty refrigerators than to maintain stocked mini-bars but it neglects the profit after selling the food and beverages kept in the refrigerators.
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So we need to strengthen the fact that eliminating refrigerators altogether is a better strategy than having those same refrigerators empty in the guests room. Between D and E. E says that it will cost less money to maintain empty refrigerators than stocked minibars. Then if this is true why did they eliminate refrigerators altogether? This doesn't strengthen the conclusion, in fact it sort of weakens it. In D we have that the money made from purchases is less than the money lost from discarding. This makes perfect sense, that's why it is a better strategy to eliminate those minibars rather than have them stocked. This answer choice strengthens the conclusion and is thus the correct one

Hope this helps
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Surveys reveal that the vast majority of hotel guests in the United States resent the high
prices of the items in the mini-bars in their hotel rooms.These guests would prefer to have an
empty refrigerator in their rooms in order to have space to put their own food and beverages,
although a large percentage of these guests would still make at least one purchase from their
in-room mini-bar. After analyzing the results of the study, the management of Hotel T
decided that it would be more profitable to eliminate the mini-bar and install empty
refrigerators in each room. Which of the following, if true, would support Hotel T’s plan to
increase profitability by eliminating in room mini-bars in favor of empty refrigerators?

I don't understand the sentence below, hope someone can explain.

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These guests would prefer to have an empty refrigerator in their rooms in order to have space to put their own food and beverages, although a large percentage of these guests would still make at least one purchase from their in-room mini-bar

Does this mean that there will be an empty refrigerator AND a mini-bar in the room? How else would ppl make at least 1 purchase?
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The sentence means that people would rather prefer to see an empty refrigerator where they can store food bought from outside(at cheaper rates than what the hotel charges).

the fridge is the mini-bar.. they are not separate..the atleast one purchase case applies when the food and beverages were loaded by the hotel staff..

Answer is a clear D. Hope it clarifies..
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A) There is currently some space available in Hotel T’s in-room mini-bars for guests to put their
own items.

The availability of space is not a factor for profit making and the plan to do so by the Hotle T, therfore this choice is out of scope

b) Hotel T is located in the United States.

This choice presents the location of the hotel which again is not required

c) Some guests of Hotel T do not make any purchases from their in-room mini-bars.

Since some guest does not make any purchases from the mini bar does not mean that the hotel does not make any profite since the rest of the customers would be making puschases. so not a good answer.

d) The money that Hotel T makes from the mini-bar purchases of its guests is less than the
money that Hotel T loses from discarding mini-bar items that have not sold by their
expiration dates.

This is the most appropriate answer since the option clarifies that the hotel is making losses on maintaining the minibar and by getting rid of the minibar the hotel will be saving money.

e) It will cost Hotel T less money to maintain empty refrigerators in its guest rooms than to
maintain stocked mini-bars in those rooms.

this option is also suggesting that the expenditure from the hotel would be less if they provide empty refrigerators rather than minibar but option D address the question more accuratly
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Surveys reveal that the vast majority of hotel guests in the United States resent the high
prices of the items in the mini-bars in their hotel rooms.These guests would prefer to have an
empty refrigerator in their rooms in order to have space to put their own food and beverages,
although a large percentage of these guests would still make at least one purchase from their
in-room mini-bar. After analyzing the results of the study, the management of Hotel T
decided that it would be more profitable to eliminate the mini-bar and install empty
refrigerators in each room. Which of the following, if true, would support Hotel T’s plan to
increase profitability by eliminating in room mini-bars in favor of empty refrigerators?

d) The money that Hotel T makes from the mini-bar purchases of its guests is less than the
money that Hotel T loses from discarding mini-bar items that have not sold by their
expiration dates -- correct
e) It will cost Hotel T less money to maintain empty refrigerators in its guest rooms than to maintain stocked mini-bars in those rooms-- of course it will cost less money to maintain an empty fridge vs mini bar But what if the one item that a large majority of guests purchase offset this 'maintenance' cost?.
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Surveys reveal that the vast majority of hotel guests in the United States resent the high prices of the items in the mini-bars in their hotel rooms. These guests would prefer to have an empty refrigerator in their rooms in order to have space to put their own food and beverages, although a large percentage of these guests would still make at least one purchase from their in-room mini-bar. After analyzing the results of the study, the management of Hotel T decided that it would be more profitable to eliminate the mini-bar and install empty refrigerators in each room.

total guest =100
guest making purchase at minibar =60
guest not making purchase at minibar =40

more profitable if empty refrigerators + no mini-bar
Pre-thinking:-

Why it is more profitable to install empty refrigerators as there is no purchase involved?
1> profit = revenue - cost
what if mini-bar cost hotel more than what it makes in purchase.
what if it reduces maintenance cost.
2> more empty refrigerators => more guest => more revenue => more profit


Which of the following, if true, would support Hotel T's plan to increase profitability by eliminating in room mini-bars in favor of empty refrigerators?



(D) The money that Hotel T makes from the mini-bar purchases of its guests is less than the money that Hotel T loses from discarding mini-bar items that have not sold by their expiration dates.
SO LOSS. THAT MEANS EMPTY R is more profitable.


(E) It will cost Hotel T less money to maintain empty refrigerators in its guest rooms than to maintain stocked mini-bars in those rooms.
It only talks about maintenance cost. We have to make certain assumption here about other parameters that contribute in profitability. so purchase, sales all other factors are just ignored.

so for example:-

you have 2 business.
1> where you to pay salary.
2> You don't have to pay any salary.

What will you prefer. Will you arrive directly at option 1. Or would you rather analyze other factors. Let's say where you have to pay salary, they do something in booming business. that means more money -> that can be translated into more profit.

but in case of NO SALARY, if there is LESS REVENUE and LESS PROFIT. then which sounds a good opp. obviously option 1.
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You can straight away eliminate options A,B,C as they are irrelevant to the question coming to option D&E, option D is explaining more how the hotel is losing money in discarding the expired food from the mini bars whereas, in option E it talks about the how maintaining refrigerator in the hotel suites is more affordable to the hotel than to maintain stocked one. i guess the process of elimination can for option E is because it is just an advice to reduce the cost for the hotel but whereas in option D it talks about by avoiding the discardation of the expired food could save them money so by that we can elimination option E.( my thought process might be wrong correct me if im wrong)
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