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# Surveys reveal that the vast majority of hotel guests in the United St

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Surveys reveal that the vast majority of hotel guests in the United St  [#permalink]

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28 Apr 2012, 22:22
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68% (01:47) correct 32% (02:03) wrong based on 1151 sessions

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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?

(A) There is currently some space available in Hotel T's in-room mini-bars for guests to put their own items.

(B) Hotel T is located in the United States.

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

(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.

(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.

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Re: Surveys reveal that the vast majority of hotel guests in the United St  [#permalink]

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29 Apr 2012, 09:37
3
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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Re: Surveys reveal that the vast majority of hotel guests in the United St  [#permalink]

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29 Apr 2012, 09:47
1
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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Concentration: Marketing, Technology
Re: Surveys reveal that the vast majority of hotel guests in the United St  [#permalink]

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29 Dec 2013, 19:05
3
1
gmatfighter12 wrote:
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.
Better explanation for avoiding E is that the hotel can't SELL anything from an empty refrigerator, but they could SELL things from the minibar -- a consideration that is just ignored in E. In that case, even if maintainance of mini-bars cost more, it may be better to keep mini-bars as they create more revenues.
D definitely covers this position.
HTH

BTW, an advanced version of this question can be located here: alan-government-subsidies-have-been-proposed-in-cariana-to-163278.html
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Re: Surveys reveal that the vast majority of hotel guests in the United St  [#permalink]

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27 Mar 2014, 08:31
1
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
Cheers
J
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Re: Surveys reveal that the vast majority of hotel guests in the United St  [#permalink]

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23 Nov 2015, 15:17
GetThisDone wrote:
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.

GetThisDone wrote:
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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Re: Surveys reveal that the vast majority of hotel guests in the United St  [#permalink]

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23 Nov 2015, 20:58
2
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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Re: Surveys reveal that the vast majority of hotel guests in the United St  [#permalink]

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04 Feb 2017, 07:51
3
1
Hotel T wants to increase profitability by eliminating in-room mini-bars and replacing them with empty refrigerators. To increase Hotel T's profitability, the information provided must demonstrate that the difference between Hotel T's revenues and costs will increase as a result of the plan.
(A) The fact that there is space available in Hotel T's in-room mini bars for guests to put their own items has no relationship to Hotel T's plan to increase its profitability.
(B) Since the survey discussed in the passage discussed hotel guests in the United States, it has relevance for Hotel T. However, this fact has no bearing on whether Hotel T's plan will increase its profitability.
(C) Since some guests of Hotel T do not make any purchases from their in-room mini-bars, eliminating these mini-bars will not result in any lost revenue from these guests. However, this information tells us nothing about the purchasing habits of other guests of Hotel T and it has no obvious relationship to Hotel T's plan to increase profitability.
(D) CORRECT. This fact establishes that Hotel T is currently losing money on the mini-bars. While it makes money on the mini-bar purchases of its guests, Hotel T actually loses more money because it must discard mini-bar items that have not sold by their expiration dates. By eliminating the mini-bars in favor of refrigerators, Hotel T will lose the income from mini-bar purchases but save even more money because it no longer will have to discard old mini-bar items. This will increase Hotel T's profitability.
(E) Hotel T will reduce its costs by switching from stocked mini-bars to empty refrigerators. However, this may or may not increase Hotel T's profitability. For example, if the lost revenue from the elimination of the mini-bars exceeds the reduction in costs, then the switch will actually decrease Hotel T's profits.
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Re: Surveys reveal that the vast majority of hotel guests in the United St  [#permalink]

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08 Feb 2017, 11:11
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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Re: Surveys reveal that the vast majority of hotel guests in the United St  [#permalink]

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19 Apr 2017, 11:26
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 St  [#permalink]

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12 Sep 2017, 01:38
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:-

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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Re: Surveys reveal that the vast majority of hotel guests in the United St  [#permalink]

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23 Nov 2018, 12:47
Between D & E

Keeping empty refrigerator = no profit no loss

Mini bar = loss (reason mentioned in option D)

Option E: focused on maintenance. The guest buys at least one drink... still no clue whether selling one drink resulting in profit or loss.

Option D Correct !

Posted from my mobile device
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Re: Surveys reveal that the vast majority of hotel guests in the United St  [#permalink]

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20 Dec 2019, 03:50
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Re: Surveys reveal that the vast majority of hotel guests in the United St   [#permalink] 20 Dec 2019, 03:50
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