How could you make the three different alternative scenarios more realistic?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Scenario:
Hotel XYZ is an independent city center hotel property with 200 rooms.
In general its Average Daily rate is approximately €100 throughout the year, and its runs at an average of 65% occupancy.
Its distribution channel mix is relatively simple. Currently approximately 50% of its bookings arrive at the hotel through direct channels, with business, leisure and meeting customers contacting the hotel directly.
The hotel is listed on the major GDS, generating approximately 10% of its business, while OTAs generate about 20% of its bookings, for which on average it pays a commission of 20% per booking.
The hotel has a direct brand.com website, which generates 10% of its bookings, while the remaining 10% come from other miscellaneous sources.
In terms of costs, the hotel estimates that the variable cost of selling a room is about €12. Each month the hotel’s labour cost is about €80,000 and Utilities / power & light about €50,000. The hotel has also budgeted €32,000 per month for sales and marketing expenses. A recent refurbishment of the property was financed by a bank the interest on which currently runs at €60,000 per month.
Right now the hotel’s owner is not happy with the level of profitability at the end of the month. Your general manager has asked you to quantitatively evaluate three different scenarios:
(1) Increasing the hotel’s average daily rate by 10%
(2) Increasing the number of bookings coming through OTA channels by 10%
(3) Increasing the number of bookings coming through your brand.com website by 10%
A spreadsheet with the above figures is provided in the “peer review documents” page, to help you undertake your assessment.
How could you make the three different alternative scenarios more realistic?
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