B2090C: Business Operations

Question 1

Select one (1) hotel which is a member of the Singapore Hotel Association to answer parts (a) and (b) below.

  • What are two (2) possible limitations to consider in using Revenue Management for your selected hotel? Explain.
  • Provide examples of how each of the following three (3) Pricing Methods can be applied to your selected hotel.
    i. Cost-based Pricing
    ii. Rate of Return Pricing
    iii. Psychological Pricing

In your examples, provide calculations (if applicable) based on available information with reasonable assumptions. State your source of information.

Question 2

Suppose you are keen to start a food and beverage business

Name three (3) items you plan to sell. Research the fixed and variable costs involved and the appropriate selling prices and answer the following questions:

  • Conduct a multi-product break-even analysis for one (1) month. Your analysis should report on the break-even number of units to be sold and a reasonable sales mix.
  • Explain how your analysis in Part (a) will affect your decision to start the business and/or the way you will operate it.

Question 3

Suppose you are planning an annual Dinner and Dance event.

It has been agreed that each participant who turns up on an actual day will pay $30.

The estimated turnout is 300 participants.

You are required to do the following:

  • Describe in detail the event you are planning and prepare the static budget for your event. Describe two (2) variable costs and two (2) fixed costs in your static budget. State your source of information.
  • Prepare a flexible budget for your event, assuming that one of the variable costs increased by 10% per person and only 250 participants turned up on an actual day.

You should use the table below as a starting point in preparing static and flexible budgets.

You should use the template below. Show all your workings clearly.

Business Operations

Question 4

Assume that you are starting a merchandising company that sells soft toys bought from an overseas supplier.

Additional Information

  • Forecast Sales Volume is shown below

Business Operations

  • Research and determine the cost price and selling price of one (1) unit of soft toy. State your assumptions and cite your sources clearly.
  • Assume that the cost price and selling price of one (1) unit of soft toy remains unchanged from Dec 2022 to Apr 2023.
  • At the end of each month, there should be enough inventory (in units) to cover 30% of the next month’s sales.
  • Selling and Administrative Expense is expected to remain constant at $8,000 per month.
  • 80% of sales are collected within the month with the remaining to be collected next month.

Question 5

Business Operations

Suppose you are operating a physical store selling clothes. Due to the recent market conditions, you are considering shifting your business entirely online.

Use the anchor decision as deciding to shift your business from a physical store to an online store. You are required to do the following:

  • Provide one (1) relevant cost (item 1) and one (1) relevant savings (item 2) and explain the rationale.
  • Provide one (1) irrelevant cost (item 3) and explain the rational