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TourAmerica is negotiating a master contract with Voyager Inn International (Bethesda) for hotel rooms during the 1995 tourist season. Issues under consideration include number of rooms during peak, mid-, and off-periods, room rates, breakfast prices, and the cost of ancillary services. While the hotel manager is evaluated on the basis of several criteria, including adjusted daily rates, occupancy rates, and food and beverage profitability, and is also provided with a utility scheme to facilitate trade-offs among the criteria, TourAmerica uses an effective cost per registrant (adjusted for intangibles). These two approaches provide an opportunity to contrast measurement schemes and to justify the use of utility functions. This case is a role-play exercise and must be used in conjunction with “Voyager Inn International” (UVA-QA-0463).

Voyager Inn International (Bethesda) is negotiating a master contract with TourAmerica, an international tour operator, for hotel rooms during the 1995 tourist season. Issues under consideration include number of rooms during peak, mid-, and off-periods; room rates; breakfast prices; and the cost of ancillary services. The hotel manager is evaluated on the basis of several criteria, including adjusted daily rates, occupancy rates, and food and beverage profitability. To facilitate trade-offs among the various criteria, the manager articulates a utility scheme. This case is a role-play exercise, and must be used in conjunction with “TourAmerica” (UVA-QA-0464). Reporting forms for the evaluation of alternative contracts are provided with each case.

Sparta Glass Products has been losing significant market share over the last several quarters in the non-glare-glass market, with a price 10% above the competition. Lowering the price is under consideration. Unfortunately, fully allocated costs are such that the lower price results in a loss. Issues to be discussed and analyses to be conducted include the relevant costs for the decision and the reactions from competitors.