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Mini-Bar in Hotel T

Expert replies
by optimisticsam » Mon Oct 08, 2007 3:43 am
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?

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

2. Hotel T is located in the United States.

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

4. 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.

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

Will tell the OA in a few posts. Just to note, I think the OA omits something and I would like some clarification on it once a few people have posted.

Thanks!
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Source: — Critical Reasoning |

by ratindasgupta » Mon Oct 08, 2007 5:01 am
I'd put my money on D.

The question is - what strengthens Hotel T's plan to increase profitability by eliminating in room mini-bars in favor of empty refrigerators?

A, B and C are irrelevant.

i did consider E for a moment but it says that empty refridgerators are cheaper to maintain. That may be the case, but it doesnt necessarily mean that mini-bars will go at a loss.

D clearly states that the hotel can cut its losses by eliminating mini-bars.
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by ratindasgupta » Mon Oct 08, 2007 5:05 am
only D is relevant because it says that the hotel can cut its losses by getting rid of mini-bars.
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by samirpandeyit62 » Mon Oct 08, 2007 5:05 am
Hi optimisticsam,
E (5) IMO, coz it answers the Q, supports the Hotel T's plan to increase profitability by eliminating in room mini-bars in favor of empty refrigerators by saying that refrigerators are cheaper to maintain as compared to the stock.

4 is also good but does not explicity address the " in favor of empty refrigerators " part of the question.

what is the OA
Regards
Samir
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by optimisticsam » Mon Oct 08, 2007 9:34 am
OA is D.

I took E, because although D does state that they lose money by discarding, it does not take into account the amount of money that the frigs would cost. Ie. if the fridges are very expensive to run all the time, maybe they would lose even more money then on the mini-bar.

Am I way off base?
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by optimisticsam » Mon Oct 08, 2007 4:19 pm
I agree. I think that the that is better worded is E.

How ever... MGMAT thinks not. ;)
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by kate.loo » Tue May 03, 2016 5:23 am
Option D is the best in this case
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by bennett.kwok » Thu May 05, 2016 2:14 am
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.

A, B & C are clearly irrelevant, so just ignore them.

My pick is D, although it really costed me some times in picking from D & E.
The question is asking about profitability, so E only mentioned the cost, even if it costs less money to maintain empty refrigerators, still if all the items in the fridge are purchased, then it is still profitable. In such E is out.

D is answering the question. it compares the earning and cost.
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