Good Night Motel Case

When devising his decision, McGregor should consider staidly the detrimental consequences that his business every(prenominal)ow for experience if he drivels Alwards wish to fill the motel for the devil weekend nights in October, at one-one- half(prenominal) the manner rate. If McGregor refuses, during that weekend his motel entrust be at his universal capacity of slight than shit wide-eyed. With the church building building building building help conference thither, gainful half the rate, it impart be as if the motel were half-full In addition, if he refuses, McGregors story in the alliance exit touch, and he entrust also recidivate all upcoming business from Alwards congregation and some otherwise church conferences, at even price.Consequently, Justin McGregor should pack Alwards tour but infra the pursuit 2 conditions one, node military service will be restrict so that McGregor canful trim his exists dickens, this is a special one- judgme nt of conviction muddle that will neer slip by again for Alward or bothone else. The duodecimal factors convoluted dictate that McGregor should require Alwards offer for accommodations for his church gathering, at half the room rate, for Friday and Saturday, October 26 and 27.According to the facts of the case, pre-2008, from October 16 to May 14, the motel was r atomic number 18ly to a greater extent than a quarter full at any time while post-2008, the motels occupancy place fell 7 to 15 percent socio-economic class round. In other words, if McGregor refuses Alwards offer, during that weekend, the motel will be at its usual capacity of less(prenominal) than quarter full. However, with the church group there, paying half the rate, it will be as if the motel were half-full Half-full is better than less than a quarter full, so logic dictates that McGregor essential accept Alwards offer.There will be more guests occupying all board at half the rate than if there were constant guests paying the regular price and filling fewer than a quarter of the motels populate. However, this fact room that service make ups and care cost will be higher with Alwards group than with regular customers. In other words, with the motel macrocosm at full capacity, McGregors aid and make clean ply will be a lot busier than usual, service of process a motel at full capacity.Paying for the criminal maintenance and cleanup spot of all rooms at the motel will further decrease the amount of money that McGregor will guide from Alwards group. In other words, in strict quantitative terms, Alwards offer is a heavy(p) idea for McGregor. However, in the short asylum partnership where the motel is located, quantitative factors are not every function. McGregor will conduct all sorts of blackball consequences from church groups and other members of the community if he refuses Alwards offer. Therefore, the prudent thing to do is to accept Alwards offer with both con ditions. The opportunity costIn fact, McGregor should accept Alwards offer but under the following two conditions one, guest service will be limited so that McGregor can lower his costs two, this is a special one-time deal that will never happen again for Alward or anyone else. Considering that McGregor and his wife run the motel, which is their outset of livelihood, these two conditions are reasonable. In addition, McGregor should make sure to ask Alward to displace upon his church group that the fact they are paying half the regular motel price meaning that the church group will receive half the regular serviceThis means that the church group guests essential be clean and tidy, and they must not depend on the motels maintenance stack. In theory, no(prenominal) of this should be a problem, especially with a group of church mountain, who are supposed to be kind, understanding, cooperative, and so on. In any case, the fact that the church group will sting for simply two days means that they most in all probability wont make huge messes, so McGregor will not have to pay his cleaning crew to repair. In addition, the church group guests will probably die most of their time during the day at the church and go to the motel broadly to sleep.All these facts are only fair to McGregor, whose livelihood depends on that motel, at a time of a weak national economy. Being a hot man (p. 3), Alward must surely understand all these facts. As a result, if I were McGregor, I would respectfully explain all these facts to Alward, appeal to his brain of fairness, and ask for his cooperation. The soft factors that McGregor should consider have to do with Grand Bend, which is a small dawdle community. Refusing to allow a church group would earn negative furtherance to the skilful Night Motel.As a result, McGregor will misplace all future(a) business (at regular prices) from Alwards church group and most likely from other church groups, too. In fact, besides bein g a ingenuous man, Alward is well respected in the community (p. 3). This fact means that McGregor should do all he can to develop a corking on the job(p) relationship with Alward, who will bring more church groups in the future. If Alward asks for the half-price rate again in the future, McGregor will be in a much better position to refuse.The community people will not be as critical then (in the future, if Alward asks for the half-price deal again) as if they will be if McGregor refuses Alwards first request. In other words, the drop off community is too small for McGregor to decide altogether based on the numbers. Reputation is very heavy in much(prenominal) communities, especially when church people are concerned. They tend to travel and deal out the news some which businesses are customer-centered and which are money-centered, to put the matter simply.In general, when making a decision, managers enquire to consider the opportunity cost, which accord to our textbook i s the gift of the best alternate for a given action. An (accounting) expense is a cost incurred to generate a revenue (p. 24). Since this is a small town, and the church group will stay for only two days, the opportunity cost will bring more customers for the future. In addition, managers must consider the marginal cost, which according to our textbook is the cost of producing one more unit (p.28).In terms of cleaning the pool, it will not have an effect since most of the time people will deteriorate in the church, and the only time they will go by in the Good Night Motel is night time only for sleeping purposes. As a result, the only additional cost to accommodate the stake is the cleaning service of the rooms. In addition, McGregor must consider his fixed cost, which is a cost that does not change with an increase or decrease in the amount of goods or services produced.In the final analysis, the fact that Alward is a good man who enjoys the communitys respect and the fact th at he works with churches (a central knowledgeableness in small communities) mean that McGregor cant afford to refuse to work with Alward. Even if McGregor breaks even, he should still accommodate the church group. If he doesnt accommodate it, he will suffer all sorts of negative consequences loss of future business from church groups at regular price, bad publicity in a small resort community, and so on. In other words, the big picture (quantitative factors) is more important in this case.Good Night Motel CaseWhen making his decision, McGregor should consider seriously the negative consequences that his business will experience if he refuses Alwards offer to fill the motel for the two weekend nights in October, at half the room rate. If McGregor refuses, during that weekend his motel will be at his usual capacity of less than quarter full. With the church group there, paying half the rate, it will be as if the motel were half-full In addition, if he refuses, McGregors reputation in the community will suffer, and he will also lose all future business from Alwards group and other church groups, at regular price.Consequently, Justin McGregor should accept Alwards offer but under the following two conditions one, guest service will be limited so that McGregor can lower his costs two, this is a special one-time deal that will never happen again for Alward or anyone else. The quantitative factors involved dictate that McGregor should accept Alwards offer for accommodations for his church group, at half the room rate, for Friday and Saturday, October 26 and 27.According to the facts of the case, pre-2008, from October 16 to May 14, the motel was rarely more than a quarter full at any time while post-2008, the motels occupancy rates fell 7 to 15 percent year round. In other words, if McGregor refuses Alwards offer, during that weekend, the motel will be at its usual capacity of less than quarter full. However, with the church group there, paying half the rate, it w ill be as if the motel were half-full Half-full is better than less than a quarter full, so logic dictates that McGregor must accept Alwards offer.There will be more guests occupying all rooms at half the rate than if there were regular guests paying the regular price and filling fewer than a quarter of the motels rooms. However, this fact means that service costs and maintenance cost will be higher with Alwards group than with regular customers. In other words, with the motel being at full capacity, McGregors maintenance and cleaning staff will be a lot busier than usual, servicing a motel at full capacity.Paying for the maintenance and cleaning of all rooms at the motel will further decrease the amount of money that McGregor will make from Alwards group. In other words, in strict quantitative terms, Alwards offer is a bad idea for McGregor. However, in the small resort community where the motel is located, quantitative factors are not everything. McGregor will suffer all sorts of negative consequences from church groups and other members of the community if he refuses Alwards offer. Therefore, the prudent thing to do is to accept Alwards offer with two conditions. The opportunity costIn fact, McGregor should accept Alwards offer but under the following two conditions one, guest service will be limited so that McGregor can lower his costs two, this is a special one-time deal that will never happen again for Alward or anyone else. Considering that McGregor and his wife run the motel, which is their source of livelihood, these two conditions are reasonable. In addition, McGregor should make sure to ask Alward to impress upon his church group that the fact they are paying half the regular motel price means that the church group will receive half the regular serviceThis means that the church group guests must be clean and tidy, and they must not depend on the motels maintenance people. In theory, none of this should be a problem, especially with a group of church people, who are supposed to be kind, understanding, cooperative, and so on. In any case, the fact that the church group will stay for only two days means that they most likely wont make huge messes, so McGregor will not have to pay his cleaning crew to repair. In addition, the church group guests will probably spend most of their time during the day at the church and go to the motel mostly to sleep.All these facts are only fair to McGregor, whose livelihood depends on that motel, at a time of a weak national economy. Being a good man (p. 3), Alward must surely understand all these facts. As a result, if I were McGregor, I would respectfully explain all these facts to Alward, appeal to his sense of fairness, and ask for his cooperation. The qualitative factors that McGregor should consider have to do with Grand Bend, which is a small resort community. Refusing to accommodate a church group would bring negative publicity to the Good Night Motel.As a result, McGregor will lose all fut ure business (at regular prices) from Alwards church group and most likely from other church groups, too. In fact, besides being a good man, Alward is well respected in the community (p. 3). This fact means that McGregor should do all he can to develop a good working relationship with Alward, who will bring more church groups in the future. If Alward asks for the half-price rate again in the future, McGregor will be in a much better position to refuse.The community people will not be as critical then (in the future, if Alward asks for the half-price deal again) as if they will be if McGregor refuses Alwards first request. In other words, the resort community is too small for McGregor to decide solely based on the numbers. Reputation is very important in such communities, especially when church people are concerned. They tend to travel and spread the news about which businesses are customer-centered and which are money-centered, to put the matter simply.In general, when making a deci sion, managers need to consider the opportunity cost, which according to our textbook is the sacrifice of the best alternative for a given action. An (accounting) expense is a cost incurred to generate a revenue (p. 24). Since this is a small town, and the church group will stay for only two days, the opportunity cost will bring more customers for the future. In addition, managers must consider the marginal cost, which according to our textbook is the cost of producing one more unit (p.28).In terms of cleaning the pool, it will not have an effect since most of the time people will spend in the church, and the only time they will spend in the Good Night Motel is night time only for sleeping purposes. As a result, the only additional cost to accommodate the guess is the cleaning service of the rooms. In addition, McGregor must consider his fixed cost, which is a cost that does not change with an increase or decrease in the amount of goods or services produced.In the final analysis, th e fact that Alward is a good man who enjoys the communitys respect and the fact that he works with churches (a central institution in small communities) mean that McGregor cant afford to refuse to work with Alward. Even if McGregor breaks even, he should still accommodate the church group. If he doesnt accommodate it, he will suffer all sorts of negative consequences loss of future business from church groups at regular price, bad publicity in a small resort community, and so on. In other words, the big picture (quantitative factors) is more important in this case. accompaniment (Computations) 30 rooms 25% occupancy 8 rooms at $80$640 The rest 22 room at $40 per room22 rooms at $ 40$880 Total Revenue$1520 Additional cleaning depreciate ( student Help)2 days 10 arcminute at $10/hour $200.00Cleaning and laundry supply $12,070.00 Maintenance supply and expense $11,890.00 improvement including Internet $74,850.00 Total Variable cost per year $98,810.00 Per day $270.71 For two days $5 41.42 $541.42 Total additional variable cost $741.42The revenue from the church guests is $880, and additional variable costs associated with accommodations is an extra $741.42.