Ch24 Discussion

Discussion Guide

1. "Bellwether's Saturday brunch does 110 covers and \$2,640. Its Tuesday dinner does 62 covers and \$2,852. Which is the better service, and what would you need to know to answer properly?"

What to listen for: students who go straight to RevPASH (\$9.71 against \$8.39) and stop have done half the work. Push for the next layer — brunch needs materially more labor for 110 covers than Tuesday needs for 62, so the revenue comparison understates the gap in contribution. The best answers name the Chapter 32 question explicitly and refuse to settle it here. Listen also for anyone who says "brunch, obviously, look at the covers" — that student has just demonstrated the chapter's premise and should be thanked for it publicly.

2. "Adding the patio lowers RevPASH from \$12.09 to \$11.60 and adds \$64,800 of revenue. Is the metric broken?"

What to listen for: the distinction between a comparison metric and an objective function. Good answers generalize — any ratio with capacity in the denominator behaves this way, which is why hotels do not decide whether to build a wing by looking at RevPAR. Push on the follow-up: what question should you use instead? (Contribution: does the patio's revenue exceed its incremental cost?) Weak answers try to rescue RevPASH by adjusting the denominator, which is worth exploring for two minutes and then abandoning.

3. "A prepaid \$300 tasting menu with prices that vary by night provoked essentially no public objection. A possible fifty-cent lunch differential at a burger chain became a national news story. Why?"

What to listen for: several real answers, and students should find more than one. Framing (discount versus surcharge). Frequency and price point — people have a strong intuitive sense of what a hamburger costs and none about a tasting menu. Self-selection — nobody is forced into a \$300 dinner, and lunch on a Tuesday is closer to a necessity. And schedule captivity: the quick-service customer at 12:15 is on a break, not choosing a departure time. The strongest answers connect this back to who bears the cost of a peak-pricing scheme. Watch for the student who says "because people are irrational" — that is a conversation-ender and also wrong; press them on whether a customer who punishes a pricing scheme is behaving irrationally or defending a relationship.

4. "Chapter 19 said the plan spends the most labor when the room is emptiest. Chapter 24 says the most valuable cover in the week is the one on the slowest night. Are those the same finding or two different ones?"

What to listen for: they are the same fact from opposite sides, and the point is that only one of them has a solution students will like. The cost side has a floor you cannot cut below; the revenue side has no floor at all. Good answers arrive at the conclusion that a fixed-cost-heavy business should generally attack the numerator on its weak days and the denominator only on its strong ones. Excellent answers notice that this reverses the instinct of nearly every restaurant manager, who cuts labor on Tuesday and adds it on Saturday, and that the instinct is not wrong so much as incomplete.

5. "The chapter rejects Bridge B even though it says Bridge B's dollars are better dollars. Defend the decision. Then attack it."

What to listen for — the defense: a plan may not bank its own recovery instrument; four named streams can be audited and one blended assumption cannot; the covers are not distributed where the capacity is. What to listen for — the attack, which is real and students should be pushed to find it: 53% of Bridge A belongs to two business lines the partners have never operated, so the chapter has traded a single unverifiable assumption for two unverifiable businesses. That is a genuine weakness and the chapter names it. The best students will propose a third bridge. Let them, and then ask what its \$139,240 is made of and who owns each line.

6. "Design a pricing instrument for a slow Tuesday that you would be comfortable defending to a guest who asks about it at the table."

What to listen for: whether the fences are specified — time, day, product — or whether the student has designed a price cut and called it a program. Then push on the defense itself: what do you actually say? Good answers land somewhere near "it runs from five to six-fifteen on Tuesdays and Wednesdays, and it's three courses" — factual, unapologetic, and choosable. Listen for students who want to hide the differential or explain it away; that instinct is diagnostic, because an instrument you cannot say out loud at a table is one you should not be running.

7. (Optional, if the fairness discussion has energy.) "The chapter's test is: can the guest see the rule and choose the cheaper side of it? Someone who works every Tuesday evening cannot. Does the test survive that?"

What to listen for: whether students can hold an incomplete answer without either abandoning it or pretending it is complete. This is a maturity check more than a content check. The chapter's own position — that the test is enough to run a restaurant by and not enough to feel finished with — is a defensible landing spot, but it should not be handed to them. Some students will argue that all pricing sorts by something and schedule flexibility is no worse than any other sorting variable; that is a serious argument and deserves a serious hearing.