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The Foremost Composite Materials Company is planning a two-day sales conference for October 19-20. The conference...

The Foremost Composite Materials Company is planning a two-day sales conference for October 19-20. The conference consists of all-day meetings that the entire sales force, numbering 120 sales representatives must attend. Each sales representative requires his or her own room. Management has set a budget of $150,000, and is expecting this to cover the sales representatives rooms, airline tickets and food costs. The company would like to hold the conference in Miami, Florida, at a Hilton or Marriott-owned hotel.

Use the Hilton and Marriott Web sites to select a hotel in whichever of these cities that would enable the company to hold its sales conference within its budget (do not include the sales conference meeting room in the cost, just the hotel rooms. Also food costs are just for Oct 19 & Oct 20). Then locate flights arriving the day prior to the conference (Oct 18). Your attendees will be coming from Los Angeles(50 sales reps), San Francisco (20 sales reps), Seattle (20 sales reps), Chicago (10 sales reps), and Pittsburgh (20 sales reps). Determine costs of each airline ticket from these cities. When you are finished, create a budget for the conference. The budget will include the cost of each airline ticket, the room cost, and $70 per attendee per day for the food. Remember to create budget for both the Hilton and Marriott. The budget will determine the best price determined by the hotel rates.

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Answer #1

# of sales reps - 120 (staying 2 nights at hotel)

Budget - $150,000 (rooms, flights, food)

Hotels :

Marriot : Courtyard by Marriot, Miami airport west - cheapest pre-booking rate of $133 per night including taxes and fees = $266 per head = $31,920 for 120 people

Hilton : Doubletree by Hilton, Miami airport - cheapest rate of $100 without taxes = $227.81 per head with taxes = $27,338 for 120 people

Flights : due to current climate of flights being grounded due to Covid-19, flight rates are unusually high, current rates will not fit into the budget (just the LA flights would be $1,028,000) so using last year's average rates

Los angeles - 50 : $333 per head one-way = $33,300 round trip for all

San francisco - 20 : $287 per head one-way = $11,480 round trip for all

Seattle - 20 : $240 per head one-way = $9600 round trip for all

Chicago - 10 : $164 per head one-way = $3280 round trip for all

Pittsburgh - 20 : $228 per head one-way = $9120 round trip for all

Total flight cost : $66780 for 120 people

Average meal budget : $70 dollars per head per day = $16,800 for 120 people for 2 days

Fixed costs (flights+food) = $83,580

Variable cost (hotel) = (M) $31,920, (H) $27,338

Budget using Hilton = $110,918

Budget using Marriot = $115,500

Of the two options, Hilton's room rates are lower and provide more wriggle-room for fluctuations in the other costs such as flights or food or any other contingencies such as hidden costs, unexpected expenses, breakages/damages/insurance etc.

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