Tom Rodgers is the director of purchasing for Dart Industries. Tom is responsible for booking 1,000 rooms per month in the city that houses his company's corporate office. Tom approaches you, the DOSM/RM of the local Hawthorne Suites hotel, with a proposition. Instead of paying $159.99 per night; your hotel's normal room rate for corporate travelers, he proposes the following rate structure:

Question

1. As the DOSM/RM for the Hawthorne Suites, would you be in favor of this quantity discount program? Explain your answer.

Rooms Purchased Per Month 1 to 100 101 to 400 401 to 600 601 to 1,000 Room Rate $159.99 $139.99 $119.99 $109.99