# Question

A minibar in a hotel room generally provides an impression that the hotel is more upscale. PKF Hospitality research reported that minibars provide a mean annual revenue of $368 per hotel room (USA today, February 9, 2012). Consider an upscale hotel in San Antonio, Texas, that has a total of 330 rooms, each with a minibar. Assume that the total monthly revenue for this hotel’s minibar service is normally distributed with a standard deviation of $2,200.

a. Using the mean annual revenue of $368 per minibar, what is the mean total monthly revenue for the minibar service at this hotel?

b. What is the probability that the monthly minibar service provides over $12,000 in revenues for this hotel?

c. What is the probability that the monthly minibar service provides less than $7,500 in revenues for this hotel?

d. The hotel is considering upgrading the minibar selections to make the minibars. more interesting for its guests. New minibar offerings are expected to raise the mean annual revenue to $420 per minibar. Assume that the total monthly revenue for the hotel’s new minibar service is normally distributed with a standard deviation of $2,500. Answer parts (b) and (c) for the upgraded minibar service. What is the increase in the mean annual revenue for the upgraded minibar service? Do you agree with the strategy of upgrading the hotel’s minibar service? Explain.

a. Using the mean annual revenue of $368 per minibar, what is the mean total monthly revenue for the minibar service at this hotel?

b. What is the probability that the monthly minibar service provides over $12,000 in revenues for this hotel?

c. What is the probability that the monthly minibar service provides less than $7,500 in revenues for this hotel?

d. The hotel is considering upgrading the minibar selections to make the minibars. more interesting for its guests. New minibar offerings are expected to raise the mean annual revenue to $420 per minibar. Assume that the total monthly revenue for the hotel’s new minibar service is normally distributed with a standard deviation of $2,500. Answer parts (b) and (c) for the upgraded minibar service. What is the increase in the mean annual revenue for the upgraded minibar service? Do you agree with the strategy of upgrading the hotel’s minibar service? Explain.

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