Question: HOTEL OVERBOOKING STRATEGY ( 2 0 points ) A hotel near the university always fills up on the evening before football games. History has shown
HOTEL OVERBOOKING STRATEGY points
A hotel near the university always fills up on the evening before football games. History has shown that when the hotel is fully booked, the number of lastminute cancellations has the following distribution:
tableCancellationsProbability
The average room rate is $ When the hotel is overbooked, policy is to find a room in a nearby hotel any to pay for the room for the customer. This usually costs the hotel approximately $ since rooms booked on such late notice are expensive.
a How many rooms should the hotel overbook?
b What is the Expected profit of your optimal strategy in a
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
