Park Hyatt Philadelphia at the Bellevue, located at Walnut and Broad in downtown Philadelphia has a capacity
Question:
Park Hyatt Philadelphia at the Bellevue, located at Walnut and Broad in downtown Philadelphia has a capacity of 240 king rooms. Customers of Hyatt are typically either leisure travelers or business customers. Hyatt charges a discount fare of $125 for a midweek stay (but requires booking a week in advance) which contrast the regular fare of $275. Typically, business customers book in the last minute, and are willing to pay the regular fare, if they can be guaranteed accommodation. Suppose we are interested in the bookings in Park Hyatt on April 25th. Hyatt knows that there are plenty of leisure travelers, willing to pay the low fares. However, all else being equal, Hyatt would like to fill those rooms with the high-fare travelers. The objective of Hyatt is to maximize the sum of revenue from both sections of the travelers. Hyatt follows the 'booking limit policy', by reserving some rooms for last-minute business customers.
What is the underage cost for the number of romms to reserve for last minute customers?
275
125
150
240
What is the overage cost for the number of rooms to reserve for last minute customers?
275
125
150
240
Approximately, how many rooms should the hotel reserve for business customers? Assume that there is ample demand of leisure customers willing to pay the discount fare, and the number of business customers is normally distributed, with mean 50, and standard deviation 26.
Hint: Z value of 0.54 is 0.11.
50
53
58
62
Expert Answer:
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