# The Harriet Hotel in downtown Boston has 100 rooms that rent for $150 per night. It costs

## Question:

The Harriet Hotel in downtown Boston has 100 rooms that rent for $150 per night. It costs the hotel $30 per room in variable costs (cleaning, bathroom items, etc.) each night a room is occupied. For each reservation accepted, there is a 5% chance that the guest will not arrive. If the hotel overbooks, it costs $200 to compensate guests whose reservations cannot be honored.

How many reservations should the hotel accept if it wants to maximize the average daily profit? Use 1000 replications for each reservation level that you consider.

Fantastic news! We've Found the answer you've been seeking!

## Step by Step Answer:

**Related Book For**

## Spreadsheet Modeling & Decision Analysis A Practical Introduction to Management Science

**ISBN:** 978-0324656633

5th edition

**Authors:** Cliff T. Ragsdale