Reference no: EM132693816

Round Tree Manor is a hotel that provides two types of rooms with three rental classes: Super Saver, Deluxe, and Business. The profit per night for each type of room and rental class is as follows:

Room       Super Saver          Deluxe         Business

Type I          $31                      $35            -

Type II      $16                   $33                   $42

Type I rooms do not have wireless Internet access and are not available for the Business rental class.

Round Tree's management makes a forecast of the demand by rental class for each night in the future. A linear programming model developed to maximize profit is used to determine how many reservations to accept for each rental class. The demand forecast for a particular night is 130 rentals in the Super Saver class, 50 rentals in the Deluxe class, and 45 rentals in the Business class. Round Tree has 105 Type I rooms and 145 Type II rooms.

Question 1: Use linear programming to determine how many reservations to accept in each rental class and how the reservations should be allocated to room types.

Question 2: How many reservations can be accommodated in each rental class?

Question 3: Management is considering offering a free breakfast to anyone upgrading from a Super Saver reservation to Deluxe class. If the cost of the breakfast to Round Tree is $5, should this incentive be offered?

Question 4: With a little work, an unused office area could be converted to a rental room. If the conversion cost is the same for both types of rooms, would you recommend converting the office to a Type I or a Type II room?

Question 5: Could the linear programming model be modified to plan for the allocation of rental demand for the next night?