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Broadway Theatre in NYC houses 1761 seats. In order to maximize revenues, the theatre has decided to have two fare classes. High (H) fare class tickets sell for $100 and the Low (L) fare class tickets sell at a discounted price of $75. There is ample demand for the low fare class, but high fare demand is random. Furthermore, the customers who buy low fares, buy their tickets well in advance before high fare customers. Assume the demand for high fare tickets is normally distributed with a mean of 1200 and a standard deviation of 150. what is my revenue without revenue management, what is my optimal protection level?
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