Solution-What is the expected total revenue from the full

What is the expected total revenue from the full price

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Reference no: EM132954539

Question - The Days Inn hotel has 30 rooms with standard queen-size beds and two rates: a full price of $219 and a discount price of $129. To receive the discount price, a customer must purchase the room at least one week in advance (this helps to distinguish between leisure travelers, who tend to book early, and business travelers, who value the flexibility of booking late). For a particular Monday night, the hotel estimates that the demand from leisure travelers could fill the whole hotel while the demand from business travelers is distributed according to Poisson distribution with mean 8.5 (see table below).

(a) Find the optimal protection level for full-price rooms for the particular Monday night.

Given the optimal protection level for full-price rooms computed in (a), the manager computes that the expected number of business travelers that will be denied is 3. Answer the following questions.

(b) Given the optimal protection level for full-price rooms computed in (a), what is the expected total revenue from the full price rooms on the particular Monday night?

Reference no: EM132954539

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What is the expected total revenue from the full price

Reference no: EM132954539

Reference no: EM132954539

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