What is the optimal number of rooms to allocate per day

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Reference no: EM133338145

Question: A famous hotel chain in Toronto wishes to determine the number of rooms that it should allocate for the summer season. Every allocated incurs a daily expense of $25 to the hotel, due to cleaning and maintenance costs (regardless if the room is occupied or not). Customers pay $200 per night stay. Suppose that daily demand during summer is Normally distributed with mean 100 and variance 49. What is the optimal number of rooms to allocate per day to maximize expected revenue?

Reference no: EM133338145

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