What is the optimal number of rooms to reserve

Assignment Help Operation Management

Reference no: EM132266160

Six months before its annual convention, the American Medical Association must determine how many rooms to reserve. At this time, the AMA can reserve rooms at a cost of $50 per room. All rooms that are reserved must be paid for even if they are not used. The AMA believes the number of doctors attending the convention will be normally distributed with a mean of 5000 and a standard deviation of 1000. If the number of people attending the convention exceeds the number of rooms reserved, extra rooms must be acquired at a cost of $80 per room. Use a simulation model to determine the expected cost of the rooms for the convention for the following reservation levels: 2000, 3000, 4000, 5000, 6000, 7000, and 8000. From the above list of reservation levels, select the optimal number of rooms to reserve. Use a simulation with 2000 replicates and answer the questions below:

a) What is the optimal number of rooms to reserve?

b) What is the expected minimum cost?

c) Construct a 95% confidence interval for the expected cost for the optimal number of rooms to reserve: ($___,$___)

Reference no: EM132266160

Questions Cloud

Explain what trumps us-china trade wars is about : Discuss the impact of Trump's US-China Trade Wars on the two economies and on other economies throughout the world.

How could you use concept of control in your personal life : How could you use concept of control in your personal life ? What are some work activities in which acceptable range of variation might be higher than average ?

The differences between common and special cause variation : Dispensing the wrong medication to a patient. Dispensing the correct medication several hours after it was supposed to be dispensed.

Most situations large funds raised by private equity acquire : In most situations the large funds raised by a private equity acquirer allow them to pay more for acquisitions than an industry aquirer could afford.

What is the optimal number of rooms to reserve : What is the optimal number of rooms to reserve? What is the expected minimum cost?

What are the elements of the crimes of mail and wire fraud : What are the elements of the crimes of mail and wire fraud conspiracy; tax evasion; and conspiracy to commit tax fraud?

Who would approve the project plan in weak matrix : The organization structure you operate within can affect the amount of power you have. For example, who would approve the project plan in a weak matrix?

How to compile an infographic poster : how to compile an infographic poster and what software you can use - You may like to select something close to where you live, or a land use that you have

User Account

All Pages